Making News: John Batchelor Podcast On-Line…& More!


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I’m pleased to announce that the podcast is on-line of my Thursday night interview on John Batchelor’s nationally syndicated radio show. In case you missed it live, click here to listen to a fascinating discussion among John, co-host Gordon G. Chang, and me, about the Trump administration’s recent decision to prevent semiconductor manufacturer Broadcom from taking over fellow chip-maker Qualcomm.

Also that day, I was quoted in this post on the President’s controversial claim that the United States currently runs a trade deficit with Canada.

In addition, on March 12, I was interviewed at length on the Voice of America (VOA) about President Trump’s China trade policy. Since the segment was broadcast on one of VOA’s Chinese-language TV channels, you’ll be hearing a simultaneous translation of my remarks with my own English version only somewhat audible in the background. But although it’s nearly impossible for a non-Chinese speaker to know what’s going on, here, for the record, is the link. My segment begins just before the 23-minute mark.

Finally, on March 6, re-ran my recent RealityChek post on naive (or disingenuous?) claims that there’s lots of free trade in the world steel market. Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.



(What’s Left of) Our Economy: A Strong February for U.S. Manufacturing Production – but Big Revisions May be Coming


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Thanks to an unexpectedly crowded Friday, I wasn’t able to put out a report on yesterday’s Federal Reserve real manufacturing output figures – for February. Which is really a shame, because they signaled a noteworthy reversal to the recent slowdown in manufacturing output. In addition, the American automotive sector – which had led domestic manufacturing’s strong early recovery from its deep recessionary slide – emerged from its latest technical recession.

Two important caveats, though: First, revisions weren’t great, to say the least, so part of February’s strong performance reflected a January that was even weaker than previously reported. Second, next week, the Fed will be putting out its latest annual revisions, which will give us entirely new numbers dating back to 2016. And sometimes these updated figures change the picture significantly.

But now to the manufacturing highlights of yesterday’s intriguing good news/less good news Federal Reserve industrial production report:

>According to the Federal Reserve, after-inflation U.S. manufacturing output jumped by 1.27 perceet month-to-month in February – its best such performance since October’s 1.29 percent, which was boosted by a bounceback effect from last fall’s hurricanes. Taking October out of the picture, the February monthly rise was the biggest since last April’s 1.37 percent.

>At the same time, January’s meager 0.08 percent sequential uptick was downgraded to a 0.18 percent dip, and although December’s downwardly revised monthly dip is now judged to have been a 0.04 percent advance, November and October growth figures were lowered as well.

>Year-on-year, manufacturing grew in February by 2.57 percent – the fastest annual pace since July, 2014’s 2.82 percent. By contrast, between the previous Februarys, manufacturing’s price-adjusted output increased by only 1.13 percent.

>Due to the monthly revisions, full-year 2017’s real manufacturing output growth fell to 2.33 percent. But that still resulted in industry’s best year by this measure since 2012’s 2.58 percent.

>Moreover, February’s monthly growth was torrid enough to bring domestic industry to within 1.49 percent of its last constant dollar production peak – hit at the end of 2007, on the eve of the Great Recession.

>Manufacturing’s February performance was led by the durable goods super-sector, whose after-inflation production advanced by 1.78 percent on month. This growth was the fastest since February, 2014’s 1.80 percent, which was helped by a harsh winter rebound effect.

>Yet January’s sequential production change number for durable goods received a significant downgrade, too – from a 0.15 percent increase to a 0.38 percent decrease. The cumulative December and November revisions were slightly negative as well.

>Due largely to the downward January revisions, the month’s reported annual durable goods manufacturing increase was reduced from 2.47 percent to 1.74 percent – the lowest such figure since last August’s 0.95 percent.

>But February’s annual durable goods real production increase of 3.46 percent was the best monthly performance since January, 2015’s 3.50 percent – which also stemmed partly from a winter weather bounceback.

>The downward December revisions, moreover, reduced durable goods’ full-year, 2017 inflation-adjusted growth to 2.41 percent – a figure that is still a post-2014 (2.72 percent) high.

>For the smaller non-durable goods super-sector, constant dollar production rose by 0.71 percent on month in February– its best such growth since the 2.34 percent burst in hurricane-affected October.

>Omitting the October performance still shows that February’s after-inflation non-durable goods growth was its strongest since last April’s 0.96 percent.

>Further, in the non-durables sector, revisions were slightly positive.

>On a year-on-year basis, real non-durable goods output improved by 2.18 percent in February. And for full-year, 2017, the positive monthly revisions pushed after-inflation output production up to 2.25 percent – the best such result since 2004’s 3.95 percent.

>The star February performer in manufacturing, was the automotive sector – whose sequential real output shot up by 3.88 percent, to an all-time high.

>That monthly performance was automotive’s best since last April’s 4.16 percent growth jump, and pulled the sector out of a real output technical recession that dates from that month.

>Interestingly, though, automotive’s initially reported 0.58 percent January sequential real output advance was revised down to a 0.22 percent drop, and December’s initially reported 1.13 percent inflation-adjusted production improvement was reduced to a 0.88 percent increase.

Im-Politic: The Foreign Governments Funding Think Tank Experts on Trump Tariffs


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With the announcement of the Trump tariffs on steel and aluminum – and the prospect of more trade curbs to come – the news organizations on which Americans rely for accurate and impartial information have understandably turned to private sector specialists for facts and analysis.

What’s much less understandable is that many of these specialists work at Washington, D.C.-headquartered think tanks that receive significant funding from foreign governments – many of whose economies will be profoundly affected by any major changes in U.S. trade policy. Even worse, the press coverage of the Trump tariffs has consistently failed even to mention these conflicts of interest – even though some news outlets have reported on the subject in considerable detail.

To give you an idea of how widespread these conflicts are, here’s a list of the foreign government donors for three major think tanks, drawn directly from their websites, and some figures indicating the often major sums these governments (including groups they fund) have contributed to these organizations’ budgets for the most recent data year available:


The Brookings Institution, 2016-17:

$1 million – $1.999999 million

Government of Norway:


Australian Government, Department of Foreign Affairs & Trade

United Arab Emirates


The Japan Foundation Center for Global Partnership

Japan International Cooperation Agency

Taipei Economic and Cultural Representative Office in the United States


Australian Government, Department of Industry, Innovation, & Science


Government of Denmark

European Recovery Program, German Federal Ministry of Economic Affairs and Energy

European Union

Government of Finland

Korea International Trade Association

CAF-Development Bank of Latin America

Department for International Development, United Kingdom

Embassy of France

Japan Bank for International Cooperation

Temasek Holdings

The Korea Foundation

Korea Institute for Defense Analysis

Embassy of the Kingdom of the Netherlands


Peterson Institute for International Economics, 2016


Korea Institute for International Economic Policy

Swiss National Bank

Up to $24,999

Central Bank of China, Taipei

European Parliament

Japan Bank for International Cooperation

Korea Development Institute

Korea International Trade Association

Embassy of Liechtenstein

Monetary Authority of Singapore


Center for Strategic and International Studies 2016-17

$500,000 and up




Academy of Korean Studies

Korea Foundation




South Korea







The Netherlands

United Kingdom

Japan Foundation Center for Global Partnership

European Development Finance Institutions

Norwegian Institute of Defence Studies

Norwegian Institute of International Affairs

Shanghai Institutes for International Studies

Taiwan Foundation for Democracy


As I’ve written before, even analysts whose paychecks are wholly or partly written by foreign governments (or other special interests, like offshoring-happy multinational companies) can provide valuable insights.  They also have every right to weigh in on any policy debate they choose.  But unless you believe we don’t live in a world in which money talks, and that this goes double in a national capital, it’s clear that news consumers have an equally important right to know the source of the money behind the views they’re reading about – and that the media is letting its readers, viewers, and listeners down when this information is kept concealed.   



Making News: A New Op-Ed, National Radio Tonight…& More!


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I’m pleased to announce that a new op-ed of mine was published yesterday – a post on the website of the foreign policy journal The National Interest on some of the more fundamental issues raised by the Trump administration’s tariffs on steel and aluminum imports. Click here to read my argument that the uproar over the levies reveals a major disagreement tension between the ideal of free trade and the ideal of free markets.

In addition, I’m scheduled to reappear on John Batchelor’s nationally syndicated radio show tonight on the Trump administration’s decision to block a foreign takeover of the U.S. semiconductor company Qualcomm. The segment is slated to begin at 10:15 PM EST, and you can listen live at this link. As usual, I’ll post a link to the podcast as soon as one’s available.

And I just found out that on March 8, Ted Evanoff of the Memphis (Tennessee) Commercial Appeal quoted me in a piece on the economic impact of the Trump tariffs. Ted is one of the country’s best manufacturing reporters, and his 2010 book At the Crossroads is a superb history of the modern American automobile industry and why its fortunes sank so sharply through the outbreak of the financial crisis. So I’m always flattered to know that he’s keeping up with my work.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.


(What’s Left of) Our Economy: Wage Inflation Warnings Just Got a Lot Funnier – Unless You’re a Worker


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Today’s U.S. real wage data from the Bureau of Labor Statistics kept mocking the claims that the United States is teetering on the edge of a dangerous round of wage inflation. In fact, the statistics show that in February, real wage recessions (periods of two quarters of more when after-inflation hourly pay has dropped on net) actually continued.

The month-to-month January-February flat-line in inflation-adjusted private sector wages means that this form of compensation is down cumulatively by 0.28 percent since last May. Worse, January’s 0.19 percent sequential decrease was revised down to a 0.28 percent drop.

In manufacturing, after-inflation wages as of February were 0.19 percent lower than they were in January, 2016. Month-on-month in February, they dipped by 0.09 percent. At least January’s sequential decline of 0.46 percent was revised up – to a 0.37 percent decrease.

Since the onset of the current economic recovery, more than eight years ago, real private sector wages have improved by only 3.98 percent. But that performance is more than ten times better than that of manufacturing, where this pay has grown by only 0.28 percent during that period.


(What’s Left of) Our Economy: For America’s Steel-Makers, No Good Deed Goes Unpunished


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One of the strangest aspects of the debate over the new Trump tariffs is the way analysts and reporters and pundits are now handling the issue of productivity in the American steel industry, which along with aluminum will receive the benefit of these levies.

Usually, industries like steel that win trade protection are described as economic losers – they supposedly need this government crutch because they’ve grown fat and lazy, or technologically obsolete, and as a result have lost whatever ability they’ve had to meet the challenge of global competition. Here’s a typical allegation along these lines made in 2002 by the globalization and free trade cheering Economist magazine – when President George W. Bush imposed tariffs on U.S. steel imports. The charge has been echoed much more recently by economist Michael Mandel.

Nowadays, though, tariff opponents have come up with a new twist: American steel-makers in particular don’t need protection precisely because they’ve become highly competitive. According to this perspective, the steel protectionists inside the outside the White House are overlooking how the major steel job losses they’re obsessing about have resulted overwhelmingly not from predatory foreign competition, but because steel companies have become so efficient that they can produce much more of the metal with a much smaller workforce.

There’s no doubt that the U.S. steel industry has dramatically boosted its competitiveness by introducing new technology and other forms of knowhow into its factories. The authors of the above Economist editorial clearly didn’t know about findings, published in the prestigious American Economic Review, that over the roughly 30 years preceding their leader, the sector’s “output per worker grew by a factor of five, while total factor productivity (TFP) increased by 38 percent. This [made] the steel sector one of the fastest growing of the manufacturing industries over the last three decades, behind only the computer software and equipment industries.”

Moreover, because virtually no American steel firms supply the domestic market with offshored production, virtually none of the labor productivity increase cited above has stemmed from the misleading upward bias to recorded labor productivity figures created by this practice.

But 2002 was then. What about now? Is Mandel right about steel as a latter day productivity growth laggard? Not according to data from the U.S. Bureau of Labor Statistics, which compiles and publishes the productivity data for the government. Its figures show that the American primary metals sector, which includes steel and aluminum, increased its multi-factor productivity by 5.52 percent between 2008 (when the last recession took hold) and 2015 (the latest figures).

Manufacturing overall, by comparison, saw its productivity actually worsen by this measure – considered the most accurate gauge of an admittedly elusive performance indicator – by five percent during this period. Moreover, durable goods manufacturing – the industrial super-sector containing primary metals – saw its multi-factor productivity shrink by 1.28 percent between 2008 and 2015.

So The Economist and Mandel plainly have given steel a wholly unjustified bad productivity rap. But does that mean that those who have recognized steel’s outstanding recent productivity growth are right to argue that the resulting job loss in no way warrants tariffs? Not exactly.

For even though steel and other primary metals have been productivity growth leaders, they’ve been laggards not only in job creation, but in output. Indeed, during that 2008-15 period, primary metals’ inflation-adjusted production sank by more than three times faster (15.98 percent) as overall manufacturing output (5.22 percent). The output gap was even wider between steel and durable goods in toto (-1.28 percent).

A highly productive industry facing a vast import tide that’s been shrinking in constant dollar terms doesn’t prove definitively that trade is central to steel’s problems. But it’s awfully suggestive – indicating in the process that, despite its good productivity deed, the U.S. steel industry is nonetheless being punished.


Our So-Called Foreign Policy: Keeping an Eye on the North Korea Ball


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It’s all too understandable that the stunning announcement of a possible summit between President Trump and North Korean dictator Kim Jong Un has triggered a torrent of comment and speculation about a series of critical details. And they’re all important, including:

>identifying the exact preconditions;

>figuring out how to verify that North Korea is abiding by them;

>determining whether more groundwork should have been laid at lower government levels by both sides before the leaders meet in person;

>evaluating whether Pyongyang’s interest in talks differs from previous such offers;

>more specifically, assessing whether Kim’s move stems from offensive considerations (like splitting the U.S.-South Korea alliance) or defensive (seeking relief from sanctions that may be starting to bite deeply);

>mapping out a strategy for talks assuming that the summit doesn’t produce a comprehensive agreement; and deciding how to foster genuine North Korean denuclearization.

Nonetheless, none of these issues should distract American leaders from what remains their overriding priority – realizing that the North’s major progress toward developing nuclear weapons that can strike the United States has fundamentally changed America’s paramount interest in the region.

As I’ve written in many previous posts, before Pyongyang’s nuclear weapons program reached this stage, it was reasonable (though not without major dangers) for the United States to focus on deterring a North Korean conventional military attack on South Korea, and to stick tens of thousands of American troops in harm’s way on the peninsula to convince the North that any such move would trigger a devastating U.S. nuclear response. The simple reason: This strategy posed no risk to the American homeland.

Now that North Korea apparently is on the verge of being able credibly to threaten the United States with nuclear attack, America’s ongoing strategy is exposing the nation to one of the worst catastrophes imaginable, and for stakes that to me are impossible to justify – the security of a medium-sized country located halfway around the world. Unless you think Kim ultimately hopes to conquer all of East Asia, or bring it under his sway? Or even the Western Hemisphere?

That’s why I keep insisting that the only sensible move for the United States is to pull the troops out, let the wealthy, powerful countries of the region deal with North Korea however they wish, and thereby completely remove any plausible reason for Kim even to threaten nuclear weapons use against the United States, much less follow through if a conflict breaks out.

In fairness, the more serious threat evidently alarming supporters of the American policy status quo is that such a U.S. withdrawal from the scene is that Asia-Pacific countries lose faith in various U.S. defense guarantees it’s enjoyed for decades, look to China to rein in Kim and maintain peace and stability in the region, and let China write the rules for doing business in this economically dynamic area in ways that largely shut out America.

The obvious rejoinders are:

>It’s already excruciatingly difficult for many American companies and entire industries to compete satisfactorily in the region’s often highly protectionist economies – indeed, for decades, Washington has permitted these inequities to persist precisely out of the (bizarre) fear that pressing for genuinely free trade would antagonize these allies and protectorates; 

>whoever sets the framework for trade and other forms of commerce the region, most of its economies will need to access the U.S. market to sustain the exports that have fueled so much of their growth. So (as always) Washington will have all the leverage it needs in economic diplomacy, and will simply need to start using it; and

>however important economic interests are (and I’d be the last to belittle them), it’s unimaginable that, if the security of the entire nation is not at risk in a given situation (which it clearly need not be in the current Korean crisis), any American objectives even begin to compare with the imperative of preventing the nuclear destruction of any major U.S. cities. And if crucial American economic interests can only be protected satisfactorily by courting such nuclear risks, then the country urgently needs a new approach to economics and business.

Incidentally, the one aspect of the apparent (and we need to underscore the continuing uncertainties here) terms under which the summit will take place that deserves greater attention has to do with the seeming North Korean pledge to halt missile testing. I’ve worried that the summit and any subsequent talks could proceed while enabling the North to continue perfecting its nuclear capabilities. For example, despite North Korea’s apparent promise to halt all nuclear-related tests, it doesn’t seem possible to verify that Kim’s scientists have stopped trying to master challenges such as affixing a miniaturized nuclear warhead onto a missile (though reportedly, American intelligence officials believe they’re pretty darned close).

But a missile test freeze at this time does seem especially valuable, given how close Pyongyang appears to be to being able to deliver these weapons across oceans. More such testing is absolutely essential to creating a weapon that could accomplish this goal with high confidence, which presumably (though with North Korea, you never know) Kim would desperately want in a crisis. And verifying a test freeze is pretty easy. The missiles either come out of their silos or they don’t.

So since that’s the North Korea capability that the United States needs most to worry about by far, Pyongyang’s apparent commitment on this front could buy America valuable time. Nonetheless, nuclear risk would remain for the United States, and for reasons that no one taking seriously the principle of “America First” – or anyone other American with their head screwed on right – should tolerate. As a result, I’d still much rather wash America’s hands of this mess and let the locals deal with it.


Making News: Cited in The Washington Post, Newsweek…& More!


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Those Trump tariffs kept me awfully busy this past week – here’s a quick rundown of media-related developments:

Yesterday morning, I was interviewed on Akron, Ohio’s WAKR-AM on the new course apparently being taken in U.S. trade policy. I’ll post a link to any podcast that becomes available, but unfortunately, WAKR doesn’t present podcasts comprehensively.

Also yesterday, my analysis of the new U.S. manufacturing jobs numbers was cited in a post on the subject by Economics and Finance Editor John Carney. Here’s the link.

On March 7, my views on senior White House economic aide Gary Cohn’s tariff-related resignation were quoted in this Washington Post article.

That same day, this Newsweek piece referenced my findings strongly indicating that many other U.S. trade partners have filling the vacuum that’s been left in the American market by tariffs that have kept out much Chinese steel – including by simply sending their imports from China stateside.

And also on March 7, Steel News featured coverage of my Monday CNBC appearance on the Trump tariffs. Here’s the link.

And keep checking in with RealityChek for news of upcoming media appearances and other events.


(What’s Left of) Our Economy: Strong Manufacturing Jobs Numbers Still Aren’t Moving the Wages Needle


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February’s jobs report showed a continuation of strong employment numbers and weak wage performance in manufacturing. The latest 31,000 monthly jobs gain kept up a streak of strong sequential jobs increases that began in July. Manufacturing’s 224,000 year-on-year payrolls increase was its best such improvement since May, 1998’s 262,000. Revisions boosted the sector’s employment by 28,000 for December and January. Manufacturing has now regained 50.63 percent of the net jobs it lost during the Great Recession, and it since last February, has raised its share of overall U.S. employment from 8.49 percent to 8.51 percent. The automotive sector, moreover, ended a technical jobs recession that had begun in April, 2016.

Yet current dollar wages flat-lined sequentially in February for manufacturing, while they grew by 0.15 percent for the overall private sector. And the yearly manufacturing wage advance of 1.67 percent was the slowest since July, 2015’s 1.49 percent. Further, in real terms, both manufacturing wages and private sector wages are in technical recession, with the former down on net since January, 2016 and the latter since last May.

Here’s my analysis of the latest monthly (February) manufacturing figures contained in this morning’s employment report from the Bureau of Labor Statistics:

>February’s strong monthly employment gains and major upward revisions combined to bolster considerably manufacturing’s recent jobs performance.

>Industry’s payrolls grew by 31,000 sequentially in February, while its January jobs increase was revised up from 15,000 to 25,000, and December’s from 21,000 to 39,000.

>Largely as a result, manufacturing payrolls jumped by 224,000 on an annual basis – the best such performance since May, 1998’s 262,000.

>Between the previous Februarys, manufacturing jobs grew by just 23,000.

>Moreover, the year-on-year figures mean that manufacturing employment has been growing faster than employment in the economy’s non-farm sector (the Bureau of Labor Statistics’ American employment universe).

>Last February, manufacturing accounted for 8.49 percent of total non-farm payrolls. This February, its share stood at 8.51 percent.

>Manufacturing has now regained more than half (50.63 percent) of the 2.293 million jobs it lost since the late-2007 onset of the Great Recession through the sector’s employment bottom in February and March, 2010.

>In addition, the automotive sector – which led domestic manufacturing’s early recovery rebound from the Great Recession – ended its employment recession in February.

>A 6,200 monthly jobs gain in February plus upward January revisions helped the motor vehicles and parts industries out of a period of net employment decline that had begun in April, 2016.

>Yet manufacturing’s sterling employment performance contrasts strikingly with its still-dismal wage performance.

>Whereas overall private sector wages rose 0.15 percent sequentially in February, manufacturing wages recorded no change.

>Industry’s wage revisions were mixed, with January’s 0.11 percent growth now judged to be 0.22 percent, December’s 0.11 percent advance now pegged at 0.19 percent, but November’s 0.15 percent gain revised to zero.

>The year-on-year manufacturing wage picture is no better. Since last February, industry’s pre-inflation hourly pay is up just 1.67 percent – the slowest such rate since July, 2015’s 1.49 percent.

>Worse, between the previous Februarys, manufacturing wages grew a much faster 2.88 percent.

>Current dollar private sector wages have risen 2.61 percent on an annual basis.

>As a result, since the start of the current economic recovery, in mid-2009, pre-inflation private sector wages are up 25.80 percent more than manufacturing wages. A year ago, the gap was only 21.32 percent.

>Manufacturing’s real wage record lately has been even dimmer in absolute and relative terms.

>The latest data go through January, but that month, inflation-adjusted pay in industry fell 0.37 percent sequentially – a bigger drop than that for the overall private sector (0.28 percent).

>Year-on-year, real wages are up 0.66 percent in the private sector in toto versus a 0.29 percent dip for manufacturing.

>And worse still, although both the private sector and manufacturing are suffering real wage recession, the former’s began only last May – with after-inflation hourly pay down 0.28 percent since then.

>For manufacturing, such pay is down 0.09 percent since January, 2016.

>Further, since the current recovery’s mid-2009 onset, overall real private sector wages have risen more than ten times faster (3.98 percent) than manufacturing wages (0.38 percent).

>Over the longer term, moreover, manufacturing remains a significant jobs laggard. Whereas industry has now regained more than half the jobs it lost during the recession and its aftermath, the overall private sector has more than doubled its recessionary job losses. Since shedding 8.780 million positions on net from December, 2007 through February, 2010, it has created 18.569 million.

>In addition, manufacturing employment is still 8.24 percent below its pre-recession peak of 13.746 million jobs, overall private sector employment has risen 8.43 percent during that period.


(What’s Left of) Our Economy: Martin Wolf Whiffs on the Trump Tariffs


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I hate to go after the Financial Times‘ Martin Wolf, because he’s definitely one of the world’s smartest and most responsible economics commentators. Unfortunately, his March 6 column on the Trump tariffs fell so far short of his standards – and in fact simply parrots so much wrongheaded and/or simplistic trade-related conventional wisdom – that a response is essential. Let’s take his main arguments seriatim.

Wolf is apparently upset that the tariffs are “explicitly intended to last a long time.” But what could make more sense? If the aim is to spur more American steel and aluminum output, which requires major capital investments that need time to pay off, short-term tariffs, or tariffs with a publicized termination date, are bound to fall way short of their mark. The former will naturally scare off investors that simply have the requisite time horizon; the latter will additionally tell potential capital sources and foreign steel and aluminum exporters exactly when they can resume dumping subsidized product.

Wolf believes that the tariffs will so raise the costs of steel- and aluminum-using U.S.-made products that these industries and their workforces, which vastly outnumber those of the metals-makers, will suffer major losses of global competitiveness. In making this claim, he both overlooks the relatively small steel and aluminum content of many of these products, and oddly dismisses any possibility that these businesses will find ways to offset any notable input price increases with greater efficiencies elsewhere in their operations.

I say “odd” because that’s exactly what conventional economics tells us will happen – at least with companies determined to stay in their respective businesses. It’s one main reason why productivity growth exists at all. It’s also at the least significant that no less than General Motors Chair and CEO Mary Barra has stated that that’s exactly what her company will do: “We would look to find offsets and efficiencies to offset that [higher steel prices] and not have to pass it on to the customer.”

Wolf worries about the spread of what he admits are trade actions confined to steel and aluminum because so many American trade partners will retaliate. I was waiting for him – as a major supporter of free trade – preemptively to scold these countries for not realizing that theory holds that the best way to respond to tariffs is by compensating losers, not by retaliating. But it doesn’t appear to think that this venerable maxim applies outside the United States.

Wolf predicts that this retaliation will take the form of World Trade Organization  (WTO) challenges and safeguards “to forestall diversion of imports on to their markets.” But because the global steel market is a single integrated market (like so many other markets in this era of extensive globalization), such country-specific measures will fail to prevent diversion as completely as have similar past U.S. Measures. That’s probably why the European Union, for example, has hinted that it won’t wait for the WTO Good Housekeeping Seal for any retaliation. Which of course would be illegal according to WTO rules.

Wolf regurgitates the argument that the sweep of the Trump tariffs will hit “friends and allies” – belying the claim that they’re based on national security considerations. As I’ve noted, though, many of these supposed friends and allies have long been directly or indirectly helping make sure that an outsized share of Chinese-spurred global overcapacity in steel and aluminum winds up being sent to the United States. With allies like these….

Wolf expresses bewilderment that the United States would seek protection for its steel and aluminum industries because output in both has been “stable” since roughly 1990. But in the business world, that’s a euphemism for “no growth since roughly 1990.” Does that scream “competitiveness” to you? Moreover, Wolf overlooks the loss of global and U.S. market share for both sectors – not normally a sign of companies or industries with bright or even viable futures. (See here for the steel data and here for the aluminum figures.)

Wolf uses tariffs as his main measure of whether, as many trade policy critics argue, the United States really is the world’s least protectionist major economy. But nowhere in his article does the term “non-tariff barriers” appear – a shocking omission given their prevalence and strong growth as global negotiations have reduced tariff rates worldwide.

Finally, Wolf alludes to the canard that America’s national savings rate is overwhelmingly responsible for its bloated trade deficits. In fact, the relationship between the trade and broader current account balances on the one hand, and the savings rate on the other is a mathematical identity. As such, it says nothing whatever about causation – which could easily flow the other way.

It’s understandable that Wolf doesn’t like the Trump tariffs per se – I’ve been critical of them in some respects myself. But the scornful tone of his article, and its utter failure even to consider obvious rejoinders (much less address them) indicates that something deeper is at work here: One of our most thoughtful and knowledgeable economics analyst has come down with a bad case of Trump Derangement Syndrome.