[CTC] Don’t Misjudge Trump’s Trade Tirade

Tue Feb 27 09:28:06 PST 2018

Two pieces below….

https://www.wsj.com/articles/dont-misjudge-trumps-trade-tirade-1519689302 <https://www.wsj.com/articles/dont-misjudge-trumps-trade-tirade-1519689302?mod=searchresults&page=1&pos=1>

Don’t Misjudge Trump’s Trade Tirade

The president may be shifting the discussion more than GOP elites think is possible.

By Walter Russell Mead
Feb. 26, 2018 6:55 p.m. ET

President Trump’s freewheeling speech Friday to the Conservative Political Action Conference won’t displace the Gettysburg Address in the pantheon of presidential rhetoric. But anyone concerned about the future of American foreign policy, and trade policy in particular, should take it seriously.

Once again, Mr. Trump demonstrated the skills and the arguments that enabled him to steal voters away from the Republican politicians and intellectuals who thought they owned the party’s base. Whatever the ultimate fate of the Trump administration, the president’s speech showed why his controversial ideas about trade are likely to remain politically influential.

“Under my administration, the era of economic surrender is over,” Mr. Trump told the crowd. “We’re renegotiating trade deals that are so bad, whether it’s Nafta, or whether it’s World Trade Organization, which created China. . . . China has been like a rocket ship ever since. And now, last year, we had almost a $500 billion trade deficit with China. We can’t have that.” It’s easy to underestimate the political potency of this line of attack.

China’s 2001 admission to the WTO, Mr. Trump claims, gave it the opportunity to grow into a superpower capable of rivaling the U.S. In the 1990s, the bipartisan pro-China camp argued that giving Beijing permanent most-favored-nation status would accelerate its democratization and integration into the liberal world system. Skeptics, including one Donald J. Trump, were dismissed as protectionists and fools. It was, after all, the end of history. The world was flat, and all nations were marching together toward a peaceful and liberal future.

But China didn’t follow the plan. Instead of becoming a “responsible stakeholder” in the international order, Beijing has used its new economic might to launch a revisionist drive against American power and primacy that could define world politics for decades.

To Mr. Trump, but not just to him, this looks like a massive failure by the American foreign-policy elite. Not only does it seem to justify shifting toward a more protectionist trade policy, it reinforces the idea at the heart of Trumpism: that the Washington establishment is as incompetent as it is arrogant and condescending. Whether the subject is trade, crime, “fake news,” immigration, national defense or transgender service in the military, Mr. Trump seeks to depict the experts and professionals as contemptuous of Americans in flyover states, lost to common sense, and hopelessly inept.

China’s rise supports this narrative, which is why the president is unlikely to let the subject drop. He may have more success in shifting the discussion on trade within the Republican Party than many GOP power brokers think is possible. The Jacksonian populism that propelled Mr. Trump to victory in 2016 has a long history of being hostile to foreign competition and suspicious of free trade.

For all its political appeal, though, protectionism remains a dangerous drug. It could disrupt America’s alliances even as it drags down economic growth in the U.S. and abroad. It is a recipe for producing a larger, more intrusive and more corrupt government. Mr. Trump’s most consequential trade decision to date, withdrawing the U.S. from the Trans-Pacific Partnership, damaged American relationships in Asia while giving China a significant diplomatic opening.

At the same time, China’s refusal to limit its ambitions is a serious challenge to the assumptions behind the trade policies of the last generation. Countries like China and Russia have weaponized investment and trade to advance their revisionist agendas. The U.S. and its allies cannot simply ignore the extent to which this has disrupted Western economic assumptions. As a result, the task of defending liberal international trade is about to become more complex. The benefits of free trade are as real, and as important, as ever. But more than in the 1990s, national-security concerns must be taken into account as policy makers craft trade and investment policy.

Developing a 21st-century trade agenda for the U.S. is likely to be a long and contentious process. The danger today is that the friends of free trade will misjudge the political energy behind the neoprotectionist revival. Populists don’t offer answers to complex problems like this one, and the nostrums they propose are often misguided. But the questions raised by Mr. Trump and his supporters cannot be safely ignored.

https://www.telegraph.co.uk/business/2018/02/27/trump-calls-wto-catastrophe-amid-criticism-trade-deals/ <https://www.telegraph.co.uk/business/2018/02/27/trump-calls-wto-catastrophe-amid-criticism-trade-deals/>

The Telegraph

Trump calls WTO a 'catastrophe' amid criticism of trade deals

 Anna Isaac <https://www.telegraph.co.uk/authors/anna-isaac/>, economics correspondent 
27 FEBRUARY 2018 • 1:53PM

Donald Trump issued a stinging critique of international trade bodies and US trading partners in a speech on Monday.

The US President told a group of 39 state governors gathered at the White House that his administration was now focused on securing “fair and reciprocal trade deals” as a result of “not being treated fairly” in the past.

Mr Trump called the World Trade Organisation, the global regulator for trade between countries, a “catastrophe”. He added that it “makes it impossible for us [the US] to do good business.”

Chief among Mr Trump's concerns was that the US is more likely to lose in WTO judgements, because the body had “a minority of [US] judges”.

Trade with Mexico and Canada was also criticised, at what is a crucial time for negotiations in the Nafta trade deal <https://www.telegraph.co.uk/business/2018/01/19/nafta-talks-extended-fears-us-withdrawal-mount-ahead-davos/> between the two nations and the US.

Mr Trump said: “We lose a lot with Canada. People don’t know it. Canada is very smooth.  They have you believe that it’s wonderful.  And it is - for them. Not wonderful for us; it’s wonderful for them. So we have to start showing that we know what we’re doing.”

The President said that the US loses $130bn (£93bn) each year in trade with Mexico. Adding that the US would need to “get stronger and smarter” to avoid future losses.

Mr Trump also indirectly referenced Narendra Modi, Prime Minister of India, in the speech. Import tariffs on US motorcycles entering India have historically been as high as 100pc. Mr Trump said that Indian motorcycles have a zero tariff when imported to the US.

Remarking on the imbalance in trade taxes, the US President described a conversation in which Mr Modi offered to reduce the tariff to 50pc.

“What do I say?  Am I supposed to be thrilled?...It’s just not right. And we have many deals like that,” he said.

Mr Trump’s remarks also follow the recent victory of Toronto-listed aviation firm Bombardier  <https://www.telegraph.co.uk/business/2018/02/15/bombardier-turnaround-track-puts-boeing-battle-behind/>against US rival Boeing in a ruling by the US International Trade Commission.

The trade body found that the threat to level import duties of 300pc on Bombardier’s C Series jet was incorrectly based on the principle that the C Series was in direct competition with Boeing’s 737 MAX 7 plane.
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