Biden “inherits” record trade deficit. Will he do anything about it?

February 8, 2021

The trade data released by the Commerce Department last week marked another sad milestone in America’s economic decline. The December balance of trade in manufactured goods set another new record -$87.3 billion – beating the previous record set only one month earlier. That’s an annualized deficit of $1.05 trillion and represents a loss of approximately fourteen million high-paying manufacturing jobs.

2020, the final year of Trump’s presidency, was by far the worst on record in terms of the trade deficit. In the title of this post, the word “inherits” is in quotation marks because while he now takes over that deficit from Trump, the truth is that Biden has played a key role in creating and exacerbating the deficit his entire adult life as a champion of globalist policies. He joined the U.S. senate in 1973. In 1975, America sadly experienced its final trade surplus, and has run an ever-growing deficit for the past forty-four years. He didn’t just “inherit” this problem. He played a key role in creating it, and it’s impossible to over-estimate the devastation done to our economy and to working Americans.

What will he do about it? Not a damn thing. His corporate benefactors, seeing more potential for profit growth in overseas markets than in the mature U.S. economy, have been paying him for decades to facilitate the transfer of America’s wealth and the export of American manufacturing jobs. He pays lip service to revitalizing American manufacturing, but that’s all it is.

Impeach Trump for inciting the Capitol building riot? Perhaps Biden should be impeached for his lifetime of work fomenting the unrest in this country that created the fertile ground for Trump’s rhetoric to take root.

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Biden vows to continue Trump’s tough stance on China. Here’s his chance to prove it.

February 7, 2021

During the course of Trump’s administration, there was a massive shift in America’s, and indeed the entire world’s perception of China. In 2016, China was admired for its embrace of capitalism and its rapid pace of economic development. Chairman Xi Jinping was admired for slowly and in subtle ways guiding his country away from communism and, so the world hoped, shifting gradually toward democracy. Even Trump was charmed by his cow-eyed, benevolent smile and was taken in by his promise to be America’s economic partner.

Soon, however, all that began to change. China engaged in a massive military buildup, laid claim to a vast swathe of the South China Sea, bullied its neighbors there, engaged in ethnic cleansing of its Uighur muslim population and unleashed a horrible pandemic on the world’s population while covering up its role. Chairman Xi was named chairman of China for life. He quickly reneged on every promise he made on trade.

By his third year in office, Trump could see the truth – that Xi was a dictator bent on subjugating the U.S. and on world domination. They couldn’t be trusted. He imposed 25% tariffs on half of all their exports. With Trump on the verge of extending those tariffs across the board, China agreed to a deal – the “Phase 1” deal it signed in January of last year. In exchange for holding off on the additional tariffs (and likely counting on America’s traditional lack of enforcement of trade deals), China agreed to specific benchmarks for dramatically increasing its imports of American goods in 2020 and 2021.

By the end of Trump’s administration, the whole western world agreed with its assessment of China – that it represents an existential threat that must be confronted. Upon winning the election, and eager to demonstrate that he would not be the kind of weak leader that many feared, Biden vowed to continue the tough stance on China.

Now, with the Commerce Department’s release of the final trade data for 2020 last week, comes Biden’s first and biggest chance to prove what he meant. True to form, China completely ignored the requirements of the Phase 1 trade deal. Not only did it not meet the 2020 goal, it barely exceeded the 2017 baseline that was the basis for those goals. Here’s the Phase 1 trade deal data.

China missed its goal for total goods imports by $62 billion. In fact, it barely beat the 2017 baseline, rising by only $1.9 billion from 2017. In the all-important category of manufactured goods where the most jobs are created, China not ony fell short of the goal for 2020 by $37.5 billion, it actually fell short of the 2017 baseline by $4.7 billion. In terms of energy products, it barely beat the 2017 baseline while falling short of the 2020 goal by $17.7 billion. It also fell short of the goal for agricultural imports, the category key to support by America’s farmers, by $9.9 billion. This failure cost Trump critical support in the heartland and his failure to enforce this deal cost him support all across the country.

The results are in and they’re horrible. Predictably, China has once again reneged on this critical trade benchmark. So what’ll it be, president Biden? This is your big chance to prove that you meant what you said about being tough with China. Declare China in breach of the deal and extend the tariffs across the board on all Chinese imports. Failure to act – and giving China yet another chance would constitute such a failure – will prove that your rhetoric was just bluster and that you are the kind of weak leader that many feared.