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Trump Will Exclude Democrats From Trade Deal Signing Ceremony

Trump Will Exclude Democrats From Trade Deal Signing Ceremony

Donald Trump plans to host a bill signing ceremony today for the United States–Mexico–Canada Agreement, the renegotiated North American free trade agreement, which passed earlier in January.

However, despite the fact that many House Democrats — including House Speaker Nancy Pelosi — were essential to passing the deal, they will not be at the bill signing ceremony, because Trump refused to invite them, Politico reported.

So the president will take a victory lap on the trade agreement — but not alongside Democratic lawmakers who worked on provisions for the bill that helped it soar to passage.

“It’s a little petty of him,” Rep. Henry Cuellar (D-TX) told Politico. “Actually, there were more Democrats who voted in favor than Republicans in the House side.”

Cuellar is right.

The House passed the USMCA on Dec. 19 with 193 votes from Democrats and 192 from Republicans.

Democrats spent months amending the trade agreement, adding provisions to ensure fair labor standards to prevent companies from outsourcing some jobs to Mexico. House Democrats also removed a provision they said would increase drug costs.

The snub comes as Trump fumes about impeachment. Currently, Trump’s defense team is making the case for why Trump shouldn’t be removed from office — making illogical arguments and focusing on debunked conspiracy theories in the process.

Ultimately, Trump wants to take credit for the trade deal in order to boost his reelection chances in November. And inviting Democrats to the signing ceremony to recognize their contributions to the trade agreement does not stick to his attack-Democrats-at-all-costs strategy.

Published with permission of The American Independent Foundation.

How Trump’s Trade Policies Failed American Workers

How Trump’s Trade Policies Failed American Workers

This article was produced by the Independent Media Institute

Donald Trump, the self-proclaimed “great negotiator” and author of The Art of the Deal, promised to use his bargaining skills to help the American worker.

Trump vowed to rewrite trade deals, stanch the offshoring of U.S. jobs and reinvigorate American manufacturing.

His behavior tells a different story. Both of the trade deals he produced so far—the original United States-Mexico-Canada Agreement (USMCA) and the “phase one” agreement with China—failed American workers.

Bad trade deals cost millions of American jobs. Trump’s brand of deal-making won’t bring them back.

Make no mistake, Trump inherited real trade problems. For more than 20 years, politicians of both parties failed to fix a broken system.

Corporations exploited trade agreements to shift family-sustaining manufacturing jobs to Mexico, China and other countries that pay workers low wages and deny them the protection of labor unions. They made boatloads of money offshoring jobs, but in the process, they robbed U.S. workers of their livelihoods and hollowed out countless American communities, decimating their tax bases and exposing them to epidemics of crime and opioids.

Cheating compounded the job losses. China subsidizes its industries, manipulates its currency and then floods global markets with cheaply priced goods, severely damaging U.S. manufacturing in steel, aluminum, paper, furniture, glass and other products.

“Work just started to dwindle,” recalled Bill Curtis, who eventually lost his cloth-cutting job at a Lenoir, North Carolina, furniture factory swept under by cheap Chinese imports.

Trump made fair trade—and standing up to cheaters—a centerpiece of his 2016 campaign.

He railed against the North American Free Trade Agreement (NAFTA), which empowered corporations to shift more than one million manufacturing jobs to Mexico. He excoriated China for illegal trading practices that siphoned off more than three million American jobs, and he vowed to stop the bleeding.

The labor movement was prepared to work with him to achieve its long-sought goals. But as president, he let workers down. America needs a comprehensive trade solution, but Trump’s policy lacks vision.

The omission of enforceable labor standards in the original NAFTA enabled U.S. corporations to move manufacturing jobs south of the border and take advantage of Mexican workers.

Mexican workers make a few dollars an hour, much less than their U.S. counterparts, and they lack the protection of real labor unions. Companies make deals with protection unions to muzzle complaints about wages and dangerous working conditions. Workers have no voice, and U.S. corporations get rich gaming this system.

But Trump’s version of the USMCA also lacked specific mechanisms to enforce labor standards. Because he failed to deliver, labor unions and Democratic members of Congress stepped into the breach and did the hard work of fixing the deal so that it provides real protections for workers and jobs in all three countries covered by the agreement.

Congressional Democrats traveled to San Luis Potosi, Mexico, to visit a Goodyear plant that pays some workers less than $2 an hour, exposed them to hazardous conditions and fired dozens who dared to strike. Goodyear, which laid off workers in Virginia and Alabama while operating the low-cost Mexican plant, refused to let the Congress members through the door.

But the visit showed the importance of incorporating worker protections into the USMCA. Prominent Democrats, including Sen. Sherrod Brown of Ohio, Rep. Rosa DeLauro of Connecticut, House Ways and Means Committee Chairman Richard Neal of Massachusetts and House Speaker Nancy Pelosi. refused to pass the legislation until it represented a significant improvement over NAFTA.

Under the revised version of the USMCA, Mexico must follow through with promised labor reforms, such as giving workers the right to organize, or face enforcement actions. When Mexican workers join unions, their wages will rise, giving U.S. employers less incentive to relocate jobs.

In addition, the revised version makes it easier for the U.S. to initiate complaints against Mexican companies for trade violations, provides for multinational inspections of Mexican factories and gives the U.S. the authority to impose significant penalties and ultimately to block violators’ goods.

That’s real enforcement.

Congress passed the revised version of the USMCA, not Trump’s toothless version. The deal is far from perfect, but it’s a significant improvement over NAFTA.

Trump’s failure to follow through on labor standards in the USMCA showed his murky strategy on trade. His use of tariffs does, too.

In 2018, he slapped steel and aluminum tariffs on the whole world—alienating global trading partners—when the right approach would have been a strong, surgical strike against China’s dumping. While the tariffs had some positive effects, they’re no substitute for big-picture fixes Trump has yet to deliver.

On January 15, Trump unveiled “phase one” of a new trade deal with China. It’s little more than window dressing and an effort to defuse bilateral tensions during an election year.

The deal removes some tariffs on Chinese goods and theoretically commits China to purchasing $200 billion in pork, jets, energy and other U.S. products. It gives new market access to U.S. financial firms, allowing Wall Street to line its pockets. But it does nothing to address job loss.

The U.S. lost 3.7 million jobs to China since 2001, 700,000 of them during Trump’s presidency, and the trade deficit actually increased during the first two years of his term.

The loss of American jobs is no accident. It’s part of China’s policy to destabilize competitors and boost its own power.

China subsidizes its industries, giving companies raw materials, land and cash. Then the companies sell their products abroad at prices that U.S. companies—lacking government handouts—can’t match.

In addition, China allows its industries to overproduce and flood global markets, further driving down prices with gluts of steel, aluminum and other products. And it artificially depresses the value of its currency to encourage still more overseas sales.

These are the major problems that U.S. trade policy must address, but Trump’s phase-one deal doesn’t resolve any of them.

Instead, before announcing the phase one agreement, he backpedaled. He rescinded China’s designation as a currency manipulator.

Now, just like they did with the USMCA, labor unions and Democratic members of Congress must be ready to wade in and demand improvements to the China deal.

More jobs will disappear unless Trump pursues a cohesive trade strategy that prioritizes the American worker. Now, he’s just helping to perpetuate the broken system he bitterly criticized.

Trump’s Trade War Cost Wisconsin 800 Dairy Farms

Trump’s Trade War Cost Wisconsin 800 Dairy Farms

The state of Wisconsin, famous for its cheese, lost 10 percent of its dairy farms in 2019, Dairy Herd Management reported on Thursday. The loss of 818 dairies was the largest decline in Wisconsin history.

Trouble for dairy farmers started in 2018, when Donald Trump engaged in a protracted trade war with China. In retaliation for increased tariffs from the United States, China placed tariffs on a number of U.S. agricultural exports.

As a result, exports of U.S. dairy to China dropped by more than 50 percent in 2019, according to CNBC.

The Trump administration rolled out a multibillion dollar bailout for farmers as the trade war dragged on, promising to make up for the financial damage caused by Trump’s policies.

However, milk producers say the aid is not enough.

Paul Bleiberg, vice president of government relations at the National Milk Producers Federation, told CNBC that the bailout “fell short of where the damages were.” The comments mirrored a statement made in late 2018 by Jim Malhern, president of the National Milk Producers Federation.

“This [bailout] was supposed to make sure farmers were not the victims of this trade policy,” Malhern told the New York Times. “I think most agriculture producers feel that the payments have not come close to making up for the damage for the tariffs.”

According to Dairy Herd Management, the rate of dairy farmer loss in Wisconsin “has more than doubled in the last few years.”

Democratic leaders were quick to call out Trump’s role in exacerbating problems in the dairy industry.

“We have a genuine dairy farm crisis, and Trump is making it worse,” Ben Wikler, chair of the Democratic Party of Wisconsin, wrote on social media on Friday.

“These family farms are the lifeblood of so many of Wisconsin’s local economies who are now suffering because of Trump’s broken promises to have their backs,” Philip Shulman, spokesperson for the Democratic Party of Wisconsin, said in an emailed statement. “Instead of trying to buy them off with bailouts, he should wake up to the reality thousands of other farmers across our state are facing.”

More broadly than dairy farmers, the rate of farm bankruptcies has dramatically increased during Trump’s tenure. An August 2019 analysis showed farm bankruptcies in the midwest have increased by 45 percent since Trump started his trade war with China.

“Trump has repeatedly broken his promise to look out for the dairy industry,” Maddie McComb, spokesperson for the DNC, said in a statement. “Now farmers are paying the price as over 800 farms closed last year in Wisconsin and thousands more struggle to make ends meet under Trump’s watch. It’s clear that the crisis facing American farmers is escalating and the best solution is to defeat Trump in November.”

Trump narrowly carried Wisconsin in the 2016 election, edging out Hillary Clinton by less than 25,000 votes out of a total of 2.8 million votes cast.

Democrats are hoping to win the state in 2020, and will host the party’s July national nominating convention in Milwaukee.

This article has been updated to correct the spelling of Wisconsin Democratic Party spokesman Philip Shulman’s name. A previous version of this story referred to him as Phillip Shulman.

Published with permission of The American Independent Foundation.

IMAGE: Photo by Elvis Kennedy

New Research Exposes Costs And Lies Of Trump’s Trade War

New Research Exposes Costs And Lies Of Trump’s Trade War

Two new economic working papers from the National Bureau of Economic Research shared on Monday revealed the sweeping impacts of President Donald Trump’s tariffs and trade war and undercut his repeated claims about his policies’ supposed benefits.

Trump has repeatedly said, for instance, that the costs of his tariffs — which are just taxes on U.S. imports — are paid entirely by foreign governments and firms, rather than by Americans. But a paper by researchers Mary Amiti of the Federal Reserve Bank of New York, Stephen J. Redding of Princeton University, and David Weinstein of Columbia University directly rebuts that claim.

The authors noted that initial research had pointed to the fact that Americans were bearing the burden of the tariffs in 2018, when Trump’s aggressive trade tactics were initially enacted. But it wasn’t clear, they said, whether this would continue as the tariffs persisted.

And yet, they found that “data for most of 2019 does not alter the main conclusions of earlier studies. U.S. tariffs continue to be almost entirely borne by U.S. firms and consumers.”

They continued:

Similarly, we also finnd that the substantial redirection of trade in response to the 2018 tariffs has accelerated. Among goods that continue to be imported, a 10 percent tariff is associated with about a 10 percent drop in imports for the first three months, but this elasticity doubles in magnitude in subsequent months. These higher long-run elasticities suggest that the 2018 tariffs—many of which were applied in October—are only now having their full impact on U.S. import volumes.

What this means is that the longer the tariffs have remained in place, the more firms that rely on the imports shift away to buying other products. It also indicates that foreign firms aren’t dropping their prices to accommodate the tariffs, which would have meant foreigners rather than Americans are swallowing the costs of the policy, as Trump likes to claim.

There are some exceptions to this general finding, though, because the researchers noted that different sectors reacted differently to tariffs.

“The data show that U.S. tariffs have caused foreign exporters of steel to substantially lower their prices into the U.S. market,” they wrote. “Thus, foreign countries are bearing close to half the cost of the steel tariffs. Since China is only the tenth largest steel supplier to the U.S. market, these costs have largely been borne by regions like the EU, South Korea and Japan.”

But even in this case, where foreign firms are lowering prices because of steel tariffs, the authors added that this is actually “bad news for workers hoping that steel tariffs will bring back jobs.” The paper went on: “Indeed, the fact that foreign steel producers have lowered their prices in response to U.S. tariffs may help explain why U.S. steel production only rose by 2 percent per year between the third quarter of 2017 and the third quarter of 2019 despite 25 percent steel tariffs.”

Of course, all policies have some trade-offs, and some might think that even the costs of the tariffs are worth some other outcome. The problem is, though, that Trump has rarely if ever been honest about what the real costs of the tariffs are — he’s acted as if they are an unalloyed good.

And a separate paper, also from NBER, took a look at the impact of Trump’s tariffs on exports and also found major costs. Kyle Handley of the University of Michigan, Fariha Kamal of the U.S. Bureau of the Census, and Ryan Monarch of the Federal Reserve Board of Governors examined used what they describe as “confidential U.S. firm-trade linked data” to analyze the effects of the tariffs on U.S. exporting companies. One of the stated goals of Trump’s trade policy, after all, has been to increase U.S. exports and manufacturing.

The researchers found, however, that the tariffs appear to have “significantly dampened U.S. export growth.”

Why would exporters be hurt by tariffs, which again, are just import taxes? Because the taxes fell on many “intermediate goods” — goods that are used to make other products, which can then be sold by Americans to foreign countries.

“[We] find that almost one fourth of U.S. exporters imported products subject to new import tariffs,” they wrote. “Moreover, these firms account for more than 80 percent of U.S. exports by value. Affected firms were disproportionately larger than the average exporter in terms of total exports, employment, and number of plants.”

They even estimated how much these affected companies per employee, finding that the tariffs cost “$900 per worker overall and about $1,600 in the manufacturing sector.”

Overall, they report that the tariffs reduced export growth by about 2 percent. Had the tariffs not been targeted at such widely used intermediate goods, they found, the negative impact on export growth could have been slashed by 60 percent.

“Do not tax intermediate goods, or this is what happens,” said economist Noah Smith on Twitter in response to the paper.