Getting people to understand tariffs and duties is above my pay grade. I hope this article reaches a few. I worked for a flower importer and the duties imposed on growers were paid by the importer and passed along the food chain until a dozen roses for Valentine’s Day cost a whopping $75.00. But convincing anyone that they did nothing to stop the war on drugs and only fattened the wallets of US Customs ( same people collecting tariffs) was an impossible task.
I was in Canada before the pandemic and the lobstermen we’re saying that because US tariffs made their lobsters too expensive for the US, they were selling most of them to China. Unintended consequences.
To this day, I think that backing out of the Trans-Pacific Partnership was a major unforced error by the US. We lost major geopolitical leverage with China, as well as the ability to isolate and serve as a counterweight to their nefarious, quasi-imperialistic ambitions. Many of the countries that were signatories to it are staunch allies of the US, and unlike China, do respect intellectual property rights and adhere to the word of existential agreements(trade and political treaties) we have with them.
"In the meantime, those of us who are free traders regardless of who inhabits the Oval Office are left without a champion or a party. In case there was any doubt, there is no limited government, free trade party. There are only varying degrees of bad."
I remember back in 1993 when NAFTA was passed by Congress 234-200 in the House and 61-38 in the Senate. There was a healthy spread of free marketeers among both the Republican and Democratic parties. In these links, you see that most Republicans favored NAFTA, and while the number of Democrats who voted no on NAFTA outnumbered the "ayes", it was much closer to a 50-50 split. And this trade agreement was a smashing bipartisan success, and resulted in robust economic growth that lasted throughout most years of Clinton and Bush 43's presidencies, until the subprime collapse in 2008. The funny thing is that the USMCA that former President Trump crowed about, is essentially NAFTA under a different name, save a few minor changes.
"One course would be to look at rejoining the CPATPP, but that that’s probably unlikely given the controversial nature of the trade pact. With the Senate split closely, it would be difficult to get such a treaty ratified. Even though Biden might find some help from the remaining free-trade Republicans who are willing to stand up to the populist protectionists, the Bernie Sanders Democrats could be counted on to oppose the treaty. (Protectionism was just one area where Bernie Sanders and Donald Trump had very similar views.)"
If this was the 1993-1994 Democratic Congress or the "Contract with America" era GOP Congress from 1995 to 2007, there would be more than enough votes for the US to join CPATPP or any other Asian-Pacific trade agreement. The problem with the Senate today, is that there are many GOP Senators who deep down, are free marketeers, but are afraid to run afoul of Trump and the MAGA crowd. I think among them, you'll see no votes for any free trade treaty/agreement from those who are facing reelection in 2022 and 2024. It's unfortunate, but as long as the MAGA base has a stranglehold on the GOP, this is the reality.
Treaties require an affirmative 2/3rds supermajority vote in the Senate for ratification. And we have to remember that even in 1993 with a more free trade friendly Senate, the vote for NAFTA was only 61-38. NAFTA was passed as a Congressional-Executive agreement, which requires only a simple majority in both the House and Senate. I see CPATPP going the way more of a congressional-executive route as opposed to a formal treaty, given that the number of free marketeers in Congress are considerably fewer than in years past.
Someone had to confront China. Trump did and took the heat. I'm sure enough never-Trump pressure will cause Biden to cave and make China even more formidable.
The TPP was intended to confront China as a alliance. Trump stupidly backed out of the TPP and confronted China alone while at the same time confronting most of our other trading partners. It was a dumb strategy that was doomed to fail.
I have been unable to find anything that explains how the TPP would confront China. The alliance would involve maybe 40% of the worlds economy. The USA is already 25%. If Trump's policies were so bad, it seems that indicators such as unemployment or inflation or the stock market or real wage growth would have reflected that.
The problem is that as ineffectual the tariffs against China were, that Trump hamfistedly imposed tariffs against many other countries, including those who are among the strongest allies of the US. Many of the free trade agreements we have with these countries that the previous administration threatened to withdraw from, actually resulted in these countries reducing or eliminating tariffs on US exported goods. In the end, these tariffs did little to nothing to contain China, but did plenty to hurt the purchasing power of the American consumer, which hurts our economy. Even industries that weren't directly impacted by the tariffs are affected to good extent. The reduced purchasing power of consumers as a result of the higher prices resulting from tariffs, means that their ability to buy consumer goods and services from companies not directly affected by tariffs, are limited.
The best way to counter adversaries like China, is to forge stronger economic ties with our allies around the world that are troubled with China's rising geopolitical influence, especially those that are liberal democracies. These economic agreements expanding economic freedom among signatories is what will help us be a geopolitical bulwark against countries like China, that have nefarious intentions. We need more trade agreements with many countries in Asia that are reliable allies of the US, in order to contain China's ambitions.
Very well written and very persuasive. I'm not sure I agree with all of it. Alliances might work in the long run but when our current allies willingly allow themselves to be held hostage for cheaper goods, Germany and Russian gas for example, it all falls apart. We even do it to ourselves by relying on a foreign supply chain for goods we can't even bring ashore and transport. The TPP might have been a benefit to the USA agricultural industry but most likely would have slowed expansion of USA manufacturing. The low threshold for domestic content (45%) within the TPP alliance would not have slowed Chinese commerce or affected their unfair trade practices. How much leverage does an additional 15% of the world's economy add to the USA's bargaining power when there are no curbs on China?
There are also the social equality for women and smaller nations and environmental provisions that accomplish nothing but skimming advantage off the top. The USA would not even be able to change environmental laws to improve productivity in agriculture, mining and manufacturing.
You're right about Senator Cruz, sorry to say. That tweet embarrassed me. Back when he was running in 2016, he was more conscientious about his language and attitude (back when we all thought "evangelical" meant something). Since then, it looks like he realizes that the GOP base, and the MAGA crowd in particular, care more about "owning the libs" than they do about the values they claimed to hold dear. Let's see how his pandering plays out.
I think that many GOP elected members of Congress that behave as do Cruz, probably don't believe half of the stuff they peddle to the MAGA folks. And you are right in that the GOP base cares more about performative behavior such as "owning the libs" and "f&#^ your feelings" than about conservative policies. Plus, if you don't buy into "Stop the Steal" election trutherisms, your chances of winning a GOP primary drops precipitously. This is why we have such a bad incentive structure for Republicans who run for public office.
I supported Cruz for President in 2016, and I think that he has changed quite a bit since then, much of it not for the better. I get that the GOP base demands performatives. But I think that Cruz tries a bit too hard. I think he could've easily made the case that Biden is doing a poor job as President without using Wheel of Fortune memes with the F-bomb.
"The problem there is that the Biden Administration’s diplomatic prowess has so far been decidedly JV-grade."
C'mon man. Why do you feel the need to insult JV teams that way? ;-)
Getting people to understand tariffs and duties is above my pay grade. I hope this article reaches a few. I worked for a flower importer and the duties imposed on growers were paid by the importer and passed along the food chain until a dozen roses for Valentine’s Day cost a whopping $75.00. But convincing anyone that they did nothing to stop the war on drugs and only fattened the wallets of US Customs ( same people collecting tariffs) was an impossible task.
Please feel free to share this article around.
I was in Canada before the pandemic and the lobstermen we’re saying that because US tariffs made their lobsters too expensive for the US, they were selling most of them to China. Unintended consequences.
I shared it immediately. Leading horses to water, trying to figure out how to make them drink. Are there always unintended consequences?
To this day, I think that backing out of the Trans-Pacific Partnership was a major unforced error by the US. We lost major geopolitical leverage with China, as well as the ability to isolate and serve as a counterweight to their nefarious, quasi-imperialistic ambitions. Many of the countries that were signatories to it are staunch allies of the US, and unlike China, do respect intellectual property rights and adhere to the word of existential agreements(trade and political treaties) we have with them.
"In the meantime, those of us who are free traders regardless of who inhabits the Oval Office are left without a champion or a party. In case there was any doubt, there is no limited government, free trade party. There are only varying degrees of bad."
I remember back in 1993 when NAFTA was passed by Congress 234-200 in the House and 61-38 in the Senate. There was a healthy spread of free marketeers among both the Republican and Democratic parties. In these links, you see that most Republicans favored NAFTA, and while the number of Democrats who voted no on NAFTA outnumbered the "ayes", it was much closer to a 50-50 split. And this trade agreement was a smashing bipartisan success, and resulted in robust economic growth that lasted throughout most years of Clinton and Bush 43's presidencies, until the subprime collapse in 2008. The funny thing is that the USMCA that former President Trump crowed about, is essentially NAFTA under a different name, save a few minor changes.
https://www.govtrack.us/congress/votes/103-1993/h575#details
https://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=103&session=1&vote=00395
"One course would be to look at rejoining the CPATPP, but that that’s probably unlikely given the controversial nature of the trade pact. With the Senate split closely, it would be difficult to get such a treaty ratified. Even though Biden might find some help from the remaining free-trade Republicans who are willing to stand up to the populist protectionists, the Bernie Sanders Democrats could be counted on to oppose the treaty. (Protectionism was just one area where Bernie Sanders and Donald Trump had very similar views.)"
If this was the 1993-1994 Democratic Congress or the "Contract with America" era GOP Congress from 1995 to 2007, there would be more than enough votes for the US to join CPATPP or any other Asian-Pacific trade agreement. The problem with the Senate today, is that there are many GOP Senators who deep down, are free marketeers, but are afraid to run afoul of Trump and the MAGA crowd. I think among them, you'll see no votes for any free trade treaty/agreement from those who are facing reelection in 2022 and 2024. It's unfortunate, but as long as the MAGA base has a stranglehold on the GOP, this is the reality.
Treaties require an affirmative 2/3rds supermajority vote in the Senate for ratification. And we have to remember that even in 1993 with a more free trade friendly Senate, the vote for NAFTA was only 61-38. NAFTA was passed as a Congressional-Executive agreement, which requires only a simple majority in both the House and Senate. I see CPATPP going the way more of a congressional-executive route as opposed to a formal treaty, given that the number of free marketeers in Congress are considerably fewer than in years past.
Someone had to confront China. Trump did and took the heat. I'm sure enough never-Trump pressure will cause Biden to cave and make China even more formidable.
https://www.washingtonexaminer.com/opinion/china-has-used-the-21st-centurys-three-defining-crises-to-steal-a-move-on-its-rivals
The TPP was intended to confront China as a alliance. Trump stupidly backed out of the TPP and confronted China alone while at the same time confronting most of our other trading partners. It was a dumb strategy that was doomed to fail.
I have been unable to find anything that explains how the TPP would confront China. The alliance would involve maybe 40% of the worlds economy. The USA is already 25%. If Trump's policies were so bad, it seems that indicators such as unemployment or inflation or the stock market or real wage growth would have reflected that.
The problem is that as ineffectual the tariffs against China were, that Trump hamfistedly imposed tariffs against many other countries, including those who are among the strongest allies of the US. Many of the free trade agreements we have with these countries that the previous administration threatened to withdraw from, actually resulted in these countries reducing or eliminating tariffs on US exported goods. In the end, these tariffs did little to nothing to contain China, but did plenty to hurt the purchasing power of the American consumer, which hurts our economy. Even industries that weren't directly impacted by the tariffs are affected to good extent. The reduced purchasing power of consumers as a result of the higher prices resulting from tariffs, means that their ability to buy consumer goods and services from companies not directly affected by tariffs, are limited.
The best way to counter adversaries like China, is to forge stronger economic ties with our allies around the world that are troubled with China's rising geopolitical influence, especially those that are liberal democracies. These economic agreements expanding economic freedom among signatories is what will help us be a geopolitical bulwark against countries like China, that have nefarious intentions. We need more trade agreements with many countries in Asia that are reliable allies of the US, in order to contain China's ambitions.
https://www.aeaweb.org/research/washing-machines-2018-tariffs-effect
Very well written and very persuasive. I'm not sure I agree with all of it. Alliances might work in the long run but when our current allies willingly allow themselves to be held hostage for cheaper goods, Germany and Russian gas for example, it all falls apart. We even do it to ourselves by relying on a foreign supply chain for goods we can't even bring ashore and transport. The TPP might have been a benefit to the USA agricultural industry but most likely would have slowed expansion of USA manufacturing. The low threshold for domestic content (45%) within the TPP alliance would not have slowed Chinese commerce or affected their unfair trade practices. How much leverage does an additional 15% of the world's economy add to the USA's bargaining power when there are no curbs on China?
There are also the social equality for women and smaller nations and environmental provisions that accomplish nothing but skimming advantage off the top. The USA would not even be able to change environmental laws to improve productivity in agriculture, mining and manufacturing.
You're right about Senator Cruz, sorry to say. That tweet embarrassed me. Back when he was running in 2016, he was more conscientious about his language and attitude (back when we all thought "evangelical" meant something). Since then, it looks like he realizes that the GOP base, and the MAGA crowd in particular, care more about "owning the libs" than they do about the values they claimed to hold dear. Let's see how his pandering plays out.
I think that many GOP elected members of Congress that behave as do Cruz, probably don't believe half of the stuff they peddle to the MAGA folks. And you are right in that the GOP base cares more about performative behavior such as "owning the libs" and "f&#^ your feelings" than about conservative policies. Plus, if you don't buy into "Stop the Steal" election trutherisms, your chances of winning a GOP primary drops precipitously. This is why we have such a bad incentive structure for Republicans who run for public office.
I supported Cruz for President in 2016, and I think that he has changed quite a bit since then, much of it not for the better. I get that the GOP base demands performatives. But I think that Cruz tries a bit too hard. I think he could've easily made the case that Biden is doing a poor job as President without using Wheel of Fortune memes with the F-bomb.