One notable area where President Trump has spent little time keeping his campaign promises is trade reform. I figured he was simply far too busy with higher priorities, like the border wall, the travel ban, terrorism, North Korean and Iranian nukes, among others, more than a full plate for most mortals.
But, it hasn’t been priorities at all. President Trump has been stalling. It could be he needs more information before tackling the problem of America’s trade imbalance, not a small problem. He may have been studying the consequences of his favored course of action (and mine), imposing import tariffs.
According to Zero Hedge, President Trump has been stalling because he is in the pocket of Wall Street, which will certainly be negatively affected by import tariffs. Ha! Donald Trump has NEVER been in the pocket of ANYONE!
Whatever the reason, it appears President Trump is now ready to move forward with his trade policy agenda, which he is doing in opposition to a large presence of Wall Street advisors in his cabinet.
Long before civilian Donald Trump was on the presidential scene, I wrote an article for Powdered Wig (original 2013) entitled “Time to stop being stupid!” regarding our way outta’ whack trade relationship with other countries, particularly China.
The impact of the liberal “free trade benefits everyone” myth can clearly be seen in the shuttered factories from sea to shining sea. So wonderful has free trade been that I believe Detroit, once the most affluent city on the planet, should change its name to NAFTA, just to poke the morons in the eye who came up with the short-sighted, anti-America scheme. Anyone with an IQ higher than the average ground squirrel (like Ross Perot) could have told you how that would turn out.
The bottom line is the most valuable thing in the history of the world is the American consumer market, which we have been giving away to strangers for free for decades, while they laugh all the way to the bank and continue lending us money that they made off of us. Stupid, yes?
Even more stupid is American manufacturers, who have become wealthy corporations selling their products to the American consumer, are moving offshore to take advantage of cheap foreign labor, with the intention of shipping their products back to the United States and sell them to the very people whose jobs they took with them to China and Mexico, making even more money for themselves in the process.
And we are going to allow this to continue? Really? I trust President Trump’s judgment on this, based, without question, upon the advice of trusted and knowledgeable advisors.
Wall Street hates the idea of import tariffs. They have a lot of money invested offshore. Obviously, our trade partners hate the idea, which will make American manufacturers instantly competitive again. Horrible thing, right? And, of course, American
traitors manufacturers who moved their operations overseas are against the idea, which will give their American competitors an immediate advantage. Let’s call it a reward for staying home.
I would make the tariff so punitive that it will eventually push the traitor manufacturers out of the US marketplace. You want to move your widget manufacturing operation to Mexico, giving American jobs to Mexicans? Fine, enjoy selling your products to Mexicans.
From Zero Hedge
While one of Trump’s recurring campaign promises was that he would “punish” China and other key US trade counterparties if elected, for taking advantage of free-trade by imposing steep tariffs and duties on foreign imports to “level the playing field”, the President’s stance changed drastically after the election, U-turning following his amicable meeting with China’s president Xi Jinping in March, but mostly as a result of pressure by his ex-Goldman advisors to keep existing trade arrangements in place and not “rock the boat.”
Now, all that may be about to fall apart.
According to Axios, behind the constant media scandals, “one of the most consequential and contentious internal debates of his presidency unfolded during a tense meeting Monday in the Roosevelt Room of the White House” where with “more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they’re hell-bent on imposing tariffs — potentially in the 20% range — on steel, and likely other imports.”
In other words, Trump – true to his campaign promises – is set to launch a global trade wars after all, one where then main country impacted would be China, however the collateral damage would extend to Canada, Mexico, Japan, Germany and the UK.
And what may be even more striking is that Trump overruled his cabinet, as “the sentiment in the room was 22 against and 3 in favor — but since one of the three is named Donald Trump, it was case closed.” Axios adds that while “no decision has been made, the President is leaning towards imposing tariffs, despite opposition from nearly all his Cabinet.”
Needless to say, if Trump follows through, the outcome would have a profound effect on U.S. economic and foreign policy; Trump will formalize his decision in the coming days.
What is also notable, is that this is the first time – so far off the record – in which Trump has openly defied his Wall Street establishment advisors, while siding with the Bannon “populist” front:
“In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.
Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.“
As Axios adds, the reason why Trump defied the guidance of his Wall Street-derived advisors is Trump’s base “which drives more and more decisions, as his popularity sinks — likes the idea, and will love the fight.”
This, more than anything, should send shivers down Wall Street’s spine, because for all his bluster and outrageous media outbursts, Trump had largely been in Wall Street’s pocket so far.
Not anymore, and with Trump’s base hell bent on punishing the 1% (which includes Wall Street), if Trump indeed launches global trade war, his future decisions will become increasingly market unfriendly.