Frihandel i media vecka 36

2019-09-05

Andrew van Dam i Washington Post analyserar i en lång artikel anledningarna till att USA:s ekonomi mattas av och industriproduktionen faller. Handelskriget är en av anledningarna: 

“New tariffs are being announced all the time. It will be years before we can measure their full effects, but we’re starting to get data on one of the first. When Trump imposed tariffs on steel and aluminum in spring 2018, it boosted the fortunes of companies such as U.S. Steel as prices rose. But the honeymoon didn’t last. The nation’s second-largest producer has since idled two blast furnaces. It recently announced that it would lay off “less than 200” employees in Michigan. Its customers are squeezed by a global slowdown linked, in part, to the president’s trade wars.

The president has repeatedly professed his love for John Deere, and he recently blamed the Federal Reserve for making it difficult for the Illinois equipment manufacturer to compete. But on an August earnings call, Luke Chandler, the company’s chief economist, listed “uncertainties caused by trade disputes” alongside weather and disease as drags on the agriculture sector. He did not mention interest rates. The company, meanwhile, has lowered expectations and vowed to cut costs.

This summer, a Houston-based pipeline firm announced that it would charge users an additional fee to cover a tariff-related rise in steel costs, as originally reported by Collin Eaton at Reuters.

In the September beige book, a regular report on local economic activity from regional Federal Reserve officials, businesses remained optimistic, but tariffs and trade were cause for concern almost everywhere.

In the Boston region, officials reported that an electrical equipment business “said that the tariffs had led them to invest more in automating factories in the U.S.” In the New York region, a major retailer said sales had slowed in early August, in part because it had to raise prices because of tariffs. In the Kansas City region, trade uncertainty weighed on incomes in an already weak agriculture sector. And everyone from manufacturers in the Cleveland region to service-industry firms in the Richmond area said they had delayed investments because of trade tensions.

It’s difficult to discern where the fallout from the trade war ends and where the global slowdown begins. Especially because one helped beget the other.

According to Hicks, the true price of Trump-related trade disruptions will be seen in the reordering of the global supply chain. “That process of moving commerce around to avoid tariffs becomes very costly, it delays production,” he said. “That sort of disruption is enough to significantly slow growth,” he added later.

Hicks noted that recreational-vehicle manufacturers’ sales have begun to fall. RV sales have tended to drop in advance of the coming recession — they’re the sort of middle-class luxury that gets cut first when budgets tighten, as recently reported by the Wall Street Journal’s Shayndi Raice. One Texas manufacturer said steel prices have risen 22 percent since the tariffs bit, Raice reported.

Fitzgerald said the uncertainty driving the economic slowdown can’t all be blamed on the president’s trade war with China. There’s chaos in Venezuela, escalating disputes with Iran, Brexit and even an upcoming election in Canada. According to one widely watched index, global policy uncertainty is hovering near its highest levels on record.

“There are a lot of people who want to hang all of that on trade,” Fitzgerald said. “Trade’s part of it, but it’s not all of it. There are a lot of other things going on.”

Traditionally, Hicks said, when the U.S. economy tips into recession, manufacturing is hit first and hardest. Right now, it’s showing signs of weakness, but it’s still unclear how far a downturn might go.

Manufacturing employment growth is slowing, production is down and factory owners are cutting hours. In July, the most recent month for which the Labor Department has data, overall hours worked by nonmanagerial factory employees declined at the fastest rate since early 2010. Similarly, the average factory worker is getting less overtime than at any point since 2011.

Trump has promised that a range of elusive trade deals, particularly with China, will revive U.S. manufacturing. But there is no sign of a breakthrough. And in the interim, many U.S. companies are waiting to see what happens.”

 

2019-09-03

Tidskriften The Week skriver att ju mer Donald Trump handelskrigar, desto mer stöder amerikanerna frihandel:

“President Donald Trump’s new round of tariffs on Chinese goods is going into effect even as we speak. But the more Trump escalates his trade war, the more unpopular protectionism gets with American voters, especially Democratic ones. So all the Democratic presidential candidates are sprinting to put distance between their trade policies and Trump’s America Firstism, right? Wrong!

Indeed, the leading presidential contenders, Sens. Bernie Sanders (Vt.) and Elizabeth Warren (Mass.), who are setting the tone for the rest of the pack, are functionally identical if not worse than Trump on this issue. And the reason is that they don’t think that average Democratic voters care enough about trade to punish them for their protectionism.

It seems like Trump’s trade bashing has done more to bring people around to the cause of free trade in two years than English political economist Adam Smith’s canonical defense in The Wealth of Nations did in nearly 250. Indeed, literally every time the “chosen one” saber-rattles against China, Americans become more positively disposed toward trade. The Chicago Council Survey found last year that support for trade among Americans had touched an all-time high with 82 percent of respondents saying it was good for the economy, 85 percent saying it was good for consumers like them, and 67 percent saying it was good for America. These findings were pretty much confirmed by a Pew Research poll last month that found that compared to two years ago when only 50 percent Americans overall believed that free trade was good for the country, now 65 percent think so.

(—)

Given all this, Democrats should be mounting a vigorous case against Trump’s trade policies, pointing out that beggaring-your-partner trade wars aren’t “easy to win,” they are self-injurious.

But that is not what they are doing. They are harrumphing against Trump’s Twitter diplomacy and his hyper-belligerent style. But they are otherwise unwilling to stick up for trade or even defend the era of trade liberalization that President Bill Clinton ushered in with NAFTA and the normalization of trade ties with China.

Indeed, among the top 10 Democrats who will be on the debate stage next week, with the exception of former Texas Rep. Beto O’ Rourke who represents the NAFTA-dependent border town of El Paso and is polling at 2 percent, not a single one of them is willing to defend the treaty. Former President Joe Biden, who voted for NAFTA when he was a senator, has gone mum. He slams Trump’s “irresponsible tariff war” but then undercuts his own criticism by declaring “we do need to get tough with China.” Sen. Kamala Harris (Calif.) tosses off-hand comments about Trump’s tariffs being a “trade tax” but then quickly abandons the subject. South Bend, Indiana, Mayor Pete Buttigieg has lambasted Trump’s yammering about America’s export imbalance with China as a red herring but otherwise is totally opaque about his plans.

But there is no ambiguity with Sanders and Warren. Sanders has always been an unrepentant protectionist. If he could have his druthers, he would ban trade with any country poorer than America on the Marxist theory that competition with lower-wage workers leads to the immiseration of the American working class.

Warren is even more ideologically ambitious. Like Trump, she couches her plans under the rubric of fair trade. But for Trump, at least in theory if not practice, that means forcing other countries to slash their trade barriers and moving toward a no tariff world where no one has an artificial advantage over America. Warren, however, wants to use America’s economic might to forcibly enlist countries in a leftist crusade. As The Nation’s Todd Tucker, approvingly notes, “Warren’s trade plan is as much a theory of power as it is a set of ideas.”

She has drawn up a tall list of preconditions that countries must meet to qualify to trade with America. These cover almost everything on the leftist wishlist including: protecting religious freedom and human rights, signing the Paris Accords, fighting public corruption, combating sex trafficking, stopping tax evasion, and enforcing labor rights. She’d renegotiate every existing trade deal in accordance with her perfection criteria. But given that no country on the planet, not even America, currently lives up to her lofty standards, basically global trade would come to a grinding halt under her.

This is totally cuckoo and makes Trump look like a veritable trade dove. Even a liberal professor like Daniel Drezner, a columnist for The Washington Post, admits: “Elizabeth Warren’s trade policy is even more protectionist and unilateralist than Donald Trump’s.” Yet, he says, if she’s the Democratic nominee, he’d “hold his nose” and vote for her.”

 

 


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