By on June 5, 2018

nafta-secretariat

Governance is one hell of a slippery fish. While you want your elected officials to assist in helping the nation evolve with an ever-changing society, you don’t want a deluge of contradictory and ill-planned laws mucking things up. That’s why the best progress is carefully measured and negotiated. But something has to happen eventually or you begin wondering what we (and the various lobbies) are paying these dingbats the big bucks for.

For example, the North American Free Trade Agreement looks like it’s about to be abandoned until sometime after 2019. After negotiations missed numerous self-imposed deadlines, U.S. House Speaker Paul Ryan said Congress needed a notice of intent to sign by roughly May 17th if anything was to be finalized for 2018. That date came and went. Now, everyone appears to have thrown their hands up, with practically every country on the planet currently considering retaliatory tariffs against the United States. 

U.S. President Donald Trump’s new import fees on steel and aluminum haven’t gone over particularly well. Automakers are considering making changes to cope, as well as preparing themselves for the possibility of new automotive tariffs — which are also threatened. The president’s trade decisions appear to have slammed the door squarely on the head of nations hoping to renegotiate NAFTA before the sun burns out.

Last week, Canadian Prime Minister Justin Trudeau began expressing frustrations with the U.S. “Let me be clear: These tariffs are totally unacceptable,” Trudeau said at a press conference on Thursday.

Trudeau followed up a few days later by suggesting Trump’s claim that the United States’ new tariffs are being considered because of national security concerns was an affront to the two countries’ longstanding relationship. “The idea that, you know, our soldiers who had fought and died together on the beaches of World War II and the mountains of Afghanistan, and have stood shoulder to shoulder in some of the most difficult places in the world, that are always there for each other, somehow — this is insulting to that,” he explained to NBC.

Canada, which is the largest exporter of steel to the U.S., has already announced retaliatory tariffs. Officials are practically begging for revenge at this point, which is a common theme in Europe, too. Trudeau, however, was careful to mention he was upset with the U.S. leadership and not its citizenry.

Meanwhile, Mexico is gearing up for next month’s presidential election — which could bring big changes. As Enrique Pena Nieto is not eligible for reelection, there will be someone new at the helm when NAFTA negotiations resume in earnest. Leftist politician Andres Manuel Lopez Obrador is the current frontrunner and his placement, as well as the probable shakeup in the Mexican Senate, could severely alter the tone of future trade talks.

Of course, the United States is having its own elections this November — and that’s the main reason the country has essentially given up taking NAFTA seriously until 2019. It’s campaigning season. However, even if none of the above issues were present, there is no guarantee that trade negotiations would have enjoyed smoother sailing.

Numerous proposals from the United States have proven a non-starter with Mexico and Canada. Automotive content requirement rules, now scaled back to appease partner countries, have been a constant sore spot and Mexico refuses to entertain some of the more ambitious employment regulations suggested by the North. Trade talks were never progressing in a way anyone would describe as favorably.

As if that wasn’t bad enough, Trump recently mentioned it might be better to simply end three-way talks on NAFTA and deal with Canada and Mexico individually. “He is very seriously contemplating kind of a shift in the NAFTA negotiations. His preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately,” Larry Kudlow, the White House’s chief economic adviser, said on Fox News Tuesday morning. “He prefers bilateral negotiations and he’s looking at two, much different countries.”

According to The New York Times, numerous senators have come out to urge the president to stay the course with NAFTA and find one universal agreement all countries can live with. It also referenced survey of chief executive officers, released Tuesday morning by Business Roundtable, that showed the majority are fearful of administration’s current trade policy. The very real prospect of economic revenge from other countries as trade tensions escalate pose a substantial risk to their businesses — and among those with the most to lose is the automotive industry.

[Image: NAFTA Secretariat]

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65 Comments on “Looks Like NAFTA Renegotiations Aren’t Happening This Year...”


  • avatar
    Sub-600

    “…before the sun burns out.” HAHAHA! That’s a very funny expression. I’ll be stealing that frequently.

  • avatar
    33873

    These agreements don’t have to exist for things to work out, stop having a hissy fit

  • avatar
    npaladin2000

    Could someone remind me of how high Chinese tarriffs are on cars built in the US? Because tarriffs on American goods always seem to be OK, it’s just that when we want to implement protective tarriffs that the world shits a brick.

  • avatar
    conundrum

    “Numerous proposals from the United States have proven a non-starter with Mexico and Canada.”

    Numerous non-negotiable demands, not “proposals”, is more like it.

  • avatar
    Charliej

    It is just Trump acting the moron again. He is making the US a pariah to the rest of the world. I feel for the people of the US but they got themselves into this mess. Now they have to get themselves out of it.

    • 0 avatar
      "scarey"

      Our President has many things on his plate. Like rooting out the TOTAL corruption in the DOJ and FBI. And trying to get a summit to end the 68 year-old Korean War. Not to mention trying to play defense against a phony-boloney, plastic-banana “investigation” of nonexistent collusion with the Russians, when the only REAL collusion was Hillary Clinton’s pay-for-play State Department laundering Russian money for selling Uranium One. Trump will get everything done that he promised, one way or another. Congress won’t let him build a Wall ? He sends the National Guard. Cutting regulations ? Check. Rebuilding the military ? Check. Forcing sanctions on sanctuary cities ? Check. Big Tax cut ? Check. Economy improving ? Check. Toying with the Fake News purveyors and Never-Trumpers ? Check. Making America Great Again ? Check. NAFTA redo ? Later. It’s all good

      • 0 avatar
        Charliej

        America was great before Trump took office. America will be great when Trump is deposed. Trump supporters are so stupid I often wonder how they eat dinner without poking their eye out with a fork. Trump tells us that Canada is a threat to our national security. Canadian troops are fighting alongside our troops in Afghanistan. But Trump would not know anything about that. when it comes to fighting Trump is a coward. Ignorant Trump supporters actually believe that the FBI is corrupt because they are investigating a corrupt president. If there were true justice in America Trump would have been hanged long ago for treason.

        • 0 avatar
          28-Cars-Later

          Seriously check your meds.

          Things have been downhill since Kennedy, accelerated in the Nixon and Bush I periods, and went into hyper drive during the reign of Emperor Soetoro. Forget the men at the helm, look at those around them and the results. MAGA is such a ridiculous concept because it is not possible at this point, but your idea it has been great at any point since 2001 is truly disconcerting. Yeah sure an oppressive pyramid society is simply grand.

          • 0 avatar
            Daniel J

            28-Cars-Later – Hope and Change along with Yes We Can were just as bad too. Sometimes I hate being a libertarian.

          • 0 avatar
            28-Cars-Later

            @Daniel J

            I agree, its all been B.S. for decades.

          • 0 avatar
            Lou_BC

            @28-Cars-Later – I do agree “its all been B.S. for decades”.
            Changing presidents amounts to changing shirts of the front man for the “cover band”. The wealthy elites have been calling the shots for decades. People have started to wake up but the current president has taken the “dog and pony” show to new levels of distraction. The ‘greatest hits” album from the current White House is to blame foreigners, immigrants,deep state, media, and liberals while shoveling more money from the middle class to that 1%.

    • 0 avatar
      TW5

      @ Charliej

      We created the problem by voting for people who borrowed public debt to rearrange the global economy to their liking. Needless to say, their version of a global economy had little or no benefit for the average American, and no one particularly liked us because they knew what our politicians and bureaucracies were up to. Trump is the corrective action.

      I feel bad for the rest of the world. They think pointlessly sparring with the United States is a prudent risk-reward strategy. You’ve become accustomed to dealing with American traitors who couldn’t care less if you put the interests of non-NAFTA nations before the protection of the NAFTA hegemon, but that’s changed now.

      If you let your PM hitch your wagon to a team of powerless oxen, you’re entering a world of pain. Attempting to remove Trump will only make it worse. Get smart, quickly.

      • 0 avatar
        Big Al from Oz

        TW5,
        Historically the Republicans have borrowed more than the Democrats. As will Trump. With the US Government borrowing hundreds of billions of dollars every year how will Trump not borrow to fill the void created by his spending and tax reduction?

        Like Putin, Trump is using Nationalism to hide his incompetence at managing the US. Like Putin, Trump has Ultra Nationalist that believe in him.

        Tragic as this is to the US and the “decent” majority who don’t want Trump and his “Reality” style floor show to continue.

        It’s tragic to see such a great nation as the US stoop to the level of Russia and other nations using standover tactics against friends and Allies.

        This is how to not make and keep friends. And the friends will reduce business.

        • 0 avatar
          TW5

          @ Big Al from Oz

          The previous administration borrowed nearly as much as all other administrations combined. Furthermore, it was a Republican administration that decided to move away from inflation-based stimulus to debt-based stimulus so Reagan borrowing was a corrective policy after stagflation.

          The only connection between Putin and Trump and between the US citizenry and the Russian citizenry is that we have many of the same enemies. When the US brought down the Soviet Union we installed an oligarchy to stabilize the country. This practice was particularly expansive when Yeltsin was about to lose power during the Clinton administration. That’s why the Russian oligarchy has no qualms about asking Hillary to sell them 20% of America’s uranium reserves. Of course she’ll do it. They are on the same team. They just need to make sure Putin isn’t going to interfere with whatever schemes they are plotting.

          Obviously, Putin hates the oligarchy. Doesn’t make him a good guy, but it does mean he has the same enemies as Donald Trump because the US also has gangs of wealthy people forming their own oligarchies. That’s why the media and the Clinton/Obama crime syndicate are working to thwart cooperation between the two leaders. Between the two of them, they know where many of the bodies are buried, particularly in regards to the 2016 election.

          • 0 avatar
            Big Al from Oz

            TW5,
            But why was the money needed? Beause of imports? No.

            The money was needed to balance and augment the US economy due to internal mismanagement. QE.

            Is this Obama’s fault? No.

            It’s the fault of poor regulations in the US finance industry. Not Canada, Mexico or even China’s.

            So don’t let the truth get in the way of your Ultra Trump Nationalist paradigms.

        • 0 avatar
          "scarey"

          You are not including Obama in your statement about republicans vs democrats. But you are correct in that republicans ARE part of the problem along with the democrats. They are JUST AS BAD as the democrats. Agree ? And you call Trump a racist for what reason ? Because he doesn’t want half of Mexico to sneak into the U.S. ? If you wouldn’t want 2 billion Chinamen entering Australia, are YOU a racist ?
          And your Prime Minister gave Hillary Clinton $20 Million. Why ?

      • 0 avatar
        Lou_BC

        @TW5 – I agree with what you said in that paragraph except for “Trump is the corrective action.” (See my reply to 28 cars up-thread)

        As far as you”feeling bad for the rest of the world.”, Ummm….Nope. With all due respect to your opinion, that is misplaced.

        We’ve seen the USA’s influence wane in many areas. Your president is just accelerating that loss of influence. The USA is doing more harm to itself than good with its current hodgepodge of foreign policy. China and Russia are loving every minute of it!

        • 0 avatar
          TW5

          @ Lou_BC

          American influence is not waning, and it’s not going to wane as long as the world is on US trade welfare. That’s what this is about. Trade welfare is relatively stable and its profitable for companies who know how to play the game. They’ve grown accustomed to it after decades of monolithic US trade policy.

          Like income welfare, US trade welfare bad for everyone. It’s bad for the host and for the recipients, and it should only be used to keep people alive, not as a foundation for the global economy. Furthermore, it is a risky strategy, despite what we’re told. Trade welfare is what led to the Great Recession because there was no good place for the corresponding surplus of capital in the US to go. As a result, investments that should have been made elsewhere around the world were made in the US housing market. Dumb.

          The saddest part of this entire mess is how dumb the average person is. The trade deficit makes bankers, hedge fund managers, etc filthy rich because they get to manage the capital surplus and all of the QE dollars we create to stimulate the declining middle class. These people are utterly relentless in their pursuit of other people’s money, and listening to “morally conscientious” global citizens pledge their allegiance to the bankster community to spite Trump is quite pathetic.

          • 0 avatar
            Lou_BC

            @TW5 – The current system helps billionaires and the “bankers, hedge fund managers, etc filthy rich”. I do agree with most of your comments.
            Why isn’t Trump going after China?
            Depending on who’s data you look at, there isn’t a trade deficit with Canada. If one looks at Mexico, virtually everyone’s data agrees that there is a trade deficit.
            As far as siding with “banksters” to spite Trump, it is a common practice to follow the doctrine of “any enemy of my enemy is my friend.”
            I don’t believe that it is a sound approach since a “friend of convenience” usually becomes a far greater adversary than the one you currently oppose.
            There does need to be safeguards in any system to protect the lower and middle class but trade wars isn’t the correct approach. Bringing back antitrust laws and outlawing stock buybacks would be one place to start.

  • avatar
    ToddAtlasF1

    As great a President as Trump is, everyone knows he is a polarizing figure in our world of intellectual haves and have-nots. Do Canadians have the same sense about Justin Trudeau?

    • 0 avatar
      Lou_BC

      @ToddAtlasF1 – To answer your question, many Canadians see Justin Trudeau as just a “pretty boy”, but most Canadians see Trump as just “pretty stupid”.

      Someone took a close look at statistics when it was reported that Trump was more popular in the USA than Trudeau in Canada. That doesn’t paint much of a picture. It was found that Canadians tend to distrust politicians much more than Americans but Americans distrust the institution of government much more than Canadians. That is very interesting and does show some fundamental differences between countries.

    • 0 avatar
      rpn453

      As a Canadian, I view both of their existences as political figures as high-level troll jobs, and I think both are a necessary step toward bringing things back to center.

      Like going from baggy pants to skinny jeans in order for people to realize how ridiculous the extremes are before going back to properly fitted pants again.

      • 0 avatar
        Lou_BC

        @rpn453 – you present an interesting point of view.

        Trudeau was the result of a shift to the right of center. Trump is a result of “Laissez-faire” economics and the devastation that has wrought upon the USA middle class. In the case of “Laissez-faire”, both the left and right were strong proponents of that system, therefore it is a shift to central tenant of “Government of the people, by the people, for the people”. Trump isn’t going to be that agent of change but he may just be the catalyst that speeds up that change.

  • avatar

    Ha-ha-ha. That wonderful Western alliance turned out to be a house of cards. One man having fun in White House and making random statements was enough to shake the whole construction into collapse. So the whole idea of alliance was to suck $$ out of US taxpayers pockets. So it was okay for American industry to slowly die but not okay if it happens to our “allies”.

  • avatar
    mikey

    @Todd…To answer your question. No! we do not. Justin inherited his fathers name, his mothers looks, and her brains, or lack thereof .

  • avatar
    mikey

    As I understand it the 2018 Chevy and GMC trucks we “assemble” here in Oshawa are a threat to national security . Okay , I get that. Keeping in mind of course, that said truck bodies are welded/bolted together in Fort Wayne Indiana. 24/7 a convoy of tractor trailers make the 7 hour trek to Oshawa. Oshawa assembles, and paints them and ships 90% 0f trucks back to the USA.

    How long will this go on ? Who knows? I however do know that American, and Canadian workers, are gainfully employed in this endeavour .

    Far be out from me to second guess the President of the United States. I just can’t get my head around how this could be construed as a threat to the national security of the USA .

    • 0 avatar
      Hummer

      It’s a national security risk because we have major trade imbalances with almost every country we trade with. There’s no way we can win if everyone is making money off of our country simply existing. Sure the trucks in Canada may not make a world of difference by themselves, but add all of those small losses together and it becomes billions of dollars that the United States loses.

      We can’t prosper the way we should if we let everyone take advantage of us, no ones looking to hurt other countries the way we have been hurt but we should even it out as much as possible, even if at the detriment to other countries. We must put our own selves ahead of other countries for once.

      • 0 avatar
        Charliej

        You won’t have trade imbalances any more. There will be no more trade for the US. Other countries do not have to trade with the US. They can simply ignore Trump and his idiocies and watch as the US slowly disintegrates. Mexico is making agreements with other countries to buy and sell to them. Corn and beef from Brazil and Argentina. Manufactured goods from Europe and China. Check how soybeans are selling in the US since China stopped buying them. When Mexico stops buying corn and pork from the US there will be a lot of unhappy farmers in Iowa and Nebraska. The US as a whole will see their productivity go down. Hello Trump’s recession.

        • 0 avatar
          Hummer

          How tell is the US disintegrating? Or economic numbers show exactly the opposite.

          Your entire premise is ridiculous, is the US suppose to allow every other country to screw us? The US doesn’t get ahead in any of these talks we just level the field. I get it you have Trump derangement syndrome but does it block even the most basic logical conclusions from being formed?
          Mexico is trying to play hard ball but at the end of the day they have no cards and their poker face is awful. Without the US pumping billions into their economy every year from unfair trade deals they would… well damn I can’t even see how it could get worse, the drug cartels already control everything so in essence the drug cartels are being funneled billions more just to pump more drugs into the US.

      • 0 avatar
        Ce he sin

        I’m intrigued by your concern about having trade imbalances. Let’s take China, with which you have a deficit of something like $375bn. Now let’s propose a complete ban on imports from China. The deficit is now gone. Thing is though, who’s going to make all this stuff instead? Not the US obviously because you something approaching full employment (which some ascribe to your current president, though I’ve seen no evidence of cause and effect). You’ll therefore have to import all this stuff from somewhere else or instead encourage immigration on an unprecedented level.

        • 0 avatar
          Hummer

          No one proposed a ban on imports from China, just Tarriffs to even out that trade balance. Theres no reason to stop trading but it’s foolish to continue to trade with a country that’s laughing all the way to the bank at our expense.

          • 0 avatar
            npaladin2000

            Especially given China places tarrifs on cars built outside of China and impprted. But I guess those tarriffs are OK?

          • 0 avatar
            Ce he sin

            Same thing applies. You want to “even out” trade with China, or anywhere else? You either import less from them, or export more to them. The US doesn’t have a sufficient workforce available to do either without hugely increased immigration.

          • 0 avatar
            npaladin2000

            Except China puts tarrifs on stuff the US exports to them. You did catch that part, right? And interestingly enough, there seems to be no general outrage at that fact. Hmmm…

      • 0 avatar
        dougjp

        The US has a trade SURPLUS with Canada so what’s the Trumped up alternate excuse going to be, just lie?

        • 0 avatar
          npaladin2000

          If we need steel to build tanks or whatever, currently we have to get it from other countries. Say we get invaded. What if said other countries decide “hey, we would prefer you lose, so we’re not going to sell you steel.” This is a problem. You want our sovreignity at the mercy of someone else’s elected government rather than our own? This isn’t a partisan thing, or it shouldn’t be. The fact that some people are making it so is really mind boggling.

      • 0 avatar

        I cannot see how it is the threat to our national security if we owe money to our enemies. We got real stuff in exchange to printed high quality paper or funny numbers on computer screen. If there is a conflict – we refuse to pay back and write off national debt, end of story. If they are not happy – who cares – it is a war. Can do the same thing with inflation or devaluation. I think writing off debt is a better idea. You can always come up with the reason why it is done, American lawyers are very innovative.

    • 0 avatar
      TW5

      It’s a national security threat because of the non-NAFTA content laundered through Canada and Mexico. Unfortunately, Canada and Mexico couldn’t care less, and American corporations are also opposed to fulfilling the intent of NAFTA content requirements.

      National security evaluation is the cattle prod of justice. That’s why Trudeau is squealing publicly. He realizes his poor decisions could hurt Canada quite badly, and he’s making a vain appeal to the average American voter who might be dumb enough to fall for a few fatuous arguments about Trudeau’s “US-friendly” regime. The same goes for many corporations in global oligopolies, like the auto industry. They hitched their wagons to some really nasty criminals, and now their shareholders are in a bind.

      We are all dealing with fallout from the same corruption. Trump was merely the device that revealed how widespread their treachery really is.

      • 0 avatar
        Lou_BC

        @TW5 – It is a concern to Canada because dumping or routing “dumped” products into or through Canada hurts Canada too. Canada has taken measures to block Chinese steel entering through Canada for USA.

        “The same goes for many corporations in global oligopolies, like the auto industry.”

        Interestingly enough you make mention of “many corporations in global oligopolies” but don’t seem to realize that those same oligopolies in most instances happen to be USA multinational’s. The system that you feel is rigged against the American worker happens to be controlled by USA corporations and USA billionaires. Your saviour-in-chief had zero problem handing that group a very nice tax cut.

        • 0 avatar
          TW5

          @ Lou_BC

          I’m aware that many US multinational corporations are the people pulling the strings. That’s why it’s important that the United States employ trade policies that address the synthetic trade deficit and require US corporations to invest in the US market. The current system allows US corps and US politicians to control the world by putting every economy on US trade welfare.

          Yes, Trump just gave many of the multinationals a huge tax cut to refocus on the US economy, and they are still bellyaching about investing in the US and following the underlying premise of NAFTA because violating the rules and selling off the US economy has been so lucrative for them. For the rest of us, well, we are $20T in the hole, and that’s assuming Social Security and Medicare come in on budget.

  • avatar
    mikey

    @ Hummer ..I couldn’t agree with you more. Not my place to question the policies of the USA.

    Love him, or hate him, I’m sincere when I say, how refreshing to see a leader actually putting the needs of the folks that elected him ahead of the rest of the world. We in Canada are just not there yet. Perhaps “some day” eh ?

    • 0 avatar
      Hummer

      Trust me I’m not complaining, and with this (Department of labor link) today I’m even more excited to know that we’re only at the very beginning of this wonderful time in history.

      https://www.dol.gov/newsroom/releases/osec/osec20180605

      Maybe Canada will get the hero they need, never know eh?

    • 0 avatar
      nrcote

      > We in Canada are just not there yet.

      Gee, Mikey, I always thought you were a fair-minded person.

      Turns out you’re just a typical Con. Sad.

    • 0 avatar
      Lou_BC

      “We in Canada are just not there yet.”

      Looks like Ontario is going to elect Doug Ford. Both Ford and his party are already plagued by scandal. Ford has not released any information on how he will pay for his platform. That would indicate Ontario already has a head start on the USA and Trump.

  • avatar
    ttacgreg

    Anybody on this thread remember Smoot-Hawley? The great Depression?
    It is doubtful.
    Anybody here possibly at least conceive that the USA is withdrawing from it alliances with all the “America First” idiocy, and may just leave us without friends and allies in face of Chinas and Russian’s hegemonic ambitions?
    I am nit saying we are, but there are those who see the USA as the dangerous rogue nation. I know, who the hell cares what the other 95% of the planet (Israel and Saudi Arabia being exceptions) think of the USA?
    Lost of people are saying, believe me, they are the best people.

    • 0 avatar
      Hummer

      How are we withdrawing from any alliances?

      By your reasoning a relationship that only exists when one partner is constantly wooing the other with large sums of money is healthy.

      This is simply unacceptable, if the countries we trade with are our allies then they shouldn’t want to take advantage of us. Why do you think our allies are going to leave us if we stop letting them screw us over? It doesn’t make sense.

      For once America needs to put its own interests first, and all good allies should understand that, we have to fix our own problems before we can help allies. No new concept there.

    • 0 avatar
      TW5

      Does anyone remember the Great Recession? I know it was 10 years ago, but I feel like there are still people alive today who remember the sordid details.

      The United States let its trade deficit skyrocket. Foreign countries liked US trade welfare so they poured capital into the United States to stop global currencies from rebalancing against the dollar. The US capital account ran a prolonged unsustainable surplus that led to many asset bubbles, the largest of which was in the US housing sector. When the bottom fell out of the US housing market, it triggered a global credit crisis and a global recession.

      Obviously, we learned a lot of lessons from those dark days, and the biggest lesson we learned is that we should do nothing about the trade deficit or the nations who thwart natural rebalancing of trade by manipulating the US capital account.

    • 0 avatar
      ajla

      “may just leave us without friends and allies in face of Chinas and Russian’s hegemonic ambitions?”

      Because China and Russia are well known nations of roses, sunshine, and good faith?

      I’m personally not a fan of these tariffs but the idea that the entire world will abandon all alliance with US over temporary metal taxes is hysterics.

      New tariffs happen with literally every US administration and they generally fail to bring about either the Pax Romana or the End Times. Calm down.

  • avatar
    Big Al from Oz

    I really believe this breakdown in the unnecessary NAFTA talks is caused by the US position, not Mexico or Canada.

    The position that the US finds itself in, unable to do a “deal” has brought out the worst in the US Ultra Nationalists, so the stick was brought out and the White House is implementing the Metals Tax.

    This is quite poor form from the US. Do as we want or we’ll fnck you over. This type of Diplomacy is used by the Russians and other low grade nations.

    You don’t fnck your friends because they don’t give you a dime when you ask for one, especially when you have enough dimes to buy some candy.

    Donald Trump and his economic goon advisors had better understand what keeps the US afloat.

    I do read some of the comments here on TTAC from the US Ultra Nationalists who want to see the US become an impoverished nation.

    The US (Trump) needs to start realising that it’s friends and Allies are already looking elsewhere to ply trade with reliable and balanced partners.

    • 0 avatar
      DenverMike

      The US is in a position of power, with its crazed addiction to imports, take that as a good thing or a bad thing, but the US is an importing monster.

      So Trump sees that as an opportunity, like a business owner just looking to raise the fees it charges, that are already much lower than the competition’s fees.

      Or simply raising the fees to what other “companies” charge the US.

      If other countries want to lower their tariffs to US levels or can all agree to no fees at all, that’s OK too.

      But simply asking for, or demanding fairness and equality shouldn’t meet such wild insane resistance.

      That’s OK, I’m sure they’re obligated to cry and snivel before taking their “meds”.

      • 0 avatar
        Ce he sin

        I’m still waiting for somebody – anybody – to tell me how the US or any developed country is going to suddenly reduce its deficit in manufactured goods without a sufficient workforce to replace overseas production with local production.

        • 0 avatar
          Hummer

          No ones stopping countries from exporting their products into our country, but if it’s not fair and reciprocal then there needs to be tariffs to even out the trade imbalance. It’s that simple. If companies want to bring manufacturing plants to our shores to increase profits then the work force can be had. You seem to forget that when companies need good people to work for them they can be had by offering more competitive salaries to get those people.

          The end result is that employers are actively seeking employees and if they can’t find what they want they will increase their pay rates. If they can’t raise salaries high enough to attract good employees then the companies will have to move overseas to cheaper locations and calculate in the costs of tarriffs into their products. The average person is the winner, as good paying employers are seeking people to work for them at higher rates.

          We have sufficient workforce.

          • 0 avatar
            Ce he sin

            No, really, you don’t. You can’t simultaneously claim to have almost full employment and also have potentially tens of millions of people available to do all these hypothetical manufacturing jobs (usually boring, repetitive, lowly paid and dead end don’t forget) that those who want to “balance” trade will need. Sure, manufacturers can offer more money – which just makes their products more expensive – to entice people from other low paid jobs, but if you entice all your burger flippers, child minders and baristas to a new life of assembling widgets who’s going to flip your burgers, mind your kids and serve your overpriced coffee?

          • 0 avatar
            DenverMike

            Why jump to the false dilemma?

            Instead of just ballz to the wall or nothing all, how about, with the subtle help of fair/balanced tariffs, possibly importing around 2% less, exporting 2% more, just to start things off, see how it goes, we could always call the whole thing off.

            Except it would mean producing about 4% more domestically, and yet no shock to anyone’s “system”, nor panic in the streets.

  • avatar
    hreardon

    Two books from the early/mid 90s deserve to be revisited at the moment:
    “The End of History” by Francis Fukuyama, and “The Clash of Civlizations” by Samuel Huntington. Both books, in retrospect, did a good job of painting the world that we live in today.

    The Western alliances, political, economic and military, were all formed after WWII in an effort to blunt the Soviets. America wrote trade agreements that were overly generous to its partners to ensure that they were pulled into our orbit. Post WWII, Europe and Japan needed to rebuild, America had capital and manufacturing capacity, and there was a common enemy.

    Post 1991, absent the Soviets, this system became less relevant by the year. It has essentially taken 25 years for that socio-economic system to devolve. What’s taken its place is Huntington’s Clash of Civilizations – where tribalism has replaced nationalism, and people have retreated into socio-cultural groups (contrary to what many academics thought would happen). In short, as the world became smaller via technology, people have actually turned inward.

    I am, of course, over-simplifying. But now that there is no common enemy, and the US populace has finally begun to realize that no, not everyone needs to go to college. and that basic manufacturing / blue collar jobs are actually crucial to a well balanced society, and that financialization has wrecked both our buying power and well being.

    Trump knows that he holds a lot of cards: while the Chinese may be the largest market in terms of quantity, the US market is far more robust, trustworthy and above all – far better regulated (those are relative terms, I grant you). The question is if Trump will successfully accomplish a ‘rebalancing’ of trade through his type of brinksmanship. Of course it’s risky, but so would continuing down the same path we have been for the past 40 years.

    I’ve said before that I find Trump distasteful, but the Cold War paradigm is (finally) past – and we’re in this awkward middle phase. It’s dangerous because a lot of forces have been unleashed and are now competing out in the open. It’s messy, it’s foggy, and nobody knows where or how things will play out. But the rules by which we played for 60 years have been broken.

    • 0 avatar
      Rick T.

      Well thought out and written. Thank you for a civil contribution. (And I’m not saying that just because I mostly agree with you.)

    • 0 avatar
      Big Al from Oz

      hreardon,
      Good comment and I agree with some of it.

      The US did considerable work after WW2. But the US also profited massively from this. But WW2 sits back in history over 70 years ago. The problem the US confronts with the EU and Japan is competition. This competition is based more on democracy and how it managed and technology.

      China is a different story. China has the capcity to displace US capitalism, influence and military.

      The EU (all Western democracies) don’t pose the same risks as China. Because the West is quite similar in many ways, even these so called manufacturing job loses.

      So, I believe the position the US is finding itself in ie, loss of influence means the US needs to form an ever closer relationship with the West.

      I believe this is what the US wants, but its (Trump and his advisors) targeting the wrong areas of the relationships to strengthen Alliances.

      Trump is ill placed to expand and maintain US security, socially, economically, politically and militarily.

      • 0 avatar
        hreardon

        Big Al –

        I agree with you on those points. My international relations background tells me that the smart move for the US is to strengthen its alliances, not just the EU, but within the American hemisphere and in the Pacific – all in an effort to blunt China.

        Were I negotiating a re-balancing between the allies, I would probably want Trump’s blunt, initial salvo to set the terms of the negotiation strongly in our favor. Unfortunately, I don’t believe for a moment that Trump is nuanced enough to recognize the longer term strategic play that needs to be put into motion.

        Circling back to China for a moment: based on their recent political moves to increasingly control the media, aggressive Pacific expansion, and to essentially make Xi Jinping “Caesar ad vitam”; I foresee a clash coming sooner rather than later – especially if the US succeeds in bringing North Korea to heel (a big “if”, granted). The Chinese economic system may be more capitalistic than ours in many ways, but their socio-political orientation runs absolutely contrary to traditional open, Western values. A confrontation *is* coming. The trade wars are the opening salvo.

        If Trump really wanted to mess with everyone, here’s the announcement he would make to blunt China. It would effectively expose every politician and corporate shill who opposes it as utter hypocrites:

        “Americans believe in openness, and we also believe in the safety and well being of our workers and our environment. China has exploited its workforce and destroyed the environment in an effort to sell its products well below our comparable cost structure. As such, the US is going to impose an “Environmental and Labor Equalization Fee” on all Chinese imports into the US.”

        Watch the democrats heads’ explode, and republicans hands wringing with that kind of announcement.

    • 0 avatar
      Lou_BC

      @hreardon – well said.

  • avatar
    "scarey"

    @BigAlFromOzYou are not including Obama in your statement about republicans vs democrats. But you are correct in that republicans ARE part of the problem along with the democrats. They are JUST AS BAD as the democrats. Agree ? And you call Trump a racist for what reason ? Because he doesn’t want half of Mexico to sneak into the U.S. ? If you wouldn’t want 2 billion Chinamen entering Australia, are YOU a racist ?
    And your Prime Minister gave Hillary Clinton $20 Million. Why ?

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