Trade

Thoughts on Trade

Featured image The Dow Jones has shed nearly 1,000 points over the last couple weeks, ostensibly over fears of an escalation of trade tensions between Trump and our major trading partners, some of whom have begun imposing retaliatory tariffs of their own. (Though who really can say exactly what moves the stock market on any given day or week—talk about fake news). Trade wars seldom work out very well, but if anyone »

Trump Nails Trade Hypocrisy

Featured image President Trump’s participation in the G7 conference in Canada focused on trade. Once again, he made it clear that he wants our trading partners’ tariffs and other barriers to U.S. imports to come down. This gave the American press the vapors, but why? Our president certainly should try to reduce obstacles to sales of American goods. President Trump gave a press conference this morning in which he expressed his belief »

It’s on: A trade war with our allies

Featured image Yesterday, President Trump imposed tariffs on steel and aluminum from Canada, Mexico, and the European Union. These U.S. allies promptly hit back. The EU said it would impose import taxes on, among other items, bourbon (this means you, Mitch McConnell). Mexico said it would levy tariffs on American farm products. Canada is set to impose tariffs on dozens of U.S. products including not just steel and aluminum products but also »

Trump backs down on China tariffs

Featured image The U.S. and China have reached a deal on trade. Treasury Secretary Mnuchin said this about the deal: Right now, we have agreed to put tariffs on hold while we try to execute the framework. We are immediately going to follow this up with . . . hard commitments in agriculture, where we expect to see a very big increase — 35-40 percent increases — in agriculture this year alone. »

A trade war we’d be unlikely to win

Featured image According to President Trump, trade wars are easy to win. This may be true in some cases, but a trade war with China would be anything but easy. Steve says, based on sources close to Trump, that the president believes we can win a trade war with China because China needs the U.S. more than the U.S. needs China. Thus, the theory goes, the Chinese will blink first. Trump’s premise »

A Better Way to Pressure China?

Featured image As I mentioned here once before, I know from my own sources close to Trump that he believes we can indeed win a trade war with China because China needs the U.S. more than the U.S. needs China, and thus that the Chinese will blink first. Maybe this is correct, and maybe Henry Olsen is correct to argue that tariff policy should be understood politically rather than economically. Generally I »

Trade War? Not So Fast!

Featured image Steve has published a post on President Trump’s order on trade with China, and Paul is working on one. I will add my thoughts briefly. Trump’s order, which expresses the intent to place tariffs on certain Chinese products in retaliation against China’s unfair trade practices, prompted a wave of hysteria yesterday, including a selloff in the stock markets. This assessment in the Minneapolis Star Tribune is typical: President Donald Trump »

Real Trade War or Art of the Deal?

Featured image A trade war with China? As it happens, I spent some time early in the week with Steve Moore of the Heritage Foundation, who has been close to Trump and who, along with Trump’s new senior economic adviser, Larry Kudlow, helped fashion the tax reform bill recently enacted. He has shared with me a couple of times in recent months his private conversations with Trump on economic issues. Steve said »

More Good Economic News, Plus Tariffs [Updated]

Featured image The news on the economic front continues to be excellent. The Labor Department’s February jobs number came in at 313,000, smashing all forecasts. In addition, jobs numbers for both December and January were upgraded. The number of those employed surged in February by 785,000. The sectors where jobs increased the most are significant, too: Construction jobs led the way, with 61,000 new positions, followed by retail and professional and business »

Cohn-Heads

Featured image So Trump’s senior economic adviser, Gary Cohn, is resigning because of Trump’s announcement of steel and aluminum tariffs. The tariffs are likely a bad idea—unless you think Trump is merely making this move as part of his “art of the deal” strategy, and will end up with some trading partners altering their behavior and trading rules. Perhaps it will work out this way. It wouldn’t surprise me if it does. »

The problem with Trump’s tariff plan

Featured image Trade policy is like immigration policy in the sense that whichever policies are selected, there will be winners and losers among Americans. For example, to oversimplify, tolerating illegal immigration hurts Americans who lose work to illegal immigrants or have their wages driven down. But it helps businesses that rely on cheap labor, their customers, and those well-off Americans who want cheap gardeners and the like. Trade policy, such as tariffs, »

On Tariffs, Hold the Hysteria

Featured image President Trump said last week that he intends to use powers granted him by Congress to impose import duties on steel and aluminum. That was all it took for the press to become free traders. Gloom and doom are everywhere, as reporters gleefully tell us how our trading partners are planning to retaliate and how Trump’s tariffs will damage the economy. I don’t recall a similar reaction when it was »

The Travails of Trump

Featured image Joseph Epstein wrote a terrific article in the Wall Street Journal earlier this week with the perfect headline: “The Only Good Thing About Trump Is All His Policies.” Just so. The Trump Administration has governed spectacularly in most respects, better than I had thought possible (until perhaps this week—more on that presently). It reminds me of the reverse of what my old mentor M. Stanton Evans used to say about »

Free trade in the era of Trump

Featured image Kevin Williamson argues that the Trumpian position on trade, which he views as part of an anti-capitalist wave on the right that’s not limited to Trumpists, creates an opening for politicians on the center-left. He acknowledges that the American center-left shows few signs of seizing the opportunity to be champions of free trade, but maintains that on this issue, Barack Obama and Hillary Clinton were “more free-enterprise leader[s] than President »

Europeans Endorse GOP Tax Plan

Featured image Five European finance ministers have objected to the GOP tax plan on the ground that it is too favorable to the United States: Finance ministers from Germany, France, Britain, Italy and Spain say they have ‘significant concerns’ about some of the US President’s tax initiatives and fear they could harm the global economy. In a letter to US Treasury Secretary Steven Mnuchin, the ministers said the tax overhaul could risk »

Breaking: Trump to impose tariff on Canadian soft lumber

Featured image I just left the reception for conservative news media held in the Roosevelt Room of the White House late this afternoon. I will write up a fuller account later. For the moment I want to report President Trump’s announcement that he would be imposing a 20 percent tariff or tax on softwood lumber imported from Canada. President Trump was accompanied by Secretary of Commerce Wilbur Ross. He invited Ross to »

Trump nixes the TPP

Featured image President Trump was busy on his first “working day” in office. The Washington Post describes, albeit in loaded terms, the most important actions he took today. In my opinion, the single most important action was Trump’s executive order formally withdrawing the U.S. from the Trans-Pacific Partnership (TPP) trade deal. This move will have both economic and strategic consequences, and the strategic consequences may have economic ramifications down the road. I »