Smoot-Hawley II?

Featured image I don’t suppose many people care, but Donald Trump’s latest venture into trade policy is idiotic. Trump’s tariff plan is so dumb that for once, the Washington Post is actually right: “Trump vows massive new tariffs if elected, risking global economic war.” Putting WaPo in the right isn’t easy, but Trump managed to accomplish it: Among the ideas [Trump and his advisers] discussed was Trump’s plan to enact a “universal »

Infant Formula Revisited

Featured image The infant formula shortage is a crisis for many American families, and the end is not in sight. What caused supplies of a staple product to run out? The most thorough explanation I have seen comes from Scott Lincicome of the Cato Institute. (Numerous links in the original are omitted here.) Lincicome fingers government as the culprit, with protectionism as villain number one: U.S. policy has exacerbated the nation’s infant »

USMCA Goes Into Effect Today

Featured image President Trump has an excellent record to run on. His tax cuts, trade deals and deregulation generated the strongest economy, probably, in American history. Overseas, we are at peace while still strongly advancing American interests. The USMCA, the trade agreement with Canada and Mexico that replaced NAFTA, goes into effect today. Six months ago, I would have said that this is a big deal, and is the kind of news »

The horror: Trump balked at being spoon fed conventional wisdom

Featured image Two of the Washington Post’s Trump-despising reporters, Carol Leonnig and Philip Rucker, have a new book about the president called A Very Stable Genius. In advance of its publication, the Post ran an excerpt in today’s paper. The excerpt describes how three of Trump’s then-top advisers — James Mattis, Rex Tillerson, and Gary Cohn — organized a session for the president designed to sell him on key aspects of conventional »

Landmark Trade Deal With China; New York Times Hardest Hit

Featured image President Trump signed the “Phase One” trade agreement with China today at the White House. The agreement is far-ranging; you can read its entire text here. Among other things, it includes “commitments from Beijing to purchase $200 billion of U.S. products over the next two years, halt intellectual property theft and refrain from currency manipulation.” In return, the U.S. has reduced or eliminated some tariffs on Chinese-manufactured goods, but other »

Democrats Cave On Important Trade Agreement

Featured image The Trump administration negotiated the U.S.-Mexico-Canada Agreement (USMCA), an important update and revision to NAFTA, a year ago, but House Democrats have refused, until now, to bring it up for a vote. Democrats have been focused exclusively on impeachment and other means of undermining the Trump administration, and didn’t want to give President Trump an important victory. Happily, that opposition has now collapsed, and Nancy Pelosi announced on Tuesday that »

Trade Deal With China Is a Blockbuster

Featured image What the Democrats fear most is happening: President Trump and his negotiating team are reaching wide-ranging agreements with China that will be a huge boon to the United States. In an Oval Office press conference yesterday, President Trump and China’s Vice Premier announced a Phase 1 set of agreements that will be documented over the next several weeks. The video of the press conference is embedded below; Trump’s performance was »

Are American companies suffering from an outbreak of “bad management”?

Featured image Here’s President Trump arguing that bad management, not tariffs, is what’s hurting American companies: A lot of badly run companies are trying to blame tariffs. In other words, if they’re running badly and they’re having a bad quarter, or if they’re just unlucky in some way, they’re likely to blame the tariffs. It’s not the tariffs. It’s called “bad management.” If you think about it for half a second, this »

A trade war that’s not so easy to win

Featured image Reportedly, there is a division within the White House over how to proceed with China on trade. One camp, which includes Steven Mnuchin and Larry Kudlow, is optimistic that the administration can reach a trade deal with Beijing as things stand now. But Peter Navarro, the senior trade adviser, believes stronger tactics are required to change China’s approach. President Trump is said to agree with Navarro. But what if both »

Whither China?

Featured image The current unrest in Hong Kong may be the most important geopolitical story of this decade, depending how it plays out. Concerning which, a few observations: • We know enough from recent decades to declare how dictatorships end: they end only when the rulers lose their nerve to kill their own people in large numbers. Forget all the fancy models and theories of our idiot schools of international relations. This »

U.S. designates China a currency manipulator

Featured image The U.S. government has determined that China is manipulating its currency. It will engage with the International Monetary Fund to try to eliminate this unfair form of competition. If there is no progress within a year, China could face sanctions including its firms being prohibited from competition for U.S. government contracts. Treasury Secretary Steven Mnuchin made the announcement today. Stock prices fell dramatically, with the Dow Jones average shedding more »

Trump Makes a Deal

Featured image Hand-wringing over imminent imposition of tariffs on goods imported from Mexico can stop: President Trump announced a deal tonight: I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended. Mexico, in turn, has agreed to take strong measures to…. — Donald J. Trump (@realDonaldTrump) »

A Better Way to Fight China?

Featured image Scott noted this morning the 30th anniversary of China’s brutal crackdown on the pro-democracy movement in Tiananmen Square. This set me to thinking about Trump’s trade strategy with China (and now Mexico) and an old memory. Almost 12 or 15 years ago now I was teaching a class at Georgetown as a visiting lecturer, and one of my students was a young Chinese lady who seemed very bright, though quiet »

Trade War Is Hurting Trump

Featured image I think President Trump is doing the right thing in pushing back against theft of intellectual property and other Chinese misdeeds, but there is evidence that he is paying a political price. President Trump’s approval ratings normally move within a very narrow range, consistent with the electorate’s polarization. But he has been doing well lately, with his approval rating sometimes over 50% in the Rasmussen survey. But now he has »

Trump set to increase tariffs on $200 billion worth of Chinese goods

Featured image Last week, President Trump and the Red Chinese appeared to be making major progress towards a trade deal. However, Trump’s team says that the Chinese have reneged on commitments made during the negotiations. Consequently, the administration is prepared to increase tariffs on $200 billion worth of Chinese goods. It plans to announce the increases on Friday morning. The New York Times’ story on this development is full of speculation about »

An inflection point in U.S.-China relations

Featured image Michael Auslin, an Asia expert at the Hoover Institution, examines what I consider the most important foreign policy issue of our time — U.S. relations with China. Auslin believes this may be “crunch time” for these relations. Auslin is happy with President Trump’s China policy so far: The Trump administration’s full-court press against China is going strong, buttressed by a dramatic shift in opinion among the foreign-policy community, now increasingly »

Good news: China is nervous

Featured image The New York Times reports that China’s leader, Xi Jinping, abruptly summoned hundreds of officials to Beijing recently. He did so, says the Times, in order to convey a sense of “anxious urgency.” The Communist Party, Xi told the officials, faces major risks on all fronts and must batten down the hatches. “Globally, sources of turmoil and points of risk are multiplying,” [Xi] told the gathering in January at the »