[QUOTE="Reciprocity, post: 2594565, member: 58331"
You don't have to like Trump to understand what he is trying to do. He needs to have leverage that is real or there is no negotiating. There has been a lot of talk and rarely any action on things like dumping, currency manipulation and IP theft. This president is crazy enough to actually do something about it and China and Mexico know that now.
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Well said![/QUOTE]
On the Tariffs
The problem with both Wilbur Ross' statement in support of Trump and the quoted responses above is the single zero-sum assumption that you can do this industry by industry without considering secondary and tertiary effects. China, for example, is little affected by the tariffs and will not respond at all to any threat. That is their way to deal with bullies. Canada, on the other hand, has lots of hydro so has a competitive advantage on aluminum which is highly dependent on electricity. If I remember correctly, we actually export more steel to Canada than we import from them. If memory serves, how does this hurt them?
The Missing Link in the Argument
Among tertiary and perhaps fourth order effects, is the complicated planning process for any producers of finished products, like automobiles, and inflation induced by higher cost imports by retail consumers. This is too complicated for Trump supporters, including some labor unions who should have listened to Bernie had they the chance. Of course if you want to divide the labor movement against itself, our European allies, who are already threatening retaliation, and our northern and southern neighbors, then this disruption is a brilliant maneuver in a week fraught with bad karma. I haven't a feel for Japan's reaction. Russia, of course, will love it.
Dangers, Truth or Consequences
I hope you're right no trade war will ensue. But we have a few pimples erupting now. The major one is a continuing erosion in the authority of the presidency resulting in a more unpredictable international environment. Buddhists have a metaphor in an arrow someone has stuck in you. Anger at the pain is another arrow, especially when it clouds judgment in considering how to remove it or what to do after you recover. Trump likes to disrupt things in order to blame others. The really responsible folk try to clean house first, and then respond. Politics is like driving on ice; not for amateurs.
Hidden Benefit of Weaker Presidents
My best student critics were Libertarians. They were consistent on abortions and the death penalty, for example. Our after class discussions were the best I had, except for those over beer. I regret never asking them how they would finance government. I also regret not asking them about international politics. I assume from sniffing the atmosphere today that Libertarians are softer on foreign policy and aware of the crucial mistakes we have made since the Spanish American War. I am a revisionist on U.S. foreign policy so welcome a less assertive role. However, from a practical standpoint, the best we have done in the postwar world was the Liberal Economic Order, except for the way we muscled smaller states. As Trump says we can do with anyone who has a trade imbalance of $100,000,000 a year--so "a trade war win is easy."
An Example and Conclusion
The Marshall Plan was not at first excluded from Soviet Participation; Stalin eventually refused because of the reporting requirements so our Secretary of State, Jimmy Byrnes, was relieved. At the conference where these matters were discussed the representative from Czechoslovakia criticized the plan as a tool of western imperialism. According to his memoirs, Byrnes asked an aid, "didn't we give them $50 million last year?" After subsequent discussions with their delegation, Byrnes reports, "they were quiet." This has been going on for a long time. We shall see how antagonizing our allies with considerably larger economies respond. Maybe that explains why so many of our diplomats are resigning, including the most recent, our ambassador to Mexico.
