WSJ gives a very comprehensive review of the trade war

https://www.wsj.com/articles/trade-war-with-china-took-toll-on-u-s-but-not-big-one-11578832381

One of the points is that the US importers, read Americans, paid virtually all the tariffs.

China did not revalue their currency nor did they lower prices.

But all sectors are taking hits. If the first phase of the deal comes true for agriculture we will be right back to where we started 2 years ago.

Touting that as a “win” is really just a lie.

IMHO

12 thoughts on “WSJ gives a very comprehensive review of the trade war

    1. The headline is a bit misleading. The hit was a lot more than it implied. The drivers are low wage jobs in hospitality and healthcare that are keeping us from suffering more. Great, but hard to export.

      It just seems that everything we do are Trumpian impulses, then a crew of supporters have to explain, translate, backtrack, make up stuff or otherwise perform damage control.

      This cartoon by Luckovich says it all:

      https://www.arcamax.com/politics/editorialcartoons/mikeluckovich/s-2313925?print&ezine=261&r=2XKNAhlD6HzUci1CygngTuVL676SjMMJmGZF1TC0o01DOjI5NDc0Njk4MTpKOjE4OTM0NTM6TDoyNjE6UjozNjU0NjE6VjoxNzg

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  1. A few salient points for those who can’t access WSJ:

    “ The American economy might not have been wrecked, nor did it record a banner year. Job growth faltered in manufacturing, and farm sales plunged.
    “China is set to do little more than restore agricultural purchases and offer some nice words on financial services and intellectual property,” said Benn Steil, the director of international economics at the Council on Foreign Relations. “Trump could have had that two years ago without the tariff damage.”

    “ Total investment in the U.S. economy, which includes building structures like new factories or purchasing equipment for those factories, contracted in the second and third quarters of 2019.
    Nancy McLernon, president of the Organization for International Investment, which represents companies making cross-border investments, said international companies in general are more reluctant to invest in the U.S. “That’s bad news, especially when you consider that international companies employ 20 percent of America’s manufacturing workforce and produce 25 percent of all U.S. goods exports.”

    “ In the jobs report released Friday, the Labor Department reported U.S. manufacturers shed 12,000 jobs in December.
    But most Americans work in fields that have nothing to do with the trade war, and U.S. job gains have been driven by industries like professional services, leisure and hospital, as well as health care.”

    “ But instead of the economy being strong enough for rate increases, as the trade war wore on, the administration began imploring the Fed to slash interest rates to bolster the economy. The Fed cut rates three times. Even so, the economy has cooled toward 2%. Though a stumble, it remains far from a recession.”

    At best, the jury is out. Yet one has to wonder how much more effective we could have been as the linchpin in TPP with regards to effectively challenging China’s policies.

    Liked by 2 people

    1. You always take losses in a war, and certainly, the longer this goes on the more it will cost, but we are in good shape to carry the burden now. Would it be better to wait until our economy is weak to try to bring China to the bargaining table?

      Intellectual property and research are of increasing value in the future, how long could we afford to let China just steal those things before we got tough with them?

      The point of the tariffs was not to get money form the Chinese, it was to resolve those issues. Whether Trump will succeed or not is uncertain, but prior administrations just kicked the can down the road while the Chinese bled our technology and expertise dry.

      All TPP did was to let China play the other participants against us, they did absolutely nothing to rein in China’s abuses and even profited by them.

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      1. So far it looks as if the trade war is not going to provide any impetus for China to reign in its policies on doing business in that country.

        As far as TPP we never let it get off the ground. Trump labeled it “Obama” and pulled out.

        Conducting bilateral trade agreements with every nation is counterproductive in a global economy.
        We get car parts from dozens of nations and what kind of long range planning can a manufacturer count on when every Tom, Dick and Harry has different rules? Add to that the plants that are foreign owned in the US that also provide material.

        Our own founders realized that at the state level when drafting the Constitution and allowed Congress to regulated interstate commerce so the rules were the same from state to state.

        Liked by 1 person

    2. RE: “But all sectors are taking hits.”

      Read your own source more carefully: “despite the damage to these trade-related sectors, most of the U.S. economy sailed through two turbulent years of trade war with China with barely a scratch, a review of key economic indicators shows.”

      One clear win the article mentions is the $60 billion dollar reduction in the trade deficit in the 12 months ending in November. That’s $60 billion dollars that remained in the American economy for Americans to use.

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      1. I did read it. The damage to the trade related sectors was significant, but our domestic economic sectors like health care and hospitality kept humming.

        And I pointed that out.

        Again, I don’t believe the trade imbalance means anything significant. Every dollar we save by importing goods that can be made for less overseas are dollars we can spend here at home. Plus in encourages investment in the American economy by the rest of the world.

        Liked by 1 person

      2. RE: “Every dollar we save by importing goods that can be made for less overseas are dollars we can spend here at home.”

        Every dollar we spend buying the imports is a dollar we no longer can spend at home.

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    3. RE: “All TPP did was to let China play the other participants against us, they did absolutely nothing to rein in China’s abuses and even profited by them.”

      Exactly. The only benefits of TPP are theoretical. Theoretically, we and the other nations could gang up on China, but by the same token China and the other nations could gang up on us.

      You’re also right that Trump’s ultimate success in trade negotiations remains to be seen. I’m OK with that because I think a portfolio of bilateral agreements represents a better approach to managing our national trade interests.

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      1. “I think a portfolio of bilateral agreements represents a better approach to managing our national trade interests.”

        The founders put interstate commerce under Congressional duties. Why? Because different rules, tariffs, politics for each state would be counterproductive.

        The same applies to 190 bilateral trade agreements.

        Liked by 1 person

      2. RE: “The same applies to 190 bilateral trade agreements.”

        Bad analogy. We don’t regulate other countries’ economies. We only trade with them.

        Like

        1. Good analogy.

          We don’t want to regulate other nations’ economies.

          But the interstate commerce clause was to regulate, or standardize, trade among the states. This allows the market to determine prices. Not what France pays for cotton from Egypt versus what we pay based on tariffs or other barriers.

          And when we talk about dozens of suppliers from dozens of countries for just the auto industry, never mind the foreign owned companies in our own borders which provided a huge number of good paying jobs it becomes almost impossible to plan long range.

          Liked by 1 person

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