Saturday, July 14, 2018

Editorial: Negotiating with Tariffists

Donald Trump has been throwing his weight around on global trade matters with little apparent long-term planning. He threatened tariffs on steel and aluminum imports. Then, when America’s trade partners retaliated with tariffs on American products, he upped the ante. When he proposed tariffs on $34 billion worth of Chinese imports, Beijing retaliated with tariffs on an equal value of US goods, including beef, pork, soybeans, cars and computer chips. So Trump has threatened to escalate the battle with tariffs on more than $200 billion worth of goods from China.

Trump got a lot of mileage in his 2016 campaign with his co-opting of the populist belief that “free trade” deals have contributed to the misery and inequality afflicting working-class communities in America. That may have made the difference in his razor-thin victories in Wisconsin, Michigan and Pennsylvania.

But when, as president, he started the saber rattling, Trump showed little sense of the trouble he was unleashing. “Trade wars are good and easy to win,” he tweeted in March. He had imposed tariffs on solar panels, newsprint and washing machines before he started the war on foreign steel and aluminum. But after he announced tariffs on steel and aluminum from Canada, Mexico and the European Union on “national security” grounds, EU officials announced they would apply tariffs on a series of American goods, including Harley-Davidson motorcycles. When Harley-Davidson announced it would move some production overseas to avoid the tariffs, which would increase the cost of motorcycles by an average of $2,200, Trump urged the company to “be patient.”

Trump, a practiced grifter, advises American businesses and farmers to “be patient” in the same way itinerant driveway pavers collect a down payment, and advise the homeowner to “be patient” when they promise to be back in a week or so to do the work.

Tariffs on Mexico, Canada and the European Union are questionable, as they are traditional allies and do not engage in the sort of predatory trade practices China uses. Trump could use some allies in his attempt to rein in China, but the alienation of US trading partners comes at a time when Trump suggests he is also considering reducing the US commitment to the North Atlantic Treaty Organization.

The Mexican and Canadian tariffs also could wreak havoc on economies that are closely integrated with neighboring US states after 24 years under NAFTA. Goods and services trade with Canada totaled $673.9 billion in 2017, with a net trade surplus of $8.4 billion for the US, owing to its $25.9 billion surplus in services, according to the Office of US Trade Representative.

According to the Department of Commerce, US exports to Canada supported 1.6 million jobs in 2015 (the latest data available). The tariffs are supposed to protect 140,000 US steelworker jobs.

Goods and services trade with Mexico totaled $616.6 billion in 2017. Exports were $276.2 billion; imports were $340.3 billion with a US deficit of $64.1 billion in 2017. However, the US had a services trade surplus of $7.8 billion, and trade with Mexico supported 1.2 million US jobs in 2015.

US goods and services trade with the EU totaled nearly $1.1 trillion in 2016, making it the largest trading partner with the US, and a net trade deficit for the US of $92 billion, or less than 1%.

The US had a $147 billion deficit on goods trade with the EU out of a total of $686 billion in 2016. But the US had a $55 billion surplus in services with the EU out of a total of $407 billion, and US exports to the EU supported 2.6 million US jobs in 2015.

The largest trade deficit is with China, which did $648.5 billion in trade with the US, and recorded a $385 billion goods and services surplus in 2016. US exports to China supported 911,000 jobs in 2015, with 601,000 supported by goods exports and 309,000 supported by services exports.

Now that Trump has targeted a wide range of Chinese products, the conflict is likely to cause collateral damage among American companies that rely on those products in the global supply chains. The White House also is placing restrictions on investment and on visas for Chinese nationals as leverage to force Beijing to make changes, including opening its markets to American companies and ending its practice of requiring firms operating in China to hand over valuable technology.

The New York Times reported July 5 that companies like Husco International, a Wisconsin-based manufacturer of parts for companies like Ford, General Motors, Caterpillar and John Deere, now face a 25% increase on a variety of parts imported from China. Austin Ramirez, Husco International’s chief executive, said that increase would immediately put him and other American manufacturers at a disadvantage to competitors abroad.

“The people it helps most of all are my competitors in Germany and Japan, who also have large parts of their supply chain in Asia but don’t have these tariffs,” he said.

Farmers also have been hit by Chinese retaliatory tariffs on pork and soybeans — a serious blow, as China has been a market for mor than half of American soybean exports, and fears of the tariffs have pushed down the price of soybeans by roughly 15% in recent months, wiping out potential profits for that crop. American farmers also risk losing key markets in the long term, as farmers in Brazil are boosting soybean production to scoop up the Chinese market.

Progressive Democrats should support the need to renegotiate NAFTA, the World Trade Organization and other trade deals to preserve the authority of governments to regulate business and industry and abolish investor-state dispute settlement panels that can overrule national courts. Progressives should promote a trade policy that protects labor and environmental standards.

But remember that Trump has no principles guiding his trade or immigration campaigns. As a developer, he used undocumented Polish workers in 1980 to demolish a department store to make way for Trump Tower; then he forced them to go to court to get paid. Trump's resort, Mar-a-Lago, in June asked the Department of Labor for 61 H2-B visas for foreign servers and cooks. He used cheap Chinese steel and aluminum in Trump hotels in Las Vegas and Chicago and he has used Chinese factories to make his merchandise. His campaign gets flags from a Chinese factory whose owner said he has already started to make flags for Trump’s 2020 campaign. And White House adviser Ivanka Trump’s foreign-made products on her fashion line won’t be touched by tariffs.

And on May 13, two days after state-owned Metallurgical Corporation of China offered to lend $500 million to Indonesian developers to finance a Trump-branded resort in Indonesia, Trump pledged to help ZTE, a Chinese telecom equipment manufacturer with ties to the Chinese government, recover from a $1.19 billion fine and a ban on dealing with US companies, after ZTE sold technology products in North Korea and Iran, in violation of sanctions, then lied about it to US officials. US intelligence officials also warned of security risks in allowing ZTE phones to be used by government employees. But Trump tweeted: “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

When asked about the business deal in Indonesia, White House deputy press secretary Raj Shah referred questions to the Trump Organization, saying, “You’re asking about a private organization’s dealings.”

So don’t count on Tariffist Trump to do the right thing. — JMC

From The Progressive Populist, August 1, 2018

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Copyright © 2018 The Progressive PopulistPO Box 819, Manchaca TX 78652

Selections from the August 1, 2018 issue

COVER/Kent Paterson
López Obrador’s victory in Mexico raises hopes in Latin America

Negotiating with tarrifists


Young democratic socialists bringing the heat

RURAL ROUTES/Margot McMillen
Yes, the planet is at risk

Trump freezes Obamacare payments, further undermining affordable care;
Louisiana Medicaid expansion may have saved thousands of lives;
Brett Kavanaugh picked to kill the ‘administrative state’;
Trump administration comes out against breastfeeding;
Pruitt’s successor at EPA may be more dangerous;
Heat waves could rise another 12°F;
Surely Trump will strip citizenship carefully;
Rural groups urge Congess invest in rural business ...

Dems must address rural voters

Knowing when to turn off the news

Inside the GOP rationalization chamber

How to cover a revolution

Homeowner seeks court action against fraudulent foreclosures

Telling the truth about immigration

There’s more to immigration than people piling up at the border

What fossil fuels and factory farms have in common

HEALTH CARE/Joan Retsinas
Barreling toward dystopia

What they think they know makes Trump supporters dangerous

Labor rules expand skimpy ‘association health plans’

The wages of Trump

Paramilitary politics and the world’s children

Asia’s environment becoming ‘full-blown crisis’

What zero tolerance means for refugee families

Interest in Hitler heats up

SATIRE/Rosie Sorenson
Gut check

When 1 million Americans voted socialist

BOOK REVIEW/Heather Seggel
Too big to fail to catch the irony

Wednesday, July 11, 2018

The Trump Administration is never afraid to hurt children in its never-ending quest to create markets for its cronies

By Marc Jampole

There always have been a limited number of ways for companies to sell more goods or services. The most obvious are to develop new products or to sell in new territories or to new markets, the latter being the point of global trade. Just as significant is to the creation of new needs for an existing product or service—new reasons to buy the same product from the company or industry, as when a pharmaceutical company finds a new use for an existing prescription drug. Sometimes, the economy or society itself creates the new need. A few old examples should suffice: In the 19th century, once states required many professionals to pass rigorous examinations that tested knowledge of standardized but highly specialized information, there was a new need to educate lawyers, physicians and other professionals which led to the rapid expansion of universities. During the same century, the consolidation of regional companies into national corporations created a new need for advertising. The rise of the fast food industry in the 20th expanded the market for throwaway plates, bowls and utensils enormously.  

Most lobbying of legislatures and the administrative offices of the executive branch of state and federal governments is intended to make sure government either helps to create a new market or doesn’t do anything to shrink an existing market. An example of the former is to enter into an agreement with foreign countries that lowers tariffs on the products a company sells. An example of the later is to ban the use of a certain material, say lead in paint or gasoline. These governmental decisions result in companies and industries gaining or losing business. Almost since the founding of the United States, companies, especially larger ones, have made sure that elected officials understand that.

Unfortunately, all too often, our elected officials listen and respond with laws, regulations and policies that reward a few, typically contributors, at the expense of the many. 

And all too often in the Trump Administration, the actions that create a new market for their cronies and contributors involve directly hurting children.  We can see this most obviously in the recent policy to break up families that are seeking refugee status in the United States from countries south of the border, sending parents to one center and children to another. It is now well-documented that U.S. Immigration and Customs Enforcement (ICE) has depended heavily on private organizations to process, house and feed the tens of thousands of refugee men, women and children nabbed at border crossings. Estimates of how much it costs to house each child range from $600-$900 a day, most of which goes into the hands of private companies that have courted Trump and Pence for years. Considering the accommodations, the profit margins must be phenomenal.

This week’s brouhaha over the United Nation’s World Health Assembly statement on breastfeeding is a virtual repeat of the decision to imprison everyone who tries to enter the country and take their children from them. Trump attempted to bully the UN and the rest of the world to help companies selling infant formula. But that policy hurts children. Virtually every expert agrees that breastfeeding an infant produces healthier and smarter babies who have fewer health problems later on and tend to live longer. But of course every baby who is breastfed is one less family buying infant formula, which, while a good substitute when breast-feeding is impossible or harmful to the mother, should for most mothers be a distant second choice to breastfeeding. We may not see the horrible photos of traumatized children and parents, but policies and advertising that steer mothers away from breastfeeding are nonetheless harmful to large numbers of children.

When the UN wanted to issue a strong statement recommending that mothers breastfeed, Trump officials went bat-shit crazy, pushing their weight around and threatening trade sanctions and withdrawal of military aid if any nation dare support a resolution at the United Nations. America officials wanted to water down the resolution by removing language that called on governments to “protect, promote and support breast-feeding.”  The administration’s threats made Ecuador back down from introducing the resolution.

To quote the New York Times,Health advocates scrambled to find another sponsor for the resolution, but at least a dozen countries, most of them poor nations in Africa and Latin America, backed off, citing fears of retaliation, according to officials from Uruguay, Mexico and the United States.” The reason the administration didn’t like full-hearted support for breast feeding was obvious to everyone from the beginning. The Trump Administration wanted to avoid narrowing the market opportunities for Abbot, Nestles and other makers of infant formula.

Unlike the fiasco at the border, the latest attempt to ignore science and put the interests of business first even though it directly hurts thousands of children, has a somewhat happy ending. One nation proved fearless enough to agree to introduce the resolution in its strongest version. For some reason, this nation didn’t fear retaliation from Trump. For some reason, Trump feared pissing off this nation and refused to threaten it in any way.

That country was Russia.

Yes, Russia became the hero of the moment, defending both science and the right of families all over the world to get accurate information and the best nutrition for their children.

Meanwhile, America continues to lose the respect of the rest of the world.

Especially appalling—and depressing—is that direct harm to children is the end result of so many efforts by the Trump Administration to create business opportunities for its cronies. Trump doesn’t seem to care if he creates a generation of PTSD sufferers by ripping children from their families. He doesn’t seem to care if millions of babies around the world could get inferior nutrition, which will shorten their lives. Trump and his Education Secretary Betsy DeVos don’t care that all the studies show that well-funded public schools produce better educated students than do private schools or charter schools. In all three cases, the Trump Administration believes the best interests of industry far outweigh the health or educational needs of children.

Thursday, July 5, 2018

We celebrated the Declaration of Independence on July 4th, but we live every day by a Constitution that the Supreme Court says favors property over people

By Marc Jampole
Whether grilling hamburgers, attending a parade, watching fireworks, playing softball or zoning out to the Dirty Hairy binge-a-thon on Sundance TV, our celebration of July 4th commemorated an obsolete document.
All the fuss about Independence Day celebrates the signing of the Declaration of Independence, easily recognized by its key passage, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
The idea that animates the Declaration of Independence is equality of rights and opportunity for all men (which at the time meant white males but has since been expanded to include people of color and women). This ideal, however, was superseded by the Constitution, which as interpreted by the Supreme Court almost from its first case onward, holds as government’s primary function the protection of private property. “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America” is how the Constitution begins. Sounds like a contract between large corporations, which, as it turns out it was, and is.
I have been reminded of the predominance of property over people in U.S. law reading We the Corporations: How American Corporations Won Their Civil Rights, Adam Winkler’s breezy history of Supreme Court decisions that have gradually recognized and expanded the rights of corporations. As Winkler notes, one strand of legal thinking shared by many of the rich white merchants and slave owners who wrote the Constitutions “understood the Constitution largely in terms of protecting private property and private economic relations from majority rule.” This theory predominates the thinking of the Reagan Era right wing. It is a guiding principle of the Heritage Foundation, Cato Institute, Mercatus Center and other 21st century right-wing propaganda mills. It animates the political contributions of the Koch brothers. (see Nancy MacLean’s Democracy in Chains.)
One ramification of the industrial and financial revolutions after the Civil War was that vast amounts of property (wealth) were transferred from the hands of individuals to corporate control. Even though individuals controlled corporations and other individuals owned them, a corporation was something different from the sum of those individuals. In essence, a corporation comprises its tangible and intangible assets and its debts (which are negative forms of property) and thus is nothing more or less than a piece of property, no less than land, furniture, equipment or the right to use an image.
Early on, the managers and owners of corporations wanted to assert corporate rights, while governments and reformers wanted to restrict them. It was up to the Supreme Court to interpret the Constitution and decide what rights corporations—compositions of property and property rights—had. According to Winkler, the “corporate rights” movement developed alongside the Civil Rights movement, and was more successful earlier on.
From the turn of the 20th century to just before World War II in what is known as the “Lochner Era,” named after a 1905 case, the Supreme Court distinguished between property rights and liberty rights. The court gave property rights to corporations, but not liberty rights, such as the right to free speech. In fact, it was in this era that the first laws were passed limiting the ability of corporations to give money to support candidates. But the Court in the Lochner Era also invalidated state and federal legislation that constrained corporations, such as minimum wage laws, federal child labor laws, and regulations of the banking, insurance and transportation industries.
After World War II, the Supreme Court under Chief Justice Earl Warren focused much more on protecting the rights of individuals, but to the degree that these included property rights, Court decisions also helped corporations.
Since Nixon replaced four Supreme Court justices with pro-business conservatives in the late 1960s and early 1970s, the Court has gradually recognized that corporations—again, collections of property owned collectively by individuals—have liberty rights, too, in decisions such as First National Bank of Boston v. Bellotti, in which the Court ruled that corporations had a First Amendment right to speak and spend freely on ballot referenda. The coup-de-grace for corporate liberty rights was, of course, Citizens United, which has enabled corporations to give unlimited amounts of “dark money” to support candidates.
By giving corporations that same rights as individuals, the Supreme Court has enthroned property as more important than “Life, Liberty and the Pursuit of Happiness.” It has also created a number of asymmetries which give large corporations overwhelming advantages over smaller businesses and individuals. While corporations can’t cast votes, they have greater influence over elections than individuals because they have more money to spend. Once de facto limits are removed from campaign contributions, as Citizens United did, those with more money have more votes. Likewise in employment: the corporate entity has the power not to hire someone who doesn’t accept an arbitration agreement.
Most Americans like to think that the great arc of history—and in particular American history—bends towards freedom and justice for all, as Martin Luther King once said. The freeing of the slaves, the gaining of the right to vote, minimum wage, child labor and overtime laws, the end of legal segregation, gay marriage—these are all milestones in the American pursuit of liberty and equal opportunity. But Winkler’s conclusion in We the Corporations is that over the course of time, corporations have won more constitutional rights than have individuals. And every win for corporations is a win for property over people. Remember, we live by the Constitution, not the Declaration. Our right to pursue happiness—enshrined by the Declaration of Independence—exists, but it’s not as strong or as meaningful as the rights of a corporation to pursue profit for the rich folk who own it.