Two experts raise concern over US treatment of allies and tariffs

I watched two separate interviews, one last week on PBS Newshour with a representative of the Council on Foreign Relations and one this morning on CBS Morning News with Ian Bremmer, the head of The Eurasia Group. I felt they both framed the issues and concerns very neatly.

The former noted while Trump has accurately raised concern over China and their pilfering of intellectual capital and trade deficits, he does not have a coherent strategy. It was noted that his tactics are less than effective, especially since this issue affects our G7 allies. It would be far better to work in tandem with our allies to put pressure on China, rather than place tariffs on them as well. He also noted the World Trade Organization has several levers that could be deployed to help with this effort.

As for the lack of coherence, Trump rightfully noted the intellectual capital is the greater concern, but said if China bought more goods from the US, that would be enough. If your biggest issue is theft of intellectual capital, buying more goods does not address that issue.

As for Bremmer, he has interviewed representatives of the G7 who attended the less than fruitful summit in Canada. He said the other members outside of the US all noted the relationship with the US is very far from the “10” that Trump assigned to it. He noted that between Merkel and Trump, it is about as dysfunctional as it gets. He added that other G7 countries worry that Trump has fewer reasonable voices advising him, so there is no one to reach out to that will get in the President’s ear.

What will come out as the Starburst Outburst, after the famous picture with leaders imploring Trump, he stood and agreed to sign a cooperation agreement that staff worked on until 3 am, including Larry Kudlow of the US. Then he reached into his pocket and grabbed two Starburst candies and threw them on the table saying “Angela, don’t say I never gave you anything.” This is about as demeaning as it gets, rivaling his refusal to shake her hand in the oval office.

The picture will be in future history books as a milepost of when the US turned its back on its allies. It will be in the section entitled “When the US ceded its global leadership position.” It is compilation of things that make me say this, not just the ill-advised tariffs.

They include: pulling out of an Asia-Pacific trade deal that went through without the US, announcing the pull out of the Paris Climate Change Accord, ignoring the pleas of allies to pull out of the Iran nuclear deal, pulling out of the United Nations Human Rights council, separating children from parents at the border and adding more demands after a NAFTA deal was crafted. Then, there is the bullying, lying to and lying about our allies. Shoving the Macedonia President out of the way is as good a metaphor as any.

The United States is becoming a pariah under Trump. Until the so-called Republican leaders acknowledge this, we will continue to be such. How low must we go?

 

Please contact your Senators to support the Corker Tariff Bill

Senator Bob Corker (R) has posed a bill to assume Congressional governance over tariffs the President is imposing on allies as a matter of national security. Ironically, harming our relationships with allies makes us less safer, not more. It also makes us untrustworthy.

If you agree with Senator Corker, I encourage you to send a letter to your Senator and Congressperson. Here is a sample to modify as you see fit.

“Senator (or Congressperson), please support Senator Corker’s efforts to have Congress govern all tariffs. My long time fear that our President would cede our global leadership role is coming to fruition. Considering the introduction of tariffs on China is understandable, but doing so brazenly on our allies is just poor form. The tariffs, if not altered, will back fire on the US, but the worst part is we have made the US less trustworthy and unreliable.

Please rein in this President who has oversimplified and misused data to strong arm our friends. His belligerence is not helpful and demeans the office he holds. He also fails to consider the number of foreign companies who make things here – BMW, Doosan, Nissan, Mercedes, Hyundai, Toyota, Michelin, Fiat-Chrysler, Husqvarna, etc. Two of these companies are German, two are South Korean, two are Japanese, one is French, one is Italian and one is Swedish. This is what a global economy looks like.

We have trade deficits as we are a consumer economy moreso than others. Plus, the President is not factoring in the investments made in US Treasuries and buying of services. While he cited a deficit with Canada, we actually have a surplus, with these factored in.

Thanks for your consideration.”

 

Local conservative radio host changes label

Earlier this week, a local conservative radio host penned an editorial in The Charlotte Observer called “It’s time to change my label.” Keith Larson joined the ranks of other conservative voices in denouncing the President.

Before he cites his reasons, Larson paints a picture of what he believes. In short, he says his conservatism is grounded in “prudence and decency.” He goes on to say:

“There have been glaring holes in the gown of conservatism over the years, but the Trump Era has made it unwearable.

He has outspent Obama, continued costly and deadly deployments, threatened federal authority over states and cities, started trade wars with adversaries and allies, and attacked the Justice Department and FBI in ways Nixon never dreamed.

There has been a tax cut, Supreme Court pick, and talking up God. He knows how to pander.

Then there’s Stormy. Not merely the affair but the payoff. Not merely the payoff but the lying. And so many other women and lies.

This President has a habit of lying, and being a misogynistic slime ball and just plain toad. There is nothing prudent or decent about the man.”

These words speak for themselves. I cannot bring myself to disagree with any of his sentiments. He adds his voice to other national pundits with names like Erickson, Gerson, Will, Brooks, Peters, and Douthat.

I hope people heed his advice. America needs them to.

The unraveling accelerates

The finance ministers of the G7 met in British Columbia last week and gave the US Secretary of the Treasury, Steve Mnuchin, an earful. They told him the US is forsaking its global economic leadership.

Not only are we treating our allies and trading partners poorly, the chaotic style of the US President has worn thin. Depending on which fractious voice is in favor on a given day, the President is routinely changing his mind. This quote from Hua Chunying, the Chinese Foreign Minister, which was reported by The New York Times, is telling:

“In international relations, every time you change your face and turn your back is another loss and squandering of your country’s credibility.”

In the same article, an anonymous European official noted the short-sighted nature of the President and his Commerce Secretary Wilbur Ross, who are looking for “photo opportunities at American steel factories.”

The official noted “European negotiators regard that stance as an unsophisticated, zero-sum view of trade, in which one country that sells more goods to its partner is the winner – an outlook that makes a trade deal difficult to achieve.”

There is a sadness in reading these words. Many have seen this retrenchment tactic as troubling. Conservative pundit David Brooks called the tariffs on allies as “ruinous” on PBS Newshour. On the same show, more liberal pundit Mark Shields called them “reckless.” Shields added that Trump has tended to not respect relationships and views the world as “me and the enemies.”

Zero-sum transactional thinking is a narrow minded view. In global trade, the deal must be fair to stand the test of time. Of course, any deal must be reevaluated over time, but it must be done out of mutual respect. In Trump’s view on anything, he must defeat the other. That is not conducive to building a relationship.

 

 

Media please focus on the big issues

With a man occupying the White House who has hard time with truth, civility, history and criticism, there is a bounty of things the media could focus on. And, that is part of the problem. I look at various news feeds and sources and see too many pedestrian foibles that get discussed. Yet, the countless criticisms dull our focus on the more important issues.

My concerns are several, so let me highlight those areas:

– we are borrowing from our future to make a long performing economy a little better, doing the opposite of what is needed to limit our debt from increasing from $21 to $33 trillion by 2027.
– we have ignored our allies and reasonable voices in the US to pull out of various multiparty agreements hurting trade, environment and security.
– we have pulled back several regulations making it easier for industries to pollute and ignoring the federal government’s role in fighting climate change.
– we have blamed immigration for a host of problems and focus on remedies that won’t help people or solve problems.
– we have held up the constitution as sacrosanct, while ignoring the sections on protecting the rights of all citizens, protecting the right and importance of the media and ignoring the clearly defined roles of the three branches of government. It is of vital importance to respect the judiciary’s pursuit of truth, even if the President does not like it.
– we have continued down a path which ignores truths and facts tolerating a man who makes more than a few decisions off misinformation and even disinformation. Governing well is hard enough when we use real facts, it is nigh impossible when we make things up.

Of course, there are other issues, but I attempted to group several concerns into larger categories. In closing, please remember these three cautions – we cannot shrink to greatness, we cannot continue to pee in our global swimming pool, and we must respect the rights and opinions of all people, not just people who agree with you or compliment you.

Thoughts for Thursday

Here are a few random thoughts on a rainy Thursday, with more rain to come in the days ahead.

A retired ambassador said recently, the US strength is more than its military, it is its relationships with allies. What concerns me is we are devaluing our allied relationships. This is echoed by the European Union Chairman Dean Tusk. Tusk said the EU must be more united than ever before to deal with what he called Trump’s “capricious assertiveness”. My question is this how we want to be viewed by our friends?

Another retired ambassador to Israel said while he agreed with the move of the US embassy to Jerusalem, the US administration made two mistakes. It should have been announced in the context of moving toward a two state solution. In essence, the US placed little obligation on Israel for this move. Also, celebrating the opening on the anniversary of Israel is an insult to Palestinians. This date is not viewed favorably, so the celebration rubbed salt in a wound.

Assuming the role of ambassador for the disenfranchised in the US, a huge opportunity missed occurred during the rushed tax bill which hugely favored companies and the wealthy. I favored some relief on the corporate tax rate, but we went way too far and are negatively impacting our huge and growing debt. The additional opportunity missed I am referencing is not imposing a requirement on companies to provide raises. One way of doing this would have been a concurrent increase in the US minimum wage moving it from $7.25 to a living wage of above $10 per hour. Token one-time bonuses are actually the barest minimum of what could be done with an annual tax break – how about a raise instead? More income to people in need is accretive to the economy.

Finally, I have seen footage of conservative news sources highlighting Venezuela’s problems as an indictment of socialism. While I am a capitalist, I also recognize our country is a mixture of both. Social Security, Medicare, Medicaid, unemployment benefits, and bankruptcy laws are all forms of socialism. We also have other restrictions to prevent unfettered capitalism. Venezuela’s problems are due to corruption and mismanagement that can be traced even back to the popular Chavez. His successor, Maduro, has shown a level of incompetence that is quite visible to all.

That is all for this Thursday. Please share your thoughts.

Two Western Leaders came to Washington

Last week, the two leaders of the western world met with the US President, who has ceded the US role in the world. Emmanuel Macron, the President of France, and Angela Merkel, the Chancellor of Germany visited with Donald Trump.

Of course, the US has the most powerful military in the world. We’d better as we spend far more than other countries. Yet, with our pulling back on diplomacy and the number of diplomats, with our imposition of tariffs on even our allies, with our retrenching from global agreements and with an unprecedented level of untruthfulness, we have ceded our global leadership role to China, overall, and Germany and France in the western world. And, while the UK remains important and formidable, I am sad to say Brexit will precipitate its decline from these ranks.

Macron and Merkel beseeched the US President to remain in the Iran Nuclear deal signed by seven parties (including the four countries above). As with other issues, Trump does a lot of chest beating without the benefit of being factually accurate. John Oliver of “Last Week Tonight,” does a nice job of defining the terms of the agreement and noting three untruthful things the US President says about it.

And, at least Macron openly requested the US to remain in the Paris Climate Change accord. We know this as Macron was allowed to speak with Congress and did so with an eye to the future and a statesman like flair. Yet, Merkel did not get such an opportunity. It puzzles me why Trump does not like her as his contempt easily shows.

He dotes on Macron, but he looks like he would rather be elsewhere when he is with Merkel. Is he jealous because Putin will actually listen to her? Is he superficial to not like her because she does not have a model’s shape or looks? Or is it her policies of openness to refugees? Or, it may be she is a student of understanding issues and he is not?

Nonetheless, she sees the future in the appropriate light as does Macron. “Narrow-minded nationalism” is something we must guard against Macron said to the US Congress. Global trade and relationships make the world safer.

I firmly believe if Trump remains in office for four years (and God forbid eight years), history will judge this period as when the US gave up its leadership role in the world. And, this happened with others not firing one shot, just a well-orchestrated influence campaign by the Russians who want a weaker west. But, don’t trust my judgement. Pulitzer Prize winning journalist and former State Department official Ronan Farrow has penned a book called “War on Peace” that notes the same premise with definitive examples. The decline in diplomacy is a huge mistake – we sent two people to a global issues meeting, while China sent twenty. They worked the rooms.

This is a sad state of affairs. We have listened to a populist President who does not care to know historical context and is not beholden to the truth. He has listened to people who want us to retrench. And, there is one thing for certain, we cannot shrink to greatness. It matters not what the ball caps say at Trump rallies.

Global Trade and Tariffs

While the US President proceeds with tariffs, 11 countries sans the US just signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that will reduce tariffs among theses countries. This is the infamous TPP that the President pulled out of early in his Presidency.

David Smick, an economic advisor to Presidents Ronald Reagan and Bill Clinton said both Presidents loved global trade. It should be noted that more jobs were created under these two Presidents with Clinton #1 at 22.9 million and Reagan at #3 at 16.1 million (FDR was second). While we need to be mindful of and help employees impacted by job loss, we need to recognize global trade is accretive to the US economy and creates more jobs. We do well when we all do well.

As one global economist said, tariffs and trade wars are how recessions start. So, in protecting some jobs, we will likely be impacting negatively a much greater number.

The biggest global risk to the west

Ian Bremmer, the President of the Eurasia Group and a CBS News Correspondent cited his group’s report on CBS This Morning regarding the greatest global risk. In essence, he said the number one risk is an emergent China filling the void being left by a retrenching US from the global leadership stage. Here is what Bremmer said in the interview about China.

“They  have the strongest leader in Xi Jinping they’ve had at least since Mao [Zedong]. And because the United States is America first, it’s transactional. It’s unilateral. It’s undermining a lot of alliances. You put those things together and suddenly you actually have a China that is willing to engage in what is increasingly a geopolitical vacuum,” Bremmer told “CBS This Morning” on Tuesday.

“In other words, this is the first time we’ve ever seen as U.S. leadership erodes, no one else has been standing up. Now the leader of China is saying we’re prepared to stand up whether it’s on climate or the global economy, you know, regional security, you name it, that’s a big change for the world.”

Bremmer cited an easy example. The US President said he is going to cut funding to Pakistan as they are not doing enough to combat terrorism. The sad truth is it really does not matter that much, as China supports Pakistan more than we do and will step up. I mentioned in a recent post that twice now, Xi Jingping followed the US President at two world events in Davos and Vietnam. The Chinese leader gave the speech the US President usually gives regarding working together globally. Trump spoke of maximizing only American interests.

Not only is this counterproductive, it will actually hurt our share of the global pie making us less relevant.There are two things to note. First, the position that Xi is advocating used to be a foundation of the US Republican Party. The party sold its soul to support the short-sighted and bullying President who gives the illusion of being a populist.

Second, the US cannot shrink to greatness. We are actually doing pretty well as a country and were so when Trump took office. It is the distribution of wealth that is the problem and this President has done very little to resolve that problem. Lessening our global position not only will hurt our economy, it will make us less safe.

If Trump continues in office through one term, this period will be viewed by historians when the US made an unforced error and ceded its global leadership position. This is the exact opposite of what the President should be doing.

 

 

A few painful truths

We are overlooking some very painful truths primarily for short term gain. As I chatted with staff members for several US Senators, I found myself saying “you sound like a young person; you do realize we are leaving this problem for you?” I hope they start thinking more about what I said because of what we are ignoring.

The reason for my question is Congress has passed one Tax bill and is debating another that will increase our $20.5 trillion debt by at least $1.5 trillion. Yet, not only are we ignoring the $20.5 trillion debt, we are ignoring that the Congressional Budget Office projects that figure to grow by $10 trillion without the Tax bill impact. So, in 2027, the debt could be $32 trillion if the Tax bill is signed into law. This is beyond poor stewardship – it is malfeasance. We would be screwing those young staffers I spoke with.

Unfortunately, there is more. Our leadership has decided to make the US the only country in the world to not support the Paris Climate Change Accord. Not only are we denying hard truths and overwhelming scientific evidence, we are shooting ourselves and planet in the foot. Renewable energy is passed the tipping point and we risk getting left behind as other nations invest in Innovation for the new economy. Fortunately, cities, states and businesses are carrying the banner dropped by our leadership, who is being relegated to the kids table at Thanksgiving. At the next post-Paris event, the US may not be invited at all. If we don’t deal more decisively with climate change, we will be screwing those young staffers and their children.

A final issue to mention, but not the final problem we are ignoring, is the US is retrenching from our global leadership role to the delight of China and Russia and chagrin of our western allies. The President gave a speech in Vietnam this month similar to the one made in Davos earlier in the year. America will retrench to a nationalistic country seeking bilateral agreements. On each occasion, his speech was followed by Xi Jingping who gave the global leadership speech the US normally gives. What our President fails to understand is globalization lifts all boats and our economy benefits more than if we look to maximize only our share. This concept has been called the “Nash Equilibrium” in honor of the Nobel Economics prize winner who developed it, John Nash. If we retrench, we will be harming our future growth and screwing those young staffers.

As I mention, these are not the only things we are ignoring – poverty, job losses due to technology advances, healthcare costs, environmental degradation, infrastructure, better gun control, etc. Yet, should we not alter our path set by these leaders, this path will be defined in the future as the period when the US gave up its global leadership role. And, the world will be a lesser place because of it. Sadly, I have witnessed these words spoken by more than a few global financial and security experts.