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?

 

Trump is gaslighting the public

Courtesy of our blogging friend Gronda, I was reading several tweets from Nobel Laureate Economist Paul Krugman. He called on the carpet the media for not condemning the US President for blaming his most recent tirade on the Canadian Prime Minister. In his tweets, Krugman used the term “gaslighting.”

This term set the bells off in my mind. For those not familiar with the term, it comes from the movie “Gaslight,” where a man who turns out to be the antagonist has been tricking the female homeowner to believe that she is crazy, as he tries to steal some rare jewels in her attic. To convince someone of something not real became known as “gaslighting.”

This term is so appropriate to define the modus operandi of the US President. He oversimplifies the cause of problems or invents nonexistent ones playing off people’s fears. He misinforms or disinforms to gaslight people into believing a simple solution is the answer.

The US is a consumer economy moreso than other places (we buy more stuff), which is why we run trade deficits, eg. Yet, he tells only part of the story because when investments and services are counted, we actually have a trade surplus with Canada. But, the President said….

Certain pockets of America have retrenched, but it is not only due immigration. In fact, it is mostly due to technology and companies searching for cheaper labor by moving plants oversees. We produce much much than we used to with much fewer people. Immigration is actually accretive to the economy making it larger. Should we be smarter about our immigration issues – of course – but let’s have reasonable conversation about what is wanted and needed. Let’s not gaslight people into demonizing others.

And, if you don’t like gaslighting, I have another term that defines the President – he is a spoiled brat.

 

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.