So, Paul Krugman calls a former president a “chump” because China rolled him and Trump calls Krugman names and attacks the New York Times. Trump is so over the top with his emotional rage that he forgot to say anything about the China deal. In effect, admitting that China did get the best of him.
Oh, and to the extent that Trump wants everyone to believe that there was never anything to “Russia, Russia, Russia.” see the Republican Senate Intelligence report, in which it states that Paul Manafort handed critical campaign intelligence directly to someone with known Kremlin associations.
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The smarter move would have been to keep the United States in the Trans-Pacific Partnership, the big trade deal with other nations in the Pacific, including Vietnam, Singapore, Canada, Australia and Chile. The whole purpose of the TPP was to boost trade among other nations and lessen reliance on China, which was excluded from the deal. But Mr. Trump pulled out of the TPP in his first week in office, and other nations went ahead and completed the trade pact on their own. In an ironic twist, China is now petitioning to join.
It’s true that the pandemic didn’t help. The destruction of business travel, tourism and students studying abroad helped fuel a big decline in U.S. services exports to China. Some of the few U.S. industries to see exports to China rise significantly in the past two years were covid-19-related products, semiconductors, liquefied natural gas, corn, wheat, pork and sorghum. In the meantime, U.S. purchases on Chinese goods jumped last year as Americans spent heavily on home remodeling and home entertainment. Overall, 2021 was a record for the U.S. trade deficit, though that is largely a reflection of the strong economic rebound.
The United States has just learned costly lessons about the futility of trade wars and how China can’t be trusted to honor its deals. Now the Biden administration has to figure out how to hold Beijing to account for failing to fulfill its commitments. One conclusion ought to be clear: More tariffs are not the answer.
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Do you remember Donald Trump’s trade war? You can be forgiven for having forgotten all about it, given everything that has happened since; it sounds trivial compared with his effort to stay in power by overturning a fair election. Even in terms of policy while in office, it was far less important than his pandemic denial, and probably less important than his tax cuts or his sabotage of health care.
But the trade war was uniquely Trumpian. His other policy actions were standard-issue Republicanism, but the rest of his party didn’t share his obsession with trade deficits; indeed, he probably wouldn’t have been able to do much on that front except for the fact that U.S. law gives presidents enormous discretion when setting tariffs. Only Trump really considered trade deficits an important issue; and he, er, trumpeted what he called a “historic trade deal” under which China agreed to buy an additional $200 billion in U.S. goods and services by the end of 2021.
Now, Chad Bown of the Peterson Institute for International Economics, who has been the go-to source on the trade war from the beginning, has a final assessment of that deal. And it turns out to have been a complete flop: “China bought none of the additional $200 billion of exports Trump’s deal had promised.”
So Trump was a chump; the Chinese took him to the cleaners. But if you want to do a post-mortem on the trade war, Trump’s haplessness in dealing with foreign leaders is actually a minor part of the story. Far more important is the fact that the shocks we’ve been experiencing since the pandemic began make the Trumpian view of trade look even more economically foolish than it did when he took office.
www.nytimes.com/...