Biden would consult “allies” on trade policy

October 30, 2020

https://www.reuters.com/article/us-usa-election-biden-china-exclusive/exclusive-biden-if-elected-would-consult-allies-on-future-of-u-s-tariffs-on-china-advisers-idUSKBN27E07R

As reported in the above-linked article, Biden would consult with “allies” to use “collective leverage” to “strengthen his hand” in conducting trade policy with China. It seems that Biden has no clear ideas of his own on the matter. And Biden fails to understand that we have no allies when it comes to trade policy. The rest of the world, especially those so badly overpopulated that they’re heavily dependent on exporting to the U.S. to sustain their bloated labor forces, are allies not to the U.S. but to the concept of “free trade” which, thanks to the relationship between population density and per capita consumption, virtually guarantees that they’ll enjoy a surplus of trade with the U.S. It is they, including China, who are exercising “collective leverage” against the U.S.

What does Biden expect that these “allies” will tell him? Does he think that they’ll support the U.S. in its use of tariffs to restore a balance of trade with China? Of course not. They don’t want the U.S. to realize that tariffs are an effective tool for correcting lopsided trade imbalances because they know that they’ll be next. Our “allies” will quickly lecture Biden about the evils of “protectionism” and the benefits of “free trade.” They care nothing about the damage done to the American economy because it works to their benefit.

It would be like a mangy, flea-bitten dog asking for the fleas’ help in dealing with one particularly nasty flea that’s been biting the hell out of him. The fleas will first look at each other in disbelief and then, with a wink, advise the dog that they actually do him a service, protecting him from some other imaginary malady. The big flea high-fives the other laughing fleas. The dog eventually succumbs and dies.

Perhaps he’s not interested in trade at all. Maybe he just likes the optics of appearing to be a “statesman.”

America needs a leader with a clear-eyed vision of how to restore a balance of trade and stop America’s economy from hemorrhaging a trillion dollars a year. Judging by this report, it doesn’t appear that Biden is that guy.


A Perfect Example of Why Token Tariffs Aren’t Enough

October 11, 2020

https://www.fidelity.com/news/article/top-news/202010090706RTRSNEWSCOMBINED_KBN26U161-OUSBS_1

Never mind the fact that Reuters, a champion of globalism, is eager to post negative stories about the use of tariffs by the U.S., especially when they relate to a battleground state like Michigan, and ignoring the distortion of the statistics due to the pandemic, the above-linked article makes a valid point.

The effects of Trump’s tariffs on steel offers a perfect example of why token tariffs, applied to one industry, can have the opposite effect of what was intended. Here’s the situation in a nutshell. The tariffs helped the steel industry at first. Steelmakers were able to thrive while getting higher prices for their steel. Before long, however, the increased costs for steel customers – most notably the auto industry – hurt their competitiveness with foreign auto makers. Sales slumped, reducing demand for domestic steel, which ultimately led to steel mill closures.

This is why you can’t take a piecemeal approach to trade policy. If tariffs are necessary to restore a balance of trade – which they obviously are for the U.S. – then they have to be applied across-the-board to every single manufactured product from every country that’s over-populated to the point where they are dependent on exports. Anything less is guaranteed to produce a trade deficit and a loss of manufacturing jobs.

Although I used a whole book, Five Short Blasts, to explain the concept, it’s fairly simple, really. People living in crowded conditions have low per capita consumption of products. After all, there’s not enough space to use and store them. They don’t use much, so there’s not much for people to do. Unemployment is high.

People living in less crowded conditions, on the other hand, enjoy high per capita consumption, requiring “all hands on deck” to produce what’s needed. People in that society enjoy full employment.

If these two societies try to trade freely with each other, a host-parasite relationship is established. The high population density / high unemployment state begins to feed on the market of the other, sapping it of its manufacturing jobs. It’s inescapable. The only thing the latter society can do is to halt the free-trade relationship.

As the Reuters article points out, the tariffs on steel helped the steel industry. Then why in the world wouldn’t you apply tariffs to all other industries?


August Trade Results: Another Record Trade Deficit, Another Month of China Thumbing Its Nose at “Phase 1” Trade Deal

October 7, 2020

The trade results for August are in and they couldn’t be any worse, though given the current trajectory, they may very well be worse in September.

The overall deficit soared to $67.1 billion, beating the record set only one month earlier by $3.7 billion. More importantly, the deficit in manufactured products continues to explode, jumping $2.9 billion from the previous month’s record to $83.2 billion – an annualized rate of almost exactly one trillion dollars. Here’s a chart of the deficit in manufactured goods: Monthly trade deficit in manufactured goods.

China didn’t help a bit. If they lived up to the agreement they made in the “Phase 1” trade deal, the deficit in manufactured goods would have been lower by $4.5 billion. They didn’t. Not even close. Not only did they not meet the goal in any category of goods, they even fell behind the 2017 baseline by a half billion dollars. In two of the four categories – energy and agriculture – they did import more than the 2017 baseline, but barely. They’ve made no progress at all toward meeting the goals set for 2020 in the deal. Here’s the chart: Monthly “Phase 1” trade deal results.

The deficit with China did drop slightly, falling to $29.8 billion from $31.6 billion in July. But it was of no benefit to America. The big winners from the success that Trump has had in reducing the deficit with China – thanks to the tariffs enacted before the “Phase 1” deal – have been Mexico and Vietnam. The monthly trade deficit with Mexico has quadrupled since Trump took office, soaring to a new record of $12.8 billion in August (beating the previous month’s record by a whopping $2.1 billion), compared to $3.8 billion when Trump took office in January of 2017. The deficit with Vietnam also blew past the previous month’s record, rising $0.8 billion to $7.6 billion, more than double when Trump took office.

To be fair, the trade deficit in manufactured goods was dropping nicely until the pandemic hit. It had fallen to $59.9 billion in February, but has risen dramatically since. Blame the pandemic. All of the money that Americans used to spend on dining out, travel, gym memberships and entertainment is now being spent on goods. Much of the stimulus money meant to help Americans is now in the hands of foreign manufacturers.

Though Trump has done far more than any president in decades to address the trade deficit and to bring manufacturing jobs back to America, he still needs to be much more aggressive with imposing tariffs on a wide range of countries who feed off of the American market to sustain their bloated labor forces. If he had, he’d be a shoo-in to win the election instead of finding himself the underdog. America will never be “great again” until store shelves are stocked with products “Made in the USA.”


Time to Leave the World Trade Organization

September 16, 2020

https://www.reuters.com/article/us-usa-trade-china-wto/wto-finds-washington-broke-trade-rules-by-putting-tariffs-on-china-ruling-angers-u-s-idUSKBN2662FG

As reported in the above-linked article, the World Trade Organization has announced its finding that the U.S. broke its rules when it imposed tariffs on Chinese imports two years ago.

The timing of this announcement is curious.  Of course the U.S. broke the rules.  Everyone knew it at the time.  Trump didn’t care.  It was the only way to make any progress on halting the explosion in the trade deficit with China.  So why wait until now?  Is it because Trump faces re-election in less than two months, running against a candidate who played a big role in the advancement of the globalism that the WTO enforces?

The WTO is the enforcer of the ill-conceived trade scheme hatched in the wake of World War II to bring the world together by employing the unproven concept of “free” trade.  Decades later, the results are in and “free” trade is now a proven failure.  Instead of lifting all economies of the world and bringing the world together through an inter-dependency, the WTO has destabilized the world by establishing a host-parasite relationship between reasonably-populated nations, like the U.S., and the others – like China, so badly overpopulated that they are totally dependent on manufacturing for export and feeding off of America’s market.  The WTO is directly responsible for building up a totalitarian communist regime bent on dominating the rest of the world.

It’s time to put an end to this.  Trump can do it by simply withdrawing from the WTO, a move that would quickly lead to its collapse.  Let’s return to truly free trade, where every nation is free to set its own rules in its own best self-interest.


Trump’s Efforts on Trade a Spectacular Failure

September 9, 2020

I can’t tell you how disheartening it was to sift through the latest trade data, for the month of July, released by the Commerce Department late last week.  There’s just no getting around the fact that the administration’s efforts to cut the trade deficit and bring manufacturing back to the U.S. have failed.  “Failure” would be the word to describe results that haven’t shown any improvement.  But America’s trade picture has deteriorated so badly that the scope of the failure can only be described as “spectacular.”

In his inauguration address, Trump observed:

…  rusted-out factories scattered like tombstones across the landscape of our nation …

Earlier in the address, regarding situations like that noted above, he proclaimed:

… That all changes – starting right here, and right now …

The July trade data comes 3-1/2 years into his administration – plenty of time to implement changes and to see the effects.  It’s hard to find any silver lining.  Consider:

  1. The trade deficit in manufactured goods in July soared to $80.4 billion, a new record that completely blows away the record set under the Obama administration ($63.3 billion in March, 2015).  Check out this chart:  Manf’d Goods Balance of Trade.
  2. During the 2016 campaign, Trump vowed to quickly tear up the NAFTA deal and replace it with a much better deal.  Most of his term has been wasted negotiating the new “USMCA” trade deal that replaces it.  It finally went into effect on July 1st of this year, but the terms have been known for a long time, so you’d expect that manufacturers would have been busy implementing plans to get in compliance.  The results?  In July, the trade deficit with Mexico soared to $10. 6 billion.  When Trump took office in January, 2017 it was $3.8 billion.  Since then it has nearly tripled.
  3. When Trump took office, the deficit with China was $31.4 billion.  In July of this year it was $31.6 billion.  After Trump took office, the deficit with China continued to grow until, finally fed up with China’s promises to buy more American products, Trump imposed 25% tariffs on half of all Chinese products.  Almost immediately, the deficit with China began to shrink dramatically.  However, all momentum was lost with the signing of the “Phase 1” deal with China, when the U.S. agreed to halt plans to impose tariffs on the remainder of China’s products in exchange for Chinese promises to dramatically increase their purchases of American goods.  The results were predictable; China reneged on the deal.  They haven’t even measured up to the 2017 baseline that was used as a starting point.  Here’s the data, updated through July:  Phase 1 China Trade Deal 2020 YTD.  What has Trump done in response?  Nothing.  He continues to insist it’s a good deal, in much the same way that Obama stuck by his trade deal with South Korea while our deficit with them exploded.
  4. What progress was made in at least stagnating the deficit with China didn’t translate into any benefit to American workers.  Instead, it contributed to the tripling of the debt with Mexico and also ballooned the debt with Vietnam.  When Trump took office, the trade deficit with Vietnam, an economic back-water, was $3.3 billion per month.  In July of this year it was more than doubled to $6.8 billion per month.  Why?  Because no tariffs were applied to anyone other than China.  The tariffs motivated manufacturers to begin moving out of China, but there was no disincentive to simply move to secondary suppliers in Mexico, Vietnam and other places.

Some might say that such conclusions are unfair in the midst of the pandemic.  Not so.  The effect of the pandemic has been to cut economic activity to a depression-like level, and the effect of an economic slow-down has always been to shrink the trade deficit, not grow it.  That makes the enormous deficit in manufactured goods in July even more troubling.

Speaking of the pandemic, at least people are beginning to realize that being dependent on foreign suppliers for critical goods like ventilators and face masks is a threat to national security.  It’d be nice if that realization extended to other products that would just as easily be cut off during war time.  Better yet, wouldn’t it be nice if people realized that an economy that needs to stand on agriculture, construction, manufacturing and services is hollowed out and unstable if one of those legs is gone?

I don’t doubt Trump’s desire to truly “make America great again” by bringing back our manufacturing sector.  But he sees himself as a “deal-maker” and believes he can deal his way out of the trade deficit.  That’s where the problem lies.  For America, at least, there’s no such thing as a good trade deal.  I defy anyone to identify a single trade deal that has ever left America with anything but a growing trade deficit.

And forget about “free trade.”  That centuries-old concept is about as relevant to today’s trade environment as theories about a flat earth and how the sun rotates around it.  Today, trade is war – a war for increasingly scarce jobs in an ever more over-populated world.  Unlike America, the rest of the world understand this.  They know that what they really need is access to America’s market so that they can keep their bloated populations employed manufacturing goods for export.  Americans don’t have a clue.  They think it’s about lower price and more choice.

Had Trump simply applied tariffs everywhere where America was suffering a big trade deficit in manufactured goods, manufacturers would have come running back like refugees fleeing a war.  Instead of improving incrementally, our economy would have exploded.  Manufacturers would have eagerly snapped up any workers who lost their jobs to closures of restaurants, bars, gyms, movie theaters, etc. during the pandemic.  Trump’s re-election would be a foregone conclusion.  Instead, he’s going to be lucky to win.  Forget about the pandemic.  It’s his failure to make progress on truly making America great again that has left him vulnerable.

Don’t interpret this post as an endorsement of Biden.  It’s reported in the news today that Trump has criticized Biden as a “globalist.”  He’s not wrong.  But it’s not just Biden.  Until Trump came along, every politician, Democrat and Republican alike, were and still are globalists.  I’d vote for Biden in a heartbeat if he vowed to use tariffs to restore a balance of trade, but he won’t.  Though the results under Trump have been disappointing, things could and would be much worse under virtually anyone else, at least until more American politicians are willing to engage in the trade war that they don’t even acknowledge today.

 

 

 

 


U.S. Fails to Enforce “Phase 1” China Trade Deal

August 27, 2020

https://www.fidelity.com/news/article/top-news/202008242045RTRSNEWSCOMBINED_KBN25L023-OUSBS_1

As reported in the above-linked article, with six months of results from the “Phase 1” trade deal with China now in, the U.S. has “rolled over” for China yet again, ignoring the Chinese snub of the deal.  The picture that accompanies the article, showing the flag of Red China flying above that of the U.S., is appropriate.  Red China dominates the U.S. in trade because it dominates the U.S. in terms of its willingness to stand up for itself.

In spite of the fact that China has not made one inch of progress toward meeting the goals of the deal – in fact, it’s not even measuring up to the 2017 baseline for purchasing American goods – the U.S. Trade Representative’s office had this to say following a phone discussion with Chinese trade leaders:

“Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,”

Red China has won again.  It’s tactic of making trade deals and then completely ignoring them, knowing that the U.S. never follows through on anything, has worked again, just as it has for decades.  The Chinese are once again rolling in the aisles with laughter.

Is Trump on board with this?  Is this a move calculated to avoid roiling the markets just ahead of the election?  Is he saving a tough response, like imposing the new tariffs that this deal delayed, until just ahead of the election, calculating that it will win him votes before anyone even takes notice of a market decline?

I don’t know, but I do know that the lack of progress in cutting the trade deficit and bringing back American manufacturing jobs is a major reason behind the decline in enthusiasm for his re-election.  Revitalizing the manufacturing sector of the economy is the key ingredient needed to “Make America Great Again” and it’s difficult to see any progress at all on that front.


Verdict is in: “Phase 1” Trade Deal with China is a total failure.

August 6, 2020

Trade data for the month of June was released by the Department of Commerce yesterday, so we now have a full six months of results of the “Phase 1” trade deal with China.  As I predicted when the deal was signed in January, the deal is a total failure.

You may have heard stories in the news, as I did, about how the Chinese were beginning to make progress on catching up to the goals established by this deal.  I had my doubts, so I was anxious to see the real data.  Here it is, year-to-date through June:  Phase 1 China Trade Deal 2020 YTD.

The deal established goals for the Chinese import of American goods in four categories, using 2017 trade results as a baseline:  manufactured goods, energy goods (like oil, gas, coal, etc.), agriculture goods, and total goods.  The goal was for them to increase their imports substantially in 2020, and then even more in 2021.  In the spreadsheet, I broke down those goals into monthly goals, ramping them up at a rate that would meet those goals by the end of the year.

Through May, the results were abysmal.  They failed to meet the goal in any category of product.  In fact, only their import of energy products even exceeded the 2017 baseline.  You’d think that if China were anxious to meet the goals in order to avoid further threatened tariffs, they’d at least make some good faith effort that they could point to as progress.  So what happened in June?  Their imports actually declined in every category.  They didn’t even meet the 2017 baseline in a single category.

A good faith effort to show progress?  The June results are exactly the opposite.  They are a slap in the face.  The Chinese are taunting the Trump administration – betting that they’ll be too distracted with other events to take action.

It’s time to put an end to this stupid trade deal and follow through with the threatened 25% across-the-board tariffs on all Chinese exports to the U.S.  Trump was elected, in large part, to make real progress in cutting America’s trade deficit and bringing manufacturing back to the U.S.  Aside from tariffs on half of Chinese exports and a new trade deal to replace NAFTA, little has been accomplished.  All momentum on the trade front was killed when Trump signed the “Phase 1” deal with China.  Three-and-a-half years have been frittered away.  His supporters are getting disillusioned by the lack of progress.  If Trump loses the election, it will be due in large part to his failure to fix our trade mess.

There’s no more time to waste.  It’s time to declare this deal a failure and impose the tariffs that were put on hold.  In addition, it’s time for Trump to get serious with other Asian nations and the European Union as well.  Slap all of them with tariffs and start making real progress in bringing our manufacturing jobs back.


Protests against “systemic racism” are off the mark.

August 3, 2020

For a web site dedicated to raising awareness of the economic consequences of population growth, this topic may seem “off the mark.”  But bear with me.

The “Black Lives Matter” movement has evolved beyond protesting the brutal tactics used by some police when dealing with the black community to include “systemic racism” in broad terms.  Exactly what “systemic racism” is can be difficult to pin down and varies depending on who you ask.  There was a time when racism was codified and blatant.  Blacks were barred from voting in many places prior to the Voting Rights Act of 1965.  Segregation was practiced openly throughout society, limiting black access to virtually everything.

But all of that has changed.  The right to vote is secured.  Discrimination is now illegal everywhere, but I won’t deny that it still exists.  There are still subtle ways in which anti-discrimination laws are skirted, and this is the “systemic racism” that is the target of protesters.  I recently heard a protestor say (or perhaps I read it on a sign at a protest – I can’t remember exactly) that “we’re not just here to change laws, but to change attitudes and eliminate all sytemic racism,” or words to that effect.

Good luck with that.  Whatever “systemic racism” still exists is because people are prejudiced, and admonishing people for it won’t change them.  It’s likely to have the opposite effect.  People only change their prejudices out of necessity.

Take World War II for example.  Perhaps nothing, at least up to that point, did more to begin the process of changing minds and integrating blacks into society than the war.  It was an “all hands on deck” event.  Every last male of fighting age was needed in the service.  Every woman was needed to man the factories.  Even school-age kids were needed to collect scrap metal, rubber and even to glean the fields for milkweed to stuff life jackets for sailors.  Winning the war was far more important than silly prejudices.  Sure, there were still some segregated units like the Tuskegee airmen, but blacks could fight as well as whites and they all bled the same color.  A lot of attitudes began to change.

In 1970, in spite of the Civil Rights Act and the Voting Rights Act, the state of Alabama was still highly segregated and the University of Alabama football team was no different.  Bear Bryant had been head coach there since 1958 and steadfastly refused to recruit black players.  Every player on the Alabama team was white.  That year, Alabama took on the University of Southern California, a team that was fully integrated with many black players, led by Sam “Bam” Cunningham, a bruising fullback who led USC to a humiliating 42-21 lopsided win over Bryant’s team.  Like any good coach, Bryant hated losing and he could see the handwriting on the wall.  Afterwards, Bryant was overheard to say, “I want some players like those.”  He could see the folly of not recruiting the best players regardless of whether they were white or black.  The following year, Alabama fielded its first black player.  By 1973, one third of the team’s roster was black.  Bryant had changed out of necessity.  He wanted to win.

The “systemic racism” that persists today and all of its effects – chronic poverty, low wages, lousy schools, drugs, gangs, high rates of incarceration and hopelessness – won’t change because of protests against it.  It will only change out of necessity.  It will only change when every single person who wants to work is needed to make the economy function.  Instead, today, what the Federal Reserve defines as “full employment” – typically somewhere in the range of 4-5 percent – still leaves millions of Americans out of work, and those unemployed are disproportionately black.  Of those who are employed, few have any upward mobility – held back by a substandard education.

There is absolutely nothing that has hit the black community harder than America’s trade policy.  I don’t believe it was intended to be racist, but the results speak otherwise.  Aside from the vestiges of the automobile industry, American manufacturing has been totally decimated, shipping millions of high-paying manufacturing jobs overseas and putting millions of people – disproportionately blacks – out of work.  (It’s worth noting that virtually all of those jobs have landed in Asia and Europe.  Africa has been left completely out of the picture.)  Imagine if that were reversed.  Imagine if manufacturers had to scour the country to find workers to staff their production lines.  It’d take every last worker left in America to satisfy the demand.  Companies wouldn’t give a damn if those workers were black or white or purple, or if they came from Mars.  All they care about is making money.  Petty prejudices would quickly fall by the wayside, just like they did in World War II and like they did at the University of Alabama.  Every black person – hell, every person, regardless of race – could find a job making good money and good benefits.  It’d quickly break the back of the cycle that has kept blacks trapped in poverty.

America’s trade policy is racist.  Protesting loosely-defined notions of “systemic racism” is off the mark.  If protesters want to make real headway in putting an end to “systemic racism,” they need to begin taking on America’s trade policy and the politicians who do the bidding of their corporate benefactors by sustaining this totally unfair system.  It doesn’t matter if those politicians are Democrats or Republicans because both parties have been complicit.  Only when a balance of trade is restored and our manufacturing jobs are brought back home will they see any meaningful improvement.

 

 


Trump vs. Biden on Immigration

July 22, 2020

https://www.reuters.com/article/us-usa-election-immigration-factbox/factbox-trump-and-biden-take-sharply-different-paths-on-immigration-idUSKCN24L122

The above-linked article is a comparison of Biden’s positions on immigration and Trump’s position and record on the same issue.  The article has a pro-Biden bias, casting his positions as having compassion for immigrants, while casting Trump’s positions as being more heartless and cruel.  Putting aside that bias, however, the comparison is relatively accurate.

Before going further, for the benefit of those new to this web site, my purpose is to bring attention to an economic consequence of population growth that has escaped economists because of their refusal to even consider the subject.  Simply put, beyond some optimum population density, further population growth begins to erode per capita consumption and, with it, employment.  While the macro economy continues to grow, it doesn’t grow at the same pace as the population.  The result is a bigger pie, but smaller slices for everyone.  Incrementally worsening poverty is the inescapable result.

With that said, let’s now talk about immigration.  Many claims are made about the supposed benefits of immigration and why it should continue.  It’s often said that immigrants are the engine of our economy, that they account for 25% of all new business start-ups, for example.  Just in the last few days, I heard it said that 19% of all long-haul truck drivers in America are immigrants.  Immigrants are doctors, engineers, scientists, professors, and so on.  At the other end of the scale, immigrants pick our crops, clean our hotel rooms, and do all of the other jobs that Americans seem loathe to do.

Regarding that last point, there’s some element of truth.  Few Americans work those jobs, but is it because they don’t like to work hard, or is it because the pay is too low?  I’d argue that many American workers would eagerly leave minimum wage jobs to do those other jobs if they paid more.  The wages are low because of the unlimited supply of immigrants who see those wages as a huge step up from what they can aspire to in their own countries.

As for those other workers – the entrepreneurs, the professional people, the long-haul truckers and skilled tradesmen, it’s true that a significant percentage are immigrants, but that’s only because a significant percentage of the population is immigrants.  They’re no more likely to fill those roles than native-born Americans.  Immigrants don’t possess any unique skills or powers to boost the economy.  They’re just people, and they want the same thing that all people want – to make a living and provide for their families.

Another claim often made is that America is enriched by the diversity that immigration provides.  Diversity, it is said, is a source of strength for our economy.  America is enriched by people with different backgrounds and different perspectives.

It can’t be argued that it isn’t interesting to learn about different cultures.  But the claim that diversity is a source of economic strength?  Baloney.  That’s a myth, invented and perpetuated by those who stand to benefit from never-ending population growth.  Who are they?  Corporations.  More people equate to more total sales and a bigger bottom line, while all of the negative consequences of population growth be damned.  Don’t believe me?  Go to the CIA World Fact Book web site and bring up a list of countries ranked by GDP per capita.  You’ll find the top of the list dominated by countries practically devoid of diversity.  Ranking high on the list is Ireland, a nation with virtually no diversity but, in terms of trade balance per capita, kicks America’s ass in trade far worse than any other country.  Diversity has nothing to do with economic prowess.

In the final analysis, the ONLY effect of immigration is to grow the population.  Growing the population makes sense only if you believe that we need more people – bigger and more crowded cities, more traffic, more demand on resources, more carbon emitters,  more trash in the landfills, and so on.  Worst of all, if you believe in the premise of this web site – that a growing population will doom the U.S. to worsening poverty by eroding per capita consumption – further population growth is tantamount to slow-motion economic suicide.

Joe Biden is an advocate for more immigration and, thus, more rapid population growth.  That position isn’t surprising and it’s not something unique to Democrats.  Virtually every Republican takes the same stance, though they tend to pay more lip service to opposing illegal immigration.  Both parties are in agreement on immigration.  Why?  Because that’s the stance that their corporate benefactors pay them to take.

Only very recently have some environmentalists begun to awaken to the fact that they’ve been hoodwinked by the faux-environmentalists who would have you believe that the planet can be saved from the vast array of negative consequences of worsening over-population through technological gimmicks like cutting carbon emissions, paving the way for more “sustainable development,” a corporate euphemism for more population growth.  In light of this awakening, policies that promote population growth may soon seem out-of-step with the reality of the challenges that confront this planet.

Trump is unique in being opposed to both legal and illegal immigration alike.  If we can believe him, his motivation is his belief that immigrants hold down wages and take jobs from American workers.  Is there an element of racism?  He denies it.

I wish Trump were a more likable person – more eloquent, more compassionate, less hot-tempered, a better role model.  Would I vote for Biden over Trump if Biden took a hard line on immigration like Trump?  You bet, especially if he also favored restoring a balance of trade through the use of tariffs, as Trump does.  If there were no differences in their positions on these two critical issues, I’d vote for Biden in a heartbeat.  But that’s not the case.

 

 


Token Bump in Exports to China in May Falls Far Short of “Phase 1 Trade Deal” Goals

July 4, 2020

Trade data released by the Commerce Department on Thursday for the month of May reveals that China bumped up its imports from the U.S. slightly, but still fell far short of the goals of the “Phase 1 Trade Deal” signed with the U.S. in January.  Here’s the data (source:  USA Trade Online):  Phase 1 China Trade Deal 2020 YTD.

This deal sets goals for Chinese imports of American goods for four different categories of products:  manufactured products, energy products, agriculture products, and total products, using 2017 Chinese imports of these products as the baseline for increases.  Through May, we’re now five months into this deal.  That’s 20 opportunities to meet the monthly goal for each category of product.  So far, China has not met one single goal.  In fact, in May, for the first time, China exceeded the 2017 baseline for one category of product.  They imported $1.249 billion in energy products vs. the 2017 baseline of $0.758 billion, but still fell short of the goal for May of $1.943 billion.

Year-to-date, China is behind its commitments by the following amounts:

  • manufactured products – 25.7% below goal
  • energy products – 69.6% below goal
  • agriculture products – 60.6% below goal
  • total goods – 35.9% below goal

This is pathetic.  At this point, one can only conclude that, rather than trying to live up to the deal and boost its purchases of American goods, China is actually making a concerted effort to reduce its purchases.

In October of 2018, the monthly trade deficit with China hit a record of $43 billion.  In May of this year, that deficit was down to $27 billion.  But the “Phase 1 Trade Deal” gets no credit for that decrease.  In December of 2019 – the last month before the deal was signed, the deficit with China was $24.8 billion.  All of the drop in the trade deficit with China is thanks to the 25% tariffs that are in effect for half of all Chinese imports.  The “Phase 1 Trade Deal” has had absolutely no impact on further reducing that deficit.

A huge part of the “Make America Great Again” promise was to reduce the trade deficit and bring manufacturing jobs back home.  There has been virtually no progress.  In May, the deficit in manufactured goods fell just $1 billion shy of the record deficit of $75.8 billion set in December, 2018.  Trump has squandered his term with making fruitless deals.  The deficit with Mexico is worse than ever, hitting a record in March.  The progress made in reducing the deficit with China (through the implementation of tariffs) was offset by increases in other countries, most notably Vietnam and Mexico, and that progress ground to a halt with the signing of the “Phase 1 Trade Deal.”  There’s been absolutely zero progress in reducing the deficit with the EU.  To date, there hasn’t even been an attempt.

Trump needs to kill the “Phase 1” deal now and extend the tariffs across the board to all Chinese products to demonstrate that he’s still committed to the “MAGA” promise if he’s to have any hope of being re-elected.  Far too much time has been wasted, but it’s not too late.