Tag: trans pacific partnership
How Did Trump Flub China Policy? Let's Count The Ways

How Did Trump Flub China Policy? Let's Count The Ways

Was Trump right about China? No. Let's count the ways.

One: Trump's entire conception of the China challenge was fallacious. Trump thought the problem China posed was that it sold us too many things, resulting in a bilateral "trade deficit," which meant that China was "winning" and we were "losing."

While it is true that some industries lost jobs to Chinese competition over the past two decades, it is also true that other industries gained jobs due to trade with China and other countries, and lower-income consumers were particularly enriched by the abundance of inexpensive goods China and others supplied. So were manufacturers who were able to use less expensive Chinese imports. One in five American jobs is devoted to exports, which often rely on imported components.

Two: Trump focused exclusively on one figure, the trade deficit. He wailed that the trade deficit with China amounted to "rape" and promised that under his "America First" leadership, we would "fight for America's blue-collar workers." Economists nearly unanimously consider the trade deficit to be a useless statistic for many reasons, including: 1) a trade deficit reflects the fact that Americans have lots of money to spend; 2) it fails to consider that when China sells us goods and we pay in dollars, those dollars come back to us in the form of capital investment; 3) it's super complicated to figure out bilateral balances of trade because so much trade in the 21st century involves multiple countries; and 4) trade deficits are associated with economic growth, not decline.Under his leadership, the U.S. trade deficit was the largest in a decade — a failure, by Trump's lights.

The data are also now in on Trump's own "momentous" 2020 trade deal with China. As part of his strategy to get this supposedly history-making deal, Trump had imposed tariffs (taxes) on $200 billion worth of Chinese imports. China retaliated with tariffs on $110 billion in American products, particularly targeting farmers. Trump incessantly claimed that China was paying those tariffs, but as a new report for the Peterson Institute for International Economics underlines, that was untrue. Trump's import taxes were paid entirely by American businesses and consumers. This brought the Treasury $66 billion, almost exactly the amount Trump paid out to U.S. farmers to compensate them for lost exports. Had the trade war never started, the PIIE estimates, U.S. exports to China would have been nearly 20 percent higher in 2020.

The tit-for-tat tariffs continued throughout the Trump presidency until the great 2020 trade deal negotiated with his "very, very good friend Xi Jinping." The deal, Trump blustered, was "incredible ... one of the largest deals ever."

The actual results? It was a flop. Trump said the Chinese government would remove its tariffs. They didn't. Trump said they would buy $200 billion in U.S.-manufactured goods. They purchased only a little more than half of that, which did not equal U.S. exports to China from before the trade war.

Three: Trump should have seized upon the golden opportunity available at the start of his term to enhance U.S. exports and rein in China — the Trans-Pacific Partnership Agreement. Instead, one of Trump's first acts was to withdraw from the TPP. Sadly, the Democratic Party has also abandoned free trade.

None of this is to say that we shouldn't negotiate with China to curb their unfair trade practices, only that the ideal way to do so is with allies who share our values. In any case, the emphasis on trade misses the point: China is a bad international actor in many ways, and frankly, when you consider Hong Kong and Taiwan and the export of surveillance technology to brutal dictatorships and the Uyghurs and the alliance with Russia, well, trade is pretty far down on the list of sins.

US-China Trade negotiations during the Trump administration.

Trump’s Trade Policy Failed — And Biden Should Abandon It

When he became president, Joe Biden summarily reversed his predecessor's policies on a range of issues, including climate change, immigration, taxes, social welfare and police reform. But on international trade, it's almost like Donald Trump never left.

Trump had a primitive view of this issue. Good, in his view, were exports, trade surpluses, tariffs and trade wars. Bad were imports, trade deficits and multilateral trade agreements.

He saw global commerce as a zero-sum game, in which anything that benefited another country must come at our expense, and vice versa. He was unable to grasp that exchanges of goods and services across national borders could — and do — make people in every nation better off.

So, Trump slapped tariffs on steel, aluminum, solar panels and washing machines. He put tariffs on some $360 billion worth of Chinese apparel, appliances, machinery, shoes and more. He threatened to slap import taxes on cars made abroad.

He pulled out of the Trans-Pacific Partnership, a free-trade accord with 11 other countries. He ended talks on the Transatlantic Trade and Investment Partnership, a major effort to lower trade barriers between the U.S. and the European Union. He nullified the World Trade Organization, which resolves trade disputes, by blocking the appointment of new members to the body that hears those cases.

But his efforts accomplished nothing worthwhile. They raised prices to American consumers while punishing American companies that use steel and aluminum. What the Tax Foundation described as "one of the largest tax increases in decades" now costs the typical American family more than $1,200 a year.

The tariffs failed to create jobs in the steel industry, which shrank even before the pandemic, and produced only a tiny boost in aluminum jobs. But a study by economists at the consulting firm The Trade Partnership estimated they would eliminate some 145,000 jobs in other sectors.

Our trading partners retaliated against U.S. companies with tariffs of their own. American farmers were hit so hard that Trump had to come up with $23 billion to cushion the blow.

Nor did his strategy reduce our trade deficits. The overall U.S. trade deficit last year was the biggest since 2008. China has not given up the practices Trump was trying to stop.

In March, Gallup found that 63 percent of Americans — including 79 percent of Democrats — have a positive view of trade, with only 32 percent disagreeing. Biden was part of the Obama administration, which negotiated the Pacific trade deal and pressed hard to reach an agreement with the EU. But the Democratic Party has somehow fallen under the sway of protectionists, and he's shown little interest in resisting.

He's left most of Trump's tariffs in place, and his trade representative, Katherine Tai, said removing them would be a bad idea. She vowed a "worker-centric" trade policy focused on raising wages, omitting such goals as expanding commerce and fostering competition. Her stance fits the prevailing progressive superstition that commerce with the world makes us poorer.

That view is bad economics and bad history. In her 2019 book Open: The Progressive Case for Free Trade, Immigration and Global Capital, Reed College economist Kimberly Clausing argues that tariffs "harm consumers, with particularly harmful effects for low- and middle-income workers," while creating disruptions that eliminate jobs in affected industries. Nearly nine out of ten losses in manufacturing jobs, she notes, are the result of technological advances, not international competition.

Trump portrayed China as a ruthless predator that exploits global rules for competitive advantage. But that's the very reason that he should have kept the U.S. in the Trans-Pacific Partnership, which was designed to facilitate trade among the Pacific Rim countries — not including China.

It would have put strong pressure on Beijing to reform its trade practices to gain admission. But with the TPP dead at Trump's hands, 15 Asian countries opted for a different trade agreement. In this accord, China is in, and the U.S. is out.

Trump's sabotage of the WTO's appellate body was another own goal. From 2002 through 2018, it had heard 23 cases involving disputes between the U.S. and China — with the U.S. winning 20 and China winning zero (with three pending). The U.S. should be pushing the WTO to crack down on China's abuses, not kneecapping the only system for addressing them.

As a rule, any policy Trump embraced is one that ought to be abandoned. Trade is not the exception.

Steve Chapman blogs at http://www.chicagotribune.com/news/opinion/chapman. Follow him on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

#EndorseThis: Trump Sends America Into Rapid Decline — But Being Losers Isn’t All Bad

#EndorseThis: Trump Sends America Into Rapid Decline — But Being Losers Isn’t All Bad

By now everyone has realized that Donald Trump isn’t “making America great again.” Indeed despite his blustering rhetoric, Trump’s presidency has consistently elevated China, Russia, and other US rivals, while diminishing our country’s prestige and prospects every day. From the Trans Pacific Partnership to the Paris Climate Accords, the botched diplomacy of this buffoonish president is presented in authoritarian countries that “democracy doesn’t work.” (It certainly didn’t work last year, when the candidate who got the most votes came in second.)

But there’s a brighter side to Trump’s dizzying acceleration of American decline. As Ronnie Chieng tells Trevor Noah, being the world’s number two power is much easier and more fun than being number one!

Not safe for work.

In Asia, Obama Faces Trade Pact Test Amid U.S. Opposition

In Asia, Obama Faces Trade Pact Test Amid U.S. Opposition

By Roberta Rampton and David Brunnstrom

WASHINGTON (Reuters) – When President Barack Obama travels to Asia next week, he will try to reassure leaders in the region that he still has the clout to deliver U.S. approval for the sweeping Trans-Pacific Partnership, even though the two candidates vying to succeed him and a congressional leader have said the 12-nation trade deal should not move forward.

The trade pact is the economic pillar of Obama’s broader plan to shift U.S. foreign policy toward Asia and counter the rising economic and military might of China.

“It would be a real setback for Obama’s legacy and for the rebalance strategy if TPP were not to be ratified,” said Matthew Goodman, a former Obama foreign policy adviser now at the CSIS think-tank in Washington.

Domestic politics have put the deal’s future in doubt. U.S. Senate Majority Leader Mitch McConnell said on Thursday the Senate would not vote on the pact this year, punting it to the next president, who will take office on Jan. 20.

Both Republican Donald Trump and Democrat Hillary Clinton have said they oppose the TPP, citing past trade deals that have cost Americans jobs. As Obama’s Secretary of State, Clinton backed the Pacific trade deal.

Obama has said the TPP will boost labor and environmental standards – fixing some of the problems seen in past trade deals like the North American Free Trade Agreement – and give both large and small U.S. companies access to the world’s fastest-growing markets.

The White House said failure to approve the TPP would hurt U.S. interests in Asia, where some leaders made politically tough decisions to advance the deal.

“In this part of the world, which is the largest emerging market in the world, TPP is seen as a litmus test for U.S. leadership,” Ben Rhodes, Obama’s deputy national security adviser, told reporters on Monday.

“We would be stepping back from that leadership role, we would be ceding the region to countries like China who do not set the same types of high standards for trade agreements were we to not follow through with TPP,” Rhodes said.

Estimates of the potential economic impact of TPP vary, but most show little meaningful growth for the U.S. economy. Estimates from the Peterson Institute, an economic think-tank in Washington, suggest that TPP would raise growth by 0.5 percent after 15 years.

Even those estimates, which amount to a rounding error in U.S. economic output, have been criticized as being too optimistic due to their treatment of so-called non-trade measures that are included in the analysis.

But White House spokesman Josh Earnest said polls shows most Americans support the deal, creating “a path for us to get this done” before Jan. 20.

In an interview, Former U.S. Trade Representative Susan Schwab described the odds of the TPP passing as slim, but not impossible.

“There’s history of candidates criticizing previous administrations’ policies on trade and then having to figure out how to live with them in office, and they include presidents Obama and (former Democratic president Bill) Clinton,” said Schwab, who served as trade representative under former Republican President George W. Bush.

Obama arrives in China on Saturday where he will meet President Xi Jinping and attend the G20, and then travel to Laos for two additional regional summits, returning to Washington on Sept. 9.

(Additional reporting by Timothy Gardner, Alana Wise and Timothy Ahmann; Editing by Andrew Hay)

Photo: U.S. President Barack Obama pauses while hosting a conversation on community policing and criminal justice at the White House in Washington July 13, 2016. REUTERS/Kevin Lamarque