Making News: “Jersey Joe” Piscopo Podcast…& More!


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With the continuing onrush of trade and foreign policy news, it’s getting tough to announce some upcoming media appearances (especially when the opportunities arise on short notice) and to post links to podcasts as quickly as I’d like.  So here’s a catch-up column.

On Friday, July 6, it was a genuine thrill to appear on the talk radio show hosted by former Saturday Night Live cast member “Jersey Joe” Piscopo on New York City’s AM 970.  Click on this link to listen to a great conversation on President Trump’s trade policies and how they’re likely to turn out for the American economy and the global economy.  The link should take you to the start of my segment.

That same day,‘s John Carney cited my finding that, contrary to the expectations of trade and globalization cheerleaders, the new U.S. jobs report showed that, despite the Trump steel and aluminum tariffs, employment has been rising at the metals-using industries that were supposed to be crippled by these moves.  Here’s the link.

On July 2, I was interviewed on “Breitbart News Tonight” on Sirius XM Patriot radio on the Trump trade policies.  You can listen to the podcast at this link.

On June 28, Gordon G. Chang quoted my views on recent U.S. efforts to curb China’s access to advanced American defense-related technology in this post for The National Interest.

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


Im-Politic: New Frontiers in Mainstream Media Coddling of Criminal Aliens


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Another Fourth of July has come and gone, and here’s hoping everyone had a great holiday. One recent development that put a damper on mine, though: The latest instance of the Mainstream Media bending over backward to coddle or overlook criminal behavior by illegal immigrants, in an apparent effort to promote further the idea it’s fundamentally illegitimate for a country (like the one that just celebrated a birthday) to control its borders and the inflow of foreigners.

Suggestively, the methodology used in this deceitful exercise – which appeared in The New York Times on June 27 – was almost exactly the same as employed in previous cases of closet Open Borders propaganda: Dismissing the seriousness of numerous categories of offenses that would surely be regarded as extremely serious if mentioned in any context other than illegal immigration.

According to the authors of the article, titled “MS-13 Is Far From the ‘Infestation’ Trump Describes,” “[President] Trump’s statements conflating immigrants with barbaric ‘thugs’ are misleading. Among undocumented immigrants convicted of crimes who were apprehended by Border Patrol, relatively few were convicted of violent crimes such as assault and homicide. ” The clear implication: The Border Patrol patrol is (“tragically?” “inexcusably?” “wastefully?” “cruelly?” – pick your favorite disparaging adverb) focusing its efforts on individuals that in a truly just world would be left alone.

Indeed, as shown by the third graphic in the piece, between October, 2015 (under the Obama administration) and May, 2018, 27,589 illegal immigrants apprehended by U.S. authorities were convicted of crimes. More than half (14,374) were guilty of illegal entry or reentry into the United States – which the authors obviously consider no big deal.


But now look at what the other 13,215 illegals (nearly 48 percent of the total) were arrested for. On top of the 13 convicted of homicide or manslaughter, nearly 4,900 (the largest group in this subset) were drunk drivers (a practice outlawed because of its great potential to kill and maim). Nearly 3,700 possessed or were selling illegal narcotics. More than 2,100 committed assault, battery, or domestic violence (the latter of course disproportionately harms women). Another 347 were sex offenders (a crime that also usually victimizes women). Nearly 1,700 others are being punished for burglary, larceny, theft, and fraud. And 488 committed various illegal weapons-related crimes (portrayed as especially heinous, dangerous offenses by a large percentage of the progressive left).

Moreover, keep in mind that these conviction totals cover only a two-and-a-half year period, not the grand total of all illegal immigrants arrested. In addition, surely numerous illegals who have committed these crimes have not been apprehended yet. And don’t assume that those arrested for illegal reentry had been “solid citizens” otherwise, either. It’s all too common for them to have been deported in the first place for much more serious offenses.

Just as outrageous, this Times article used an even more transparently phony ploy to depict the Trump administration as shamefully hyping the illegal immigrant crime threat. As suggested by the title, the authors tried to minimize the threat posed by Central America-tied MS-13 gang with figures purporting to show that it is “not particularly large, nor is it growing. The evidence, they contend, is in the second chart appearing in their article.

But here’s what readers aren’t told: The gang at the top of the chart – 18th Street – is closely tied to Central America as well.

Finally, the presentation of this piece by The Times was unusual – to put it diplomatically. It was posted as an “Opinion” piece by the paper – which is a good start. But the three authors are identified as regular Times staffers. True, they’re all “members of the Opinion graphics team” at The Times. But they’re not regular columnists or any other kind of opinion writer. And The Times is decidedly not in the habit of permitting news or any other staffers from writing opinion articles. “News analyses,” which as suggested by their name allegedly fall into a third category, are as far as the paper will go, and this privilege is extended only to experienced reporters. Yet there’s nothing in this post to indicate that the authors are recognized authorities on immigration policy, or that they have any credentials of any kind in this field – or any other.

From all appearances, the authors are simply three people who happen to work at production-related jobs at The Times and who don’t like Mr. Trump’s immigration policies. And it seems that on that basis alone, the paper’s Opinion staff decided that their (transparently flimsy) claims merited this prestigious, influential news organization’s bright spotlight. It’s hard to know whether to label this post “fake news” or “fake punditry.” But it’s just as hard to deny legitimately that it represents a new twist on pro-Open Borders media bias.

(What’s Left of) Our Economy: A 20-Plus Year High in Manufacturing Jobs Gains – & Wages Growth Still Lags

June’s 36,000 monthly manufacturing employment gain, the sector’s best sequential performance since December’s 39,000, helped industry produce its best annual job creation figure (285,000) since April, 1998 (288,000). Largely as a result, manufacturing employment as a share of total employment hit its highest level (8.54 percent) since July, 2016 (8.56 percent). That is, since that time, American manufacturing job creation has risen faster than overall U.S. job creation.

Pre-inflation manufacturing wages rose by 0.22 percent sequentially in June – unusually, beating the overall private sector’s performance (0.19 percent). But industry’s continuing wages woes were made clear again by the annual increase. Not only was it a meager 1.66 percent in constant dollars (well short of the overall private sector’s 2.74 percent advance). But this figure meant that manufacturing wage increases kept decelerating from the previous year’s rate (2.19 percent between June, 2016 and June, 2017).

The June inflation-adjusted wage figures won’t be released until next week, but as of May, manufacturing remained stuck in a real wage recession that began in January, 2016

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

>Thanks to a June monthly employment improvement of 36,000 (the best such gain since December’s 39,000), U.S. manufacturing last month saw its payrolls rise by the biggest absolute number (285,000) in more than twenty years. The previous best annual job gain for industry came in April, 1998, when the total hit 288,000.

>June’s strong performance also helped lift manufacturing’s share of total non-farm employment (the Bureau of Labor Statistics’ U.S. jobs universe) to 8.54 percent – the highest level since July, 2016’s 8.56 percent.

>Manufacturing employment revisions were slightly positive, with May’s previously reported 18,000 sequential increase upgraded to 19,000, and April’s 25,000 now judged to be 28,000.

>Yet industry continued to be dogged by sluggish pre-inflation wage growth in June.

>The monthly increase of 0.22 percent actually exceeded that of the overall private sector (0.19 percent).

>Moreover, the previous months’ sequential wage performances were revised slightly upward, too – from a flat-line in May to a gain of 0.04 percent, and from a 0.15 percent sequential rise in April to 0.22 percent.

>On an annual basis, however, current dollar manufacturing wages improved by only 1.66 percent in June – well behind the private sector figure of 2.74 percent.

>Worse, the June figure represented yet another year of deceleration in manufacturing wage growth. Between the previous Junes, the sector’s hourly pay increased by 2.19 percent.

>By contrast, wage growth has been speeding up in the private sector, with the latest annual June increase besting the June, 2016-June, 2017 gain of 2.50 percent.

>And throughout the current economic recovery, even the mediocre-at-best increases in pre-inflation private sector wages have dwarfed those recorded for manufacturing – and the gap keeps widening.

>As of this June, since mid-2009, current dollar private sector wages had risen 26.43 percent faster than manufacturing wages. As of June, 2017, the difference was 21 percent.

>Further, in inflation-adjusted terms, hourly pay in manufacturing has been a much greater laggard.

>The latest official figures go through May, and they show that whereas real manufacturing wages fell by 0.19 percent on month, they inched up by 0.09 percent for the private sector.

>On an annual basis, as of May, inflation-adjusted manufacturing wages are down 1.10 percent. For the private sector, they’ve been flat.

>And although both manufacturing and all private sector workers have been experiencing technical real wage recessions (periods of cumulative shrinkage lasting at least two quarters), the private sector’s began only last June, and has seen constant dollar hourly pay dip by 0.09 percent.

>Manufacturing’s real wage recession began two-and-a-half years ago – in January, 2016. And since then, price-adjusted hourly pay if off by 0.19 percent.

>And during the current recovery, real private sector wages have risen more than 15 times faster (4.27 percent) than real manufacturing wages (0.28 percent).

>Nonetheless, despite its strong recent performance, manufacturing remains a longer-term significant job-creation laggard, too. Since its latest employment bottom, in February and March, 2010, it’s regained 1.26 million (54.95 percent) of the 2.293 million jobs lost during the recession and its immediate aftermath.

>The overall private sector lost 8.780 million jobs from the year-end 2007 onset of the recession through February, 2010. Since then, it’s created 19.291 million net new jobs.

>In fact, since the last recession’s onset, the private sector has boosted its employment by 9.08 percent. But manufacturing payrolls are still down 7.51 percent from their December, 2007 levels.

Following Up: Why Auto Tariff Alarmism Just Got (Even) Sillier


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The claims just keep coming that President Trump’s threatened auto tariffs will cause vehicle makers to boost the prices paid by American consumers per vehicle by thousands of dollars. So does the evidence that such claims are “horse hockey” – to quote a memorable euphemism for “baloney” recently used by CNBC’s Rick Santelli (in a similar context).

As I noted in a post last Wednesday, this alarmism flies in the face of recent U.S. auto sales trends – which recently have been weak enough to force the companies to offer deep discounts to prop up their numbers and try to keep market share. As I’ve also noted, those trafficking in price hike fears either know nothing about business, or are trying to fool their audiences. For although producers’ costs of course influence consumer prices, the latter’s main determinant is what the former believe the market will bear. To believe otherwise is to believe that companies aren’t striving to maximize revenues and profits wherever and whenever possible. And by extension, it’s logically to believe that, although auto makers don’t believe their customers will pay those higher prices today, they’ll change their tunes as soon as vehicles become much more expensive.

Which brings us to the newest evidence – yesterday’s data on U.S. auto sales for June and for the first half of the year. Overall, they were up, and up nicely (especially for last month, when they rose year-on-year). But as always, you need to look under the hood. (Couldn’t resist!) And that’s when you encounter vital contrarian details provided by analysts at Cox Automotive.

According to the Associated Press’ coverage of their conclusions, the increases were driven by “low-profit sales to fleet buyers such as rental car companies, and retail sales to individual buyers were propped up by rising incentives such as rebates and subsidized leases.”

Indeed, said observed one Cox consultant, “Retail sales have been flat, and even those sales have been supported by incentives being up 6 percent.”

Does this sound like a market where big, sudden price increases have much chance of sticking? If you agree, I’d be happy to show you a bridge in Brooklyn that’s available for a song. And if you’re parroting this line, chances are you’d be a great used car salesman.

(What’s Left of) Our Economy: A Productivity Collapse in America’s “Industries of the Future”?


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To the surprise of exactly no one who’s been following the issue lately, last week’s newest data from the federal government on productivity was literally brimming with bad news.

True, the figures only go up to 2016 – because the report covered multifactor productivity, the broader of the two measures tracked by the Labor Department. These figures take longer to calculate than the narrower productivity measure (labor productivity) because they examine many inputs other than simply hours worked. But the results were entirely consistent with the longstanding story that the U.S. economy’s efficiency keeps growing more and more slowly – that is, where it continues to grow at all.

In fact, America’s recent productivity performance has been so bad that observers could actually take some comfort in the headline finding that multifactor productivity improved between 2015 and 2016 in only 37 of the 86 manufacturing industries looked at in detail by Labor. That’s because this total was significantly higher than in 2014-15 – when multifactor productivity rose in only 21 of those sectors.

I could repeat previous exercises and list the industries with the best and worst latest annual multifactor productivity performances – which as usual, will be full of surprises for those expecting that the stars would be the nation’s technology-intensive “industries of the future.” But for now, let’s focus on what looks like an especially alarming development: Over the last roughly three decades, these crucial chunks of the economy have turned from multifactor productivity growth champs to multifactor productivity disaster areas. Over the same period, several other touted advanced manufacturing industries have also tumbled into the dumps multifactor productivity-wise from much less lofty perches.

The worst examples of literal collapse in multifactor productivity growth are in information technology hardware, and the most dramatic plunge has taken place in computers and computer peripheral equipment. Between 1987 and 2016, these sectors collectively have run away with the American economy’s multifactor productivity growth honors, with their efficiency advancing by this measure by 12.1 percent annually.

Since 2007, however (the year the Great Recession began), their average annual multifactor productivity growth rate has slumped to 1.2 percent, and between 2015 and 2016, it actually fell – by 2.6 percent.

Semiconductors and electronic components fared little better. Their 1987-2016 average annual multifactor productivity growth was 9.1 percent. But it’s fallen throughout the 2007-2016 period, and between 2015 and 2016 – when the current economic recovery was in its seventh year – it also dropped by 2.6 percent.

The ups and downs of multifactor productivity growth in communications equipment (including the gear used by the internet) have been more modest, but undeniably depressing all the same. Average annual growth between 1987 and 2016 was only 2.6 percent, but during the 1990s, it surged to nearly 5.5 percent. But since recession onset year 2007, multifactor productivity has decreased here as well, and declined by 1.6 percent between 2015 and 2016.

The aerospace industry, long America’s biggest net export winner, oddly has never registered robust multifactor productivity growth – at least not since 1987, when the data began to be collected. The average annual multifactor productivity growth rate for finished aircraft, missiles, and their parts? It’s actually -0.1 percent. The golden age (relatively speaking) of multifactor productivity growth for these companies came in between 2000 and 2007, when the average annual advance was 2.7 percent. But since 2007 it’s off slightly (dipping by an average 0.6 percent per year) and between 2015 and 2016 alone, plummeted by 6.7 percent.

Yet even these dismal figures look positively glowing when compared with those of the American pharmaceutical industry – widely viewed (like aerospace) as the global state of the art. From 1987 to 2016, multifactor productivity in this sector has decreased by an average of 2.3 percent every year. That’s by far the worst performance among the 86 industries tracked by the Labor Department. And since 2007, the rate of decline sped up to an annual average of 3.8 percent. Between 2015 and 2016, moreover, the drop-off gained even more momentum, reaching 4.8 percent.

Nor have other manufacturing sectors not typically classified as “technology intensive,” but nonetheless falling into the high value category, been immune from these woes. Here are the average annual multifactor productivity growth (and shrinkage) figures for key time periods for sectors both qualifying for this description, and known for strong exports:


agriculture, construction, and mining machinery

1987-2016: -0.2 percent

2007-2016: -2.5 percent

2015-2016: -8.6 percent (the year’s worst nosedive)


industrial machinery

1987-2016: 0.3 percent

2007-2016: -1.1 percent

2015-2016: -4.1 percent


turbines and power transmission equipment

1987-2016: 0 percent

2007-2016: 0.1 percent

2015-2016: -4.4 percent

It’s always possible that these multifactor productivity numbers have improved substantially over the last two years. But 30-year old trends rarely turn around completely, or even close, in such short time-spans. And multifactor productivity growth trends don’t turn around without the type of capital spending surge – among other developments – that the economy simply hasn’t seen yet. Until business begins spending considerably more, expect multifactor productivity in America to remain depressed – along with the nation’s odds of recreating sustainable prosperity.

(What’s Left of) Our Economy: The First Quarter Trade Deficit Kept Rising, & its Growth Rate Kept Falling


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For the second straight time, a higher estimate of the inflation-adjusted trade deficit weakened the real U.S. growth figure for the first quarter. According to the final (for now) read for the first quarter, the constant dollar trade shortfall was $656.8 billion – higher than the $650.9 billion reported in the previous growth figure for the first quarter. And partly because this increase turned net trade into a minor (0.04 percentage point) drag on growth, the quarter’s real GDP increase was marked down from a 2.16 percent annualized improvement to 1.98 percent.

Moreover, the new after-inflation trade deficit remained the second highest such quarterly figure since the $703.2 billion recorded for the third quarter of 2007 – just before the Great Recession began. It was also slightly higher the final (for now) fourth quarter level of $653.9 billion.

As with the second GDP report for the first quarter, the quarterly records for total exports and goods exports remained intact, but declined from the levels previously reported. The after-inflation services export figure, however, came in higher (at $690.8 billion on an annual basis) – and represented a new record as well. All of the latest import figures were upgraded from their previously reported record levels – the same pattern as with the first quarter’s second GDP report. Similarly, the sequential slowdowns in the growth of total imports and goods imports were not quite as great as previously reported (76.49 percent as opposed to 79.17 percent, and 83.99 percent versus 86.21 percent, respectively). But they were still the greatest such slowdowns since the fourth quarter of 2010 and the first quarter of 2009, respectively. The latter date came at the depths of the Great Recession.

Trade’s substantial drag on cumulative growth during the current U.S. recovery became heavier, according to the new GDP figures – reducing real growth by 9.99 percent ($301.2 billion), not the 9.41 percent reported in the second read. This trade drag was also up from the fourth quarter’s 9.82 percent ($287.6 billion). But the much larger hit to growth from the recovery-era increase in the Made in Washington deficit (which consists of trade flows impacted greatly by U.S. trade policy) actually decreased sequentially – from 18.38 percent of that cumulative growth ($538.81 billion) to 17.37 percent ($523.88 billion).

Here are the trade highlights from Thursday morning’s final (for now) report on first quarter GDP growth from the Commerce Department:

>The Commerce Department’s final read on gross domestic product (GDP) in the first quarter of this year revealed that America’s trade performance depressed the initially reported inflation-growth figure for the period for the second straight time.

>Partly because this latest estimate judges that the quarter’s after-inflation annualized trade gap was actually $656.8 billion rather than $650.9 billion, the period’s annualized growth figure was reduced from 2.16 percent to 1.98 percent.

>The constant dollar trade shortfall estimate was also (0.44 percent) higher than the fourth quarter of 2017’s $653.9 billion – and replaced it as the second highest such figure since the $703.2 billion during the third quarter of 2007 – just before the Great Recession began.

>Moreover, whereas the previous estimates pegged net trade as a minor contributor to growth during the first quarter (according to the second read, fueling 0.08 percentage points of the 2.16 percent real annualized growth), this final read determined that trade subtracted 0.04 percentage points from the lower 1.98 percent real annualized growth.

>As with the previous report on first quarter growth, levels of inflation-adjusted total exports and goods exports remained at record levels in the latest GDP data, but came in slightly lower than initially reported. Yet real services trade broke this pattern, as a higher export estimate lifted their new quarterly record higher.

> Real total exports are now judged to have been $2.2496 billion annualized, not the $2.2529 trillion estimated in the second first quarter read. As a result, the sequential increase on an annualized basis was 0.89 percent, not 1.04 percent.

>The new real total export total nonetheless remained the category’s fifth straight quarterly record.

>Real goods exports are now judged to have been $1.5622 trillion on an annual basis, not the $1.5696 trillion previously reported. As a result, the annualized sequential increase was 0.85 percent, not the 1.32 percent previously reported.

>But this too was a fifth straight quarterly record.

>Real services exports – the exception to the pattern – are now judged to have been $690.8 billion annualized, not the$687.4 billion previously reported. As a result, the annualized sequential increase was 0.96 percent, not 0.60 percent, and this category’s record performance improved further.

>On the import side, the pattern displayed in the previous read – quarterly records remaining intact but at lower levels – was repeated for all major categories.

>The first quarter’s total real import figure has now been revised up from $2.9038 trillion on an annual basis to $2.9065 billion. As a result, the sequential increase is now 0.79 percent, not 0.70 percent. The new total is still a second straight quarterly record.

>The goods imports total is now estimated at $2.4015 trillion annualized, up from $2.3985 trillion figure previously reported. As a result, the sequential growth is 0.65 percent, not the 0.56 percent previously reported, but the level is still a second straight quarterly record, too.

>Real services imports for the first quarter are now estimated at $503.3 billion annualized, not the $502.9 billion previously reported. As a result, their sequential growth is now 1.43 percent, not the 1.35 percent previously reported. But this new total is a record, too.

>Also as with the previous GDP report, the new figures show that both the total imports and the goods imports constant dollar sequential growth rates have experienced their biggest sequential slowdowns in years – though these slowdowns are now judged to be slightly more modest.

>Total real imports grew at a 0.79 percent quarter-to-quarter rate in the first quarter – faster than the previously reported 0.70 percent. But compared with the fourth quarter’s 3.36 percent rate, its still 76.49 percent lower – and it’s still the biggest such change since the 81.87 percent reported for the fourth quarter of 2010.

>Inflation-adjusted goods imports grew sequentially in the first quarter by 0.65 percent, not the 0.56 percent rate previously reported. But that rate was still 83.99 percent lower than the fourth quarter’s 4.06 percent – and the biggest such change since the 87.63 percent drop in the first quarter of 2009 – near the low point of the Great Recession.

>The upwardly revised first quarter real trade deficit figure increased the growth drag created by the increase in this shortfall during the current economic recovery.

>As of the previous GDP read, the real trade deficit’s widening since mid-2009 – when the current recovery began – reduced cumulative growth by 9.41 percent, or $284.6 billion.

>As of the latest GDP report, these figures have risen to 9.99 percent, and $301.2 billion.

>The new first quarter figures are also higher than the fourth quarter figures: 9.82 percent and $287.6 billion, respectively.

>The growth drag of the increase in the Made in Washington trade deficit – which focuses on the non-oil goods trade flows most heavily influenced by trade agreements and other trade policies – has been much greater during the recovery.

>The previous first quarter read pegged this growth drag at $535.09 billion – which had cut the recovery’s cumulative constant dollar GDP increase by 18.26 percent.

>The new read actually reduced the growth drag to 17.37 percent – or $523.88 billion in lost growth.

>And the new figures are also smaller than those for the fourth quarter – 18.38 percent, and $538.81 billion.

Making News: A USAToday Op-Ed on Trump & Trade, & a New National Radio Podcast on the China Tech Threat


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I’m pleased to announce that USAToday has just published my latest op-ed article — a piece arguing that President Trump is exactly right to believe that the United States has ample clout to prevail in trade conflicts with foreign economies. Read it at this link.

Incidentally, this article ran as a solicited rejoinder to a USAToday editorial criticizing Mr. Trump’s trade policies. As I’ve written before, the newspaper deserves great credit for its regular practice of letting readers know that there are (at least) two sides to every story.

Also the podcast is now on-line of my interview last night on John Batchelor’s nationally syndicated radio show. Click here for an information-packed discussion about the latest developments in the U.S.-China competition to control industries and technologies vital for national security and prosperity.

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

Making News: Back on National Radio Tonight Talking China, & CNBC Interview Now On-Line


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I’m pleased to announce that I’m scheduled to return to John Batchelor’s nationally syndicated radio show tonight to help examine where President Trump’s economic conflict with China stands.  Click here to listen live on-line to what’s sure to be an informative discussion among John, co-host Gordon G. Chang, and me.  And our special focus will be U.S. efforts to restrict China’s access to cutting-edge (including  defense-related) technology.  The segment is slated to start at 10 PM EST.

As usual, if you can’t tune in, I’ll be posting a link to the podcast as soon as one’s available.

Speaking of podcasts (or podcast-like links), click here to see the video of my interview on CNBC Monday on U.S.-China trade tensions.  Especially interesting is that my interlocutor was a former top George W. Bush’s aide who was trying to claim that his administration handled China just swimmingly.

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


Glad I Didn’t Say That! About that Auto Tariff Alarmism


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“The Alliance of Automobile Manufacturers, a trade group representing domestic and foreign automakers with plants in the U.S., predicts the average price of a new vehicle will increase $5,800 if the president imposes a 25 percent tariff on imported models.”

–, June 27, 2018

“U.S. auto sales in June likely rose 2.5 percent from the same month in 2017…although discounts on new vehicles remain high, industry consultants…said on Tuesday.”

–Reuters, June 26, 2018


(Sources:  “Automakers to Trump:  Tariffs will drive up auto prices and cost thousands of jobs,” by Phil LeBeau,, & “U.S. June auto sales seen up 2.5 percent, J.D. Power and LMC,” by Nick Carey, Reuters, June 26, 2018,


(What’s Left of) Our Economy: With Allies Like These….


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Nationally syndicated Washington Post columnist Robert J. Samuelson intended this week’s essay to show how foolish, and possibly disastrous, President Trump’s emerging new trade policy will be – including for the national security goals the administration has set. That’s why it’s so ironic that his column instead unwittingly revealed how thin a reed the nation’s long-time security strategy has been, and nowhere more so than in the importance it’s assigned to its long-time security alliances in Europe and Asia.

Samuelson’s piece conveys a warning that the administration’s trade policy moves so far are on course to undermine national security in two related ways: by ignoring the alleged imperative of enlisting its major allies in a multilateral campaign to discipline predatory Chinese intellectual property and related trade and industrial policies that need curbing; and by actually antagonizing these countries and thereby jeopardizing the very existence of those alliances.

This argument conveniently overlooks several big trade and security fundamentals. First, globalist pre-Trump American leaders themselves have insisted that they’ve long tried to create multilateral pressure on China’s rogue economic behavior for years before Mr. Trump became president – though it’s unclear how serious these efforts were. For example, the Trans-Pacific Partnership (TPP) trade deal largely touted by the Obama administration for its potential to curb China’s influence contained a back door for numerous imports with major levels of Chinese content.

Second, it’s anything but obvious that U.S. alliances strengthen American security on net. As I’ve pointed out frequently (including this past week), they continue to expose the American homeland to the risk of nuclear attack even though the Soviet-style kinds of global threats their nuclear guarantees were intended to counter have been (literally) gone for nearly three decades. Moreover, as has been widely reported, the militaries of many of these allies have deteriorated so markedly that their potential as force multipliers for the United States is open to serious doubt.

But Samuelson’s analysis makes no sense even if these considerations are put aside. The key is in his own portrayal of leading U.S. allies – which he describes as livid about recent American steel tariffs, and sure to become even angrier is levies are imposed on their motor vehicle exports to the United States. Indeed, he worries, major auto-exporting countries like Germany, Japan, and South Korea could well become so upset with the United States that they not only retaliate in kind, but unhesitatingly move to supply China with whatever high tech goods and services Washington embargoes or restricts.

In other words, these allies would redouble their efforts to feed the Chinese beast even though all of them face China trade, technology, and/or national security threats of their own, and even though the United States continues to provide them with crucial military protection – including, in the case of Japan and South Korea, from Chinese designs. But these same allies were supposed to be amenable to cooperating with Washington to deal with China? Even more revealing, the allies would choose to intensify confrontation with the United States instead of (finally) proposing concrete steps to deal with the China problem over which they profess concern.

And they would display no interest whatever in meaningfully removing the formidable obstacles they have created to block American automotive exports. (The recently reported German auto-makers’ proposal to eliminate all tariffs in the sector on both sides of the Atlantic would leave in place towering European value-added taxes – e.g., 19 percent in Germany – on motor vehicles and most other imports. No such U.S. equivalent exists either for autos or for light trucks and sport utility vehicles.)

No one can fault these European and East Asian countries from acting in their own perceived interests – or even for trying to have their cake and eat it, too. Indeed, for decades, globalist American foreign policies have encouraged and actively enabled precisely this kind of free-riding. What these countries should be faulted for is posing as allies (let alone allies with justifiably hurt feelings), and worse, as paragons of sobriety and free market values nobly resisting a wrecking ball of an American President. As for any Americans and U.S. leaders who keep fooled by this act for so long and, more important, failing to take the policy hints – shame on them.