Will Republicans come to their senses before the asshat in chief
completely destroys our power and security?
<http://telegraph.co.uk>
This is one of America's most shocking economic defeats in 40 years
Ambrose Evans-Pritchard
Donald Trump has achieved his first global peace deal. China, Japan and
South Korea have kissed and made up after years of trade quarrels. They
have pledged to deepen ties and reorganise the Asian and global trading systems under what amounts to Chinese leadership.
The picture blazoned across Asia's front pages – though barely registering in the US – showed the trade ministers of the three economic powers
holding hands in a collective gesture of Asian defiance.
It is one of the most striking economic defeats suffered by America that I have witnessed in more than 40 years covering international affairs.
Trump's "liberation day" cuts two ways.
They agreed to forge ahead with free trade agreements but also to flesh
out the Regional Comprehensive Economic Partnership (RCEP), the world's largest trade pact on paper and a venture viewed by US hardliners as a
Trojan horse for Chinese commercial hegemony.
"For all intents and purposes, the US is now a rogue nation when it comes
to trade," said Michael Gasiorek, the director of the UK Trade Policy Observatory at the University of Sussex.
"I don't think there is a global trade war going on. The US is fighting a trade war with everybody but the others are keen to co-operate even more."
China has launched a charm offensive to woo European officials and
companies, to the point of inviting the heads of Mercedes and BMW to meet
Xi Jinping.
EU trade commissioner Maros Sefcovic has been on a recce mission to
Beijing to explore a Sino-European truce to reorder global trade.
This was unthinkable just weeks ago, when the Commission's mantra was "derisking" the supply chain, and the two sides were daggers drawn over EU tariffs on electric vehicles.
China is still smarting over the EU's sweeping investigations into Chinese technology theft and predatory investments. The EU is still smarting over
the tsunami of Chinese exports flooding its market, which has pushed
China's structural trade surplus with Europe above €300bn (£250bn).
But they both have a bigger wolf to contend with today.
He Lifeng, China's vice-premier, said the two economic blocs should team
up to defend themselves against Trump's assault on the global trading
order.
"China is willing to work with the EU to handle economic differences in
the proper manner," he said.
The Trumpian trade era is fundamentally different from the early 1930s because a) the world was then far less integrated (trade was just 2pc of
US GDP) and it retreated further into protectionist blocs or semi-autarky after the US Congress passed the Smoot-Hawley tariff act; and b) the
Federal Reserve made matters infinitely worse by forcing a 25pc
contraction of the US money supply and pushing everybody into
debt-deflation via the interwar gold standard.
Over that decade Canada, India and (loosely) Scandinavia joined Britain behind the wall of Imperial Preference. Germany put a cloak over Mitteleuropa. The Japanese formed a trade bloc based on occupied Korea, Taiwan, Manchuria and North China.
This time the stronger reflex is to try to save open trade in 80pc of the world economy, leaving the US to stew in its own absurdities.
Trump's tariffs are, of course, unconstitutional. Article I of the Constitution gives Congress exclusive power "to lay and collect taxes, duties, imposts and excises," and for good reason.
The drafters feared a drift towards monarchy if the president had an independent source of revenue, as Charles I had sought to do by stretching and abusing the "wartime emergency" justification for raising Ship Money
in the 1630s.
Congress has delegated certain tariff powers to the White House in various acts, mostly in the 1970s, but only for limited purposes. Trump has abused these in exactly the same way as the Stuarts by claiming, yes,
emergencies, such as the fiction of fentanyl and migrants from Canada.
The data actually show that the US is itself a net exporter of fentanyl, migrants and illegal firearms to boot across the Canadian border.
A few Republicans are grumbling. Congressman Don Bacon said last week that Capitol Hill had "made a mistake" by giving presidents too much scope to raise tariffs.
"We have the power of the purse, and I think we should restore these authorities back to the House," he said.
Good for him, but don't hold your breath waiting for common sense
Republicans to face down the intimidation of the Trump-Musk-Maga machine.
Nor do I expect restraint from the Supreme Court, itself now in thrall to
the Bonapartist cult of unitary executive theory.
We will learn on Wednesday whether "liberation day" tariffs cover "all countries" as Trump says when he is in a bad mood rather than just a
"dirty 15" with big trade surpluses suggested by treasury secretary Scott Bessent, which might spare Britain the worst.
Trump's trade guru Peter Navarro says the plan will raise $6 trillion
(£4.6 trillion) in tariff taxes – he calls it revenue – over the next decade, which is a revealing claim.
If it is to raise $600bn a year it will be a contractionary macroeconomic shock of 2pc of GDP, unless offset immediately by tax cuts.
It will lead to Nixonian stagflation, inviting Nixonian price controls as
the next logical step, to prevent an inflationary psychology taking hold
in the manner of the late 1970s, especially since Trump will almost
certainly try to bully the Fed into accommodating his economic
adventurism.
Navarro is telling us that import substitution with US-made wares will
fail, and that foreign companies will not in fact relocate their factories
to the US on a large scale.
Navarro is also telling us that Trump's tariffs are not bargaining
leverage to force free trade reciprocity. They are an end in themselves, a revenue source harking back to the McKinley Tariff of 1890, which a wiser President William McKinley later regretted.
The average rate of US tariffs was around 2.5pc last year. JP Morgan
expects it to jump around 20 percentage points, pushing the risk of a
global recession to 40pc this year. Goldman Sachs says the total effective tariff on European imports could rise to 36pc if Trump goes for the
jugular over VAT.
This will force serious retaliation even from Commissioner Sefcovic – pedantically uncompromising with apostate Britain, but a pussy cat when
faced with a bigger bully – and that will set in motion a tit-for-tat spiral as Trump asserts his pathological need for "escalation dominance".
He has already warned his victims not to talk to each other. "If the
European Union works with Canada in order to do economic harm to the USA, large scale tariffs, far larger than currently planned, will be placed on them both," he posted on Truth Social.
But talk they will, because the world cannot put up with this wolf warrior behaviour any longer, and they will retaliate until the temple comes down
on Trump's head as well as their own. Where does the Trump "put" lie?
The S&P 500 at 5,000, gold at $3,500, Bitcoin at $50 or Tesla heading for bankruptcy? Let's test it, shall we?
On Fri, 4 Apr 2025 10:47:12 -0400, Bi-valve Mollusk wrote:
The defeat happened long ago when countries like China were allowed to
charge the U.S. 67% on imports
We know you're lying. There was an outcry in the nineties when
Clinton wanted to give China most favored nation trading status.
On 4/4/2025 12:32 PM, Governor Swill wrote:
On Fri, 4 Apr 2025 10:47:12 -0400, Bi-valve Mollusk wrote:
The defeat happened long ago when countries like China were allowed to
charge the U.S. 67% on imports
We know you're lying. There was an outcry in the nineties when
Clinton wanted to give China most favored nation trading status.
What lie?
Also note that the lowest point was 8.0%, back in 2018. This was
the rate prior to Trump having a hissy fit during his first POTUS
term and starting all of this, to which China has simply been
responding.
FYI, do note that the tariff rates that Trump had on his poster
yesterday are flat-out wrong: thy were wrongfully based on trade
imbalance values, not tariff rates.
Better an island of non-inhabitants is taxed, to no effect - that
is it hurts no one, than China/Canada/Belgium get by without
tariffs IMHO.
On Fri, 04 Apr 2025 17:51:38 -0700, Siri Cruz <chine.bleu@yahoo.com>
wrote:
I note the Magoos are saying other countries tariff US product
and that justifies 200% tariffs on all other countries. Trivial
tariffs are not worth burning down the world.
These are not reciprocal nor retaliatory tariffs. This has
nothing to do with tariffs. These are whiney slap fights of
dweebs who excel at manufacturing victimisation.
Balance of trade is not tariffs. It is about ability to compete
in markets. Perhaps we could use someone who has masterred the
Fart of the Deal to gather countries and negotiate some kind of
general agreement on trade, tariffs, and artificial restrictions
on markets; this could open all kinds of foreign markets to US
producers. The producers have larger profits to pay higher taxes.
Trump doesn't know what he's doing. Pundits are trying to find some
clever idea in his game but nothing fits. Who's going to build a
plant in the US? It's more expensive now since tariffs on Chinese
steel. And who would be willing to try when everybody knows Trump is
just as likely to change his mind tomorrow?
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