Saturday Night Live did a recent spoof about what it would take for GOP US Congressional legislators to finally stand up to their standard bearer, the republican President Donald Trump. Frankly, there are no GOP profiles in courage, currently working in the US Congress and the White House, with the exception of the US Senate Intelligence Committee Chair, Senator Richard Burr who plans to no longer serve when his term ends. He has taken a lot of heat from his GOP colleagues for being the one who has approved the issuance of a subpoena for President Trump’s son, Don Jr. to appear at a future hearing.
SEE: nbcnews.com/SNL’ asks what it would take for GOP leaders to leave Trump…
Newsweek–May 11, 2019
In-Depth–The New York Times–May 9, 2019
In-Depth–Politico–May 9, 2019
On May 13, 2019, Noah Smith of Bloomberg penned the following opinion piece, “The Grim Logic of Trump’s Trade War With China”
“Maximizing American prosperity probably isn’t the goal.”
“A month ago, I declared that President Donald Trump’s trade war against China looked like it might be winding down. I was wrong. Instead of capitulating in exchange for some agricultural purchases and other minor concessions, Trump is doubling down. He’s raising tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent, and imposing new tariffs on almost all of the remaining $325 billion or so. China today said it would retaliate and starting next month would impose tariffs on $60 billion of U.S. goods. This is the biggest trade war in modern American history.”
“There were several reasons it looked as if Trump might back off. First, it’s very hard to verify whether Chinese theft of intellectual property — one of the biggest and most justified complaints from the U.S. side — is still happening. Even if Chinese companies and the Chinese military were to stop appropriating the fruits of U.S. research and development, they would still be able to make some progress by cleverly reverse-engineering American-made products, raising accusations of continued espionage. A similar enforceability problem applies to Chinese non-tariff trade barriers; for example, Chinese local governments quietly and unofficially helping Chinese companies out-compete American companies in the domestic market. So even if China acceded to U.S. demands, ensuring compliance would be hard. The difficulty of establishing a credible enforcement mechanism is probably a big reason trade talks have broken down.”
“So with victory hard to verify and losses mounting, it looked like there was little reason to continue the trade war. Yet Trump is doubling down. Why?”
“Trump may be calculating that the strong U.S. economy and resilient stock markets mean that there is little downside to continuing the trade war. Despite higher import prices, real wages have generally continued to rise at a modest rate:”
“Meanwhile, the trade war appears to be hurting China’s economy. It’s hard to isolate the affect of the dispute from other factors, like Chinese government attempts to crack down on the shadow-banking system. But the International Monetary Fund forecasts that the immediate blow from the trade war is hitting China much harder:”
In the Long Run We Are All Dead
“Chinese exports, fixed-asset investment, consumption and industrial production may already have taken a hit. In the long term, both U.S. tariffs and Chinese retaliation may deter multinational companies from producing goods in China; some already are blaming the trade war for a slowdown in foreign direct investment. And by forcing China to shift from exports to investment in order to sustain growth, the trade war might push the country toward a less productive growth model.”
“There may be a grim sort of logic to this approach. So far, China’s ascent in the 21st century has looked unstoppable, as it gobbled up one manufacturing industry after another, shouldered the U.S. aside as the world’s biggest exporter, and became the beating heart of an East Asian economic supercluster. In addition to threatening to relegate North America to the global economy’s periphery, this trend directly imperils U.S. military dominance, as economic and technological supremacy tends to translate into military supremacy.”
“If Trump wants to slow China’s ascent as a superpower, a trade war might be an effective way to do it. If the harm to the U.S. is modest and the costs for China are severe and lasting, Trump might conclude that the former are acceptable losses. Geopolitical primacy, not maximum prosperity for Americans, might be the president’s true objective.”
“It’s also possible, of course, that the trade war is a purely populist endeavor, and that maintaining tariffs is a way for Trump to look tough. If he calculates that there is less to be gained from striking a deal than from continuing the tariffs, or if weakening China really is the goal, then this could be just the opening rounds of a long and grinding trade war.”
“Second, the trade war has cost the U.S. Economists have shown that the actual burden of tariffs has fallen mostly on American consumers — in other words, the prices consumers pay for imported goods has risen, while the prices Chinese sellers receive hasn’t changed very much. And higher prices on capital goods and intermediate goods is raising expenses for U.S. manufacturers, making them less competitive. Meanwhile, Chinese retaliation has hurt U.S. farmers.”
Link to report for graphs: The Grim Logic of Trump’s Trade War With China
Gronda, what should not go unhighlighted is by backing out of the TPP, which went on without the US, a key lever to battle China trade in the Asia-Pacific went away. The other ten countries signed the deal last December. With the US in it, we would have the power of eleven countries to put some economic pressure. It was imperfect as all deals are, but overall was a good agreement. But, Obama championed it, so Trump took the opposite view. Ironically, Dems tended to not like the deal as much as Republican legislators.
The other is by being less supportive of the EU and World Bank, two additional pressure points were lessened. These three actions have greased the skids for an ascendant China, which was bound to happen anyway. Yet, at the heart of Trump’s trade actions and tariffs is a poor understanding of what a trade deficit is. His lack of understanding of who pays for the tariffs on imported Chinese goods is part of the issue.
With that said, the theft of intellectual capital by Chinese operatives is pronounced. Jim Sciuto has written a book called “The Shadow Wars” on this topic, including Russia’s efforts as well. The Chinese have over 1,000 agents in the US and 10,000 or so in China who are part of an active campaign to steal intellectual capital from weapons, to planes to agricultural advances. They have no shame in this regard.
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Hello Gronda. The point Keith makes about tRump not understanding who pays for tariffs is validated by several reporters who have talked to “sources” in the administration. The people the reporters talk to say tRump is convinced that China is paying the tariffs and it is bringing large sums of money, and that any attempt to change is mind on the subject is useless. Knowing that he believes he is smarter than anyone else it makes hope of improvement on this issue doubtful. Hugs
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He seems to be a character who wakes up in the morning, reckons he is right and gets on with it irrespective of evidence and facts.
And with 30+ millions vocal supporters and a GOP who seem to believe any agreement with the Democrats is a mortal sin, then he’s comfortable in his bubble
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