Why are we allowing these trade wars to escalate?

May 16, 2019 by epoetus

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1) The President has no legal power to impose these tariffs as congressional oversight and support for them are nonexistent.
According to the Constitution, the legislature has the power to levy tariffs. In practice, however, congress has given the President more latitude over doing this unilaterally. That does not mean that Congresses oversight has been eliminated, or that the people should put up with this ineffectiveness by Congress.
The WTO is stepping into the fray now. “The Geneva-based body [WTO] will set a very high bar for countries to invoke the controversial Article 21 “national security” justification to impose trade restrictions. […] It cites the need for an “emergency in international relations” that must be essentially linked “to the ‘hard core’ of war or armed conflict.””
2) Obviously he does not realize the true impact of tariffs on the average American — it is effectively a regressive tax which goes to corporations based in the US who are selling below the tariffed rate

In Iowa: these tariffs have not had the desired impact. Instead, they have created a global trade war, raising costs for Iowa businesses and causing workers to lose their jobs. Closer to home, the retaliatory tariffs that China has levied on almost all U.S. agricultural exports has seriously hurt Iowa’s corn and soybean farmers. As long as these harmful tariffs remain in place, they will continue to inflict hurt on Iowa and the broader U.S. economy. It is not expected that China will return as a customer for soybeans once the tariffs are lifted either.

In Spartanburg South Carolina: The steel tariffs have had a chilling impact on growth plans in the county, which has the largest BMW manufacturing facility in the world.

The Trump administration’s tariffs were passed on to American consumers in increased prices with “no impact” on foreign exporters, wrote the New York Fed’s Mary Amiti, Princeton professor Stephen Redding and Columbia professor David Weinstein.
“We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters,” they wrote. “We also find that U.S. producers responded to reduced import competition by raising their prices.”
3) The Democrats have not said anything about this despite the legislature serving as the government body that is supposed to control these matters (e.g. NAFTA, TPP have all been trade agreements that required legislative approval).
Schumer supports the tariffs, but many Democrats are either quiet about it or seem unsure of the best position and communication strategy for it.
These are bizarre choices, and not only because economists and historians no longer have to conjure up fuzzy memories of the Great Depression to explain why trade barriers can backfire, or reference abstract theories to illustrate why being left out of new free-trade pacts, including the recently reconstituted TPP , puts the United States at a disadvantage. [The TPP, like NAFTA before it, unfortunately was not so much of a trade agreement as it was a power grab for the Investor Dispute mechanism and a further lowering of worker and human rights standards for the United States among other things. In short, Kamila, Bernie and Trump are on the right side of history with respect to NAFTA and TPP]
There is interest in reigning in Trump on his executive tariff decisions:
Sens. Tim Kaine (D-Va.) and Tom Carper (D-Del.) are introducing legislation on Wednesday that would require Congress to vote to approve tariffs implemented for national security reasons.
Under the bill, obtained by The Hill ahead of its release, a president could implement tariffs for national security reasons under section 232 of the trade laws, the International Emergency Economic Powers Act and the Trading with the Enemy Act, but Congress would have to vote within 120 days to continue them or the financial penalties would sunset. A resolution approving the tariffs would need to win over a simple majority of both chambers.

 

4) He also does not appear to understand whether or not we have a problem with our China trade relationship and what could or should be done about it. Is he simply be acting aggressive to look powerful?

Trump is using the growing trade deficit as the explanation for why the US has a bad deal with China. The US created a bilateral trade agreement with China in 1979, and does not appear to have entered into another trade agreement since. TPP was the recent US strategy for dealing with its growing concerns with China as a competing world trade partner, because it intended to strengthen relationships with other countries in Asia in an effort to isolate China. Trump had pledged both faster growth and lower trade deficits during his political campaign. But his impulse to achieve faster growth through government borrowing contributed to a wider trade gap. In the view of the vast majority of economists, trade wars of the kind Trump has instigated benefit no one in the long run. And by themselves, they don’t typically produce any meaningful change in the trade deficit.

The case for looking aggressive merely to demonstrate his power seems credible.

5) The burden of these tariffs on the American people goes on top of a pile of executive decisions made by the President, supported by his administration and Republican legislators, which add up to a case against them all as they have no regard for upholding the laws of this nation, or honoring the democratic will of the people, which they have sworn to do:
• Obstructing further investigation of the 2016 elections, despite clear conflicts of interest and clear evidence of obstruction of justice
• Normalizing the idea of working with foreign governments to influence the elections
• Fomenting more racist and misogynist violence than this country has seen in decades
• Supporting regime change to the point of supporting military intervention against Venezuela and Iran
• Nepotism in the White House and corruption in his business dealings
• Obstructing access to his tax returns
• Illegally using the concept of “National Emergency” to engage in activities that congress does not support: funding the construction of more wall along the southern border, and raising tariffs
• Meeting with dictators and other leaders who clearly do not support democracies of and by the people in their countries, and promoting their agendas
• Behaving as though he wants to turn the United States into a dictatorship
• Deliberately flouting the science on and best advice on matters like climate change, healthcare, gun control, mass incarceration, and other topics so that he can appeal to his racist Evangelical base and Republican campaign contributors – the Republican political strategy for decades
Who benefits from all of these actions and policies? It is not the average American. At what point do we label him, his administration, and the Republican party complicit in treason against the American people and the United States? Has that line been crossed already?

 

References

Trump’s steel and car tariffs hit major legal hurdle
https://www.politico.com/story/2019/04/26/trumps-steel-car-tariffs-1384221

US says WTO national security decision ‘seriously flawed’
https://www.reuters.com/article/us-usa-trade-wto-idUSKCN1S21V9

Democratic response
https://thehill.com/policy/finance/436025-democrats-introduce-bill-to-rein-in-trump-on-tariffs

For the most part Democrats have not responded, but they should
https://www.washingtonpost.com/opinions/democrats-should-be-shouting-trumps-trade-failures-from-the-rooftops/2019/05/13/c1a484e4-75bb-11e9-b7ae-390de4259661_story.html?utm_term=.355fc3bc570b

An historic view of tariffs – Congress is unable to effectively manage tariffs.
https://www.nationalreview.com/2018/03/tariffs-congress-handed-president-power-to-levy/

China isn’t cheating on trade
https://www.theatlantic.com/ideas/archive/2019/04/us-trade-hawks-exaggerate-chinas-threat/587536/

Congress should take back its authority over trade tariffs
https://foreignpolicy.com/2019/05/04/congress-should-take-back-its-authority-over-tariffs-trump/

The Republicans don’t like the tariffs, and they can stop him, but they’ve given up trying to control Trump
– https://www.vox.com/2018/3/8/17097206/trump-tariffs-congress
– https://www.businessinsider.com/can-congress-stop-trump-tariffs-trade-war-2018-3/

Tariffs have no impact on countries that export to the US – it just impacts consumers
https://www.salon.com/2019/03/26/trump-tariffs-costing-americans-1-4-billion-a-month-have-no-impact-on-foreign-exporters/

Impact of tariffs on Iowa farmers
https://www.press-citizen.com/story/opinion/2019/04/23/trump-tariffs-hurt-iowa-consumers-farmers-and-families/3549907002/

Impact on manufacturing – BMW and Spartanburg South Carolina

https://www.wunc.org/post/bmw-brought-jobs-south-carolina-now-tariffs-are-causing-concern

https://www.npr.org/podcasts/381444600/marketplace — 4th minute on the May 15, 2019 broadcast

Why has Trump focused on tariffs as the tactic to use for changing trade policy with China? What is the problem he’s trying to solve.
https://www.pbs.org/newshour/economy/u-s-trade-deficit-hits-record-high-does-it-matter

 

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