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Tag Archives: trade war

Those Stubborn Facts: A Trump China Trade Deal Scorecard Without the Hysteria

08 Monday Feb 2021

Posted by Alan Tonelson in Those Stubborn Facts

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China, China trade deal, Phase One, tariffs, Those Stubborn Facts, Trade, trade agreements, trade policy, trade war

China’s global imports, calendar year 2020 y/y: -1.1 percent

China’s imports from the U.S., calendar year 2020 y/y: +9.8 percent

 

“Thus [Trump’s] Phase 1 agreement appears to have contributed to 

some improved U.S. export performance to China, even if China is

far away from meeting the year one commitments.”

 

(Source: “U.S.-China Phase 1 Trade Agreement – Data Through December 2020; China has increased purchases of agricultural and energy products above 2017 levels but did not reach first year agreed purchases in 2020 and won’t reach the agreed level even if measured from March 2020-February 2021,” by Terence P. Stewart, Current Thoughts on Trade, February 6, 2021, https://currentthoughtsontrade.com/2021/02/06/u-s-china-phase-1-trade-agreement-data-through-december-2020-china-has-increased-purchases-of-agricultural-and-energy-products-above-2017-levels-but-did-not-reach-first-year-agreed-purchases-in/)

Making News: China Policy Blueprints Critique Re-Posted in The National Interest

07 Sunday Feb 2021

Posted by Alan Tonelson in Making News

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alliances, allies, Asia, Biden, CCP, China, China Strategy Group, Chinese Communist Party, decoupling, Donald Trump, Making News, multilateralism, NationalInterest.org, sanctions, semiconductors, Silicon Valley, supply chain, tariffs, Trade, trade war, XiJinping

I’m pleased to announce that The National Interest has republished as a single article my recent blog posts detailing the major flaws of two blueprints for China policy that have just been offered to the Biden administration from establishment thinkers. In case you missed them the first time around, or want to re-read, here’s the link.

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

Glad I Didn’t Say That! A Changed Biden Tune on Trump’s China Trade Deal

30 Saturday Jan 2021

Posted by Alan Tonelson in Glad I Didn't Say That!

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Biden, China, Donald Trump, Glad I Didn't Say That!, Phase One, tariffs, Trade, trade deal, trade war

”China is the big winner of Trump’s ‘phase-one’ trade deal with Beijing.  True to form, Trump is getting precious little in return for the significant paid and uncertainty he has imposed on our economy, farmers, and workers.”

–Presidential candidate Joe Biden, January 15, 2020

 

”The Biden administration will review all national security measures put in place by former President Donald Trump, including the U.S.-China Phase 1 trade deal signed in January 2020….”

—Reuters, January 29, 2021

 

(Sources: “Biden Slams Trump-China Trade Deal as Lacking on Key Disputes,” by Jennifer Epstein, Bloomberg.com, January 15, 2020, Joe Biden Blasts Trump Phase One U.S.-China Trade Deal – Bloomberg and “White House says U.S.-China trade deal among issues in broad review,” by Steve Holland and Andrea Shalal, Reuters, January 29, 2021, White House says U.S.-China trade deal among issues in broad review | Reuters)

(What’s Left of) Our Economy: Biden Trade Policy’s Off to a Flying Stop

14 Thursday Jan 2021

Posted by Alan Tonelson in (What's Left of) Our Economy

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China, inflation, Joe Biden, Katherine Tai, National Foreign Trade Council, offshoring lobby, tariffs, Trade, trade policy, trade war, Trump, U.S. Trade Representative, USTR, {What's Left of) Our Economy

Any minimally intelligent discussion of the incoming Biden administration’s trade policy and the role of his pick for U.S. Trade Representative (USTR) needs to recognize at the start that Katherine Tai will make exactly none of the big calls on trade.

That’s not a knock on her specifically. But as nearly always the case (and the Trump administration was a major exception, as its trade envoy, Robert Lighthizer, was a prime author of specific, central initiatives), these decisions will be made way above her pay grade – almost certainly by the President himself or Treasury Secretary-designate Janet Yellen, or a combination of those two, along with the various special interests they need to please.

Even so, Tai will play an important message-bearing and policy defense role, especially in testimony before Congress, and in this vein, her first effort following her brief remarks following her nomination announcement got the Biden team’s record off to a start just ever so slightly above “same-old-stuff” level.

Most noteworthy, puzzling, and perhaps revealing was the choice of audience: the National Foreign Trade Council. For with its membership consisting of U.S. multinationals and big firms from highly protectionist economies like Germany and Japan, it’s long been a pillar of the corporate Offshoring Lobby.

Sure, many of these members have started to voice complaints about their China-related troubles in particular. But they’ve made equally clear that they have no clue as to realistic ways of solving them. In fact, their dogged opposition to unilateral, Trump-like U.S. tariffs as remedies (which have sharply curbed the access to the American market of their overseas production, and the availability of massively subsidized Chinese inputs for their domestic operations) has rendered them big obstacles to the remaining overhaul national trade policy needs.

It’s also true that everything known about Biden’s own long record on the matter, and his own statements during the campaign, makes clear the incoherence – and just as likely cynicism – of his own current stated approach (notably, stressing the imperative of working with – deeply conflicted and chronically fence-sitting — American allies to counter China’s trade and broader economic abuses).

Even so, given the pains Biden took to portray himself as “Middle Class Joe” whose trade initiatives and related decisions would prioritize American worker interests above all else, it needs to be asked why, from a purely political standpoint, his choice for trade negotiator chose an audience whose members have long pushed for exactly the opposite. Why not appear before a union audience?

Just as bizarre, Tai emphasized to these died-in-the-wool offshorers that “The President-Elect’s vision is to implement a worker-centered trade policy. What this means in practice is that U.S. trade policy must benefit regular Americans, communities, and workers.”

What did she and her superiors (who of course cleared her remarks) hope to accomplish with this declaration? Agreement? Or even the beginnings of theological conversion?

Weirder still: Her observation that “people are not just consumers — they are also workers, and wage earners” and, more pointedly, that when thinking about trade, it’s crucial to emphasize that “Americans don’t just benefit from lower prices and greater selection in shops and markets.” After all, her boss emphasized throughout the campaign that “President Trump may think he’s being tough on China. All that he’s delivered as a consequence of that is American farmers, manufacturers and consumers losing and paying more.”

It’s of course possible that Biden and his team could figure out a way to shield the entire U.S. domestic economy, from Chinese – and other countries’ – predatory practices without reducing the price competitiveness of these imports in the U.S. market. But it’s suggestive at the very least that after months on the campaign trail – and many decades in public life – the President-Elect has offered no specifics. And Tai’s speech did nothing to clear up this mystery.

(Not that there’s been any sign of noteworthy trade-related inflation during the “trade war” period – as shown, e.g., here – but one way greatly to boost the odds that tariffs don’t send prices upward would be to accompany trade restrictions with greater anti-trust enforcement that increases domestic competition, as I’ve argued here.)      

Tai advertised her and the broader Biden trade policy points as part of the former Vice President’s promise to “Build Back Better.” So far, though, the most charitable description of these is actually more like “Pretend More Assertively.”

Im-Politic: Looking Backward and Forward on Trump and Trumpism

13 Wednesday Jan 2021

Posted by Alan Tonelson in Im-Politic

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cancel culture, Capitol Hill, Capitol riots, China, climate change, Congress, Conservative Populism, Constitution, Democrats, election 2016, election 2020, election challenge, Electoral College, establishment Republicans, Hillary Clinton, identity politics, Im-Politic, Immigration, impeachment, incitement, insurrection, Joe Biden, Josh Hawley, left-wing authoritarianism, mail-in ballots, nationalism, Populism, Republicans, sedition, separation of powers, tariffs, Ted Cruz, Trade, trade war, Trump, violence

(Please note: This is the linked and lightly edited version of the post put up this morning.)

The fallout from the Capitol Riot will no doubt continue for the foreseeble future – and probably longer – so no one who’s not clairvoyant should be overly confident in assessing the consequences. Even the Trump role in the turbulent transition to a Biden administration may wind up looking considerably different to future generations than at present. Still, some major questions raised by these events are already apparent, and some can even be answered emphatically, starting off with the related topic of how I’m viewing my support for many, and even most, of President Trump’s policies and my vote for him in both of his White House runs.

Specifically, I have no regrets on either ground. As I’ll make clear, I consider Mr. Trump’s words and deeds of the last few weeks to represent major, and completely unnecessary, failures that will rightly at least tarnish his place in history.

All the same, legitimate analyses of many developments and resulting situations need to think about the counterfactual. Here, the counterfactual is a Trump loss to Democratic presidential nominee Hillary Clinton in 2016. And I’m confident that her presidency would have been both disastrous in policy terms (ranging from coddling China to moving steadily toward Open Borders immigration policies to intervening militarily more often and more deeply in numerous foreign conflicts of no importance to the United States) and heatedly divisive in political terms (because of her grifting behavior in fundraising for the various supposedly philanthropic initiatives she started along with her husband, former President Bill Clinton; because of her campaign’s payment for the phony Steele dossier that helped spur the unwarranted and possibly criminal Obama administration investigation of the Trump campaign; and because of intolerant and extremist instincts that would have brought Identity Politics and Cancel Culture to critical mass years earlier than their actual arrivals).

As for the worrisome events of the last several weeks:

>As I’ve written, I don’t regard Mr. Trump’s rhetoric at his rally, or at any point during his election challenges, as incitement to violence in a legal sense. But is it impeachable? That’s a separate question, because Constitutionally speaking, there’s a pretty strong consensus that impeachment doesn’t require a statutory offense. And since, consequently, it’s also a political issue, there’s no objective or definitive answer. It’s literally up to a majority of the House of Representatives. But as I also wrote, I oppose this measure.

>So do I agree that the President should get off scot free? Nope. As I wrote in the aforementioned post, I do regard the Trump record since the election as reckless. I was especially angered by the President’s delay even in calling on the breachers to leave the Capitol Hill building, and indeed the entire Capitol Hill crowd, to “go home.” In fact, until that prompting – which was entirely too feeble for my tastes – came, I was getting ready to call for his resignation.

>Wouldn’t impeachment still achieve the important objective of preventing a dangerously unstable figure from seeking public office again? Leaving aside the “dangerously unstable” allegation, unless the President is guilty (as made clear in an impeachment proceding) of a major statutory crime (including obstruction of justice, or incitement to violence or insurrection), I’d insist on leaving that decision up to the American people. As New York City talk radio host Frank Morano argued earlier this week, the idea that the Congress should have the power to save the nation from itself is as dangerously anti-democratic as it is laughable.

>Of course, this conclusion still leaves the sedition and insurrection charges on the table – mainly because, it’s contended, the President and many of his political supporters (like all the Republican Senators and House members who supported challenging Electoral College votes during the January 6 certification procedure) urged Congress to make an un-Constitutional, illegal decision: overturning an election. Others add that the aforementioned and separate charge not includes endorsing violence but urging the January 6 crowd to disrupt the certification session.

>First, there’s even less evidence that the lawmakers who challenged the Electoral College vote were urging or suggesting the Trump supporters in the streets and on the lawn to break in to the Capitol Building and forcibly end the certification session than there’s evidence that Mr. Trump himself gave or suggested this directive.

>Second, I agree with the argument – made by conservatives such as Kentucky Republican Senator Rand Paul (often a Trump supporter) – that authorizing a branch of the federal government unilaterally to nullify the results of elections that the Constitution stipulates should be run by the states is a troubling threat to the Constitutional principle of separation of powers. I’m also impressed with a related argument: that sauce for the goose could wind up as sauce for the gander.

In other words, do Trump supporters want to set a precedent that could enable Congress unilaterally to overturn the election of another conservative populist with something like a second wave of Russia collusion charges? Include me out.

>Further, if the Trump supporters who favored the Electoral College challenge are guilty of insurrection or fomenting it, and should be prosecuted or censured or punished in some way, shouldn’t the same go for the Democrats who acted in the exact same ways in other recent elections? (See here and here.) P.S. Some are still Members of Congress.

>Rather than engage in this kind of What About-ism, and help push the country further down the perilous road of criminalizing political behavior and political differences, I’d much rather consider these challenges as (peaceful) efforts – and in some cases sincere efforts – to insert into the public record the case that these elections were marred by serious irregularities.

>How serious were these irregularities? Really serious – and all but inevitable given the decisions (many pre-pandemic) to permit mass mail-in voting. Talk about a system veritably begging to be abused. But serious enough to change the outcome? I don’t know, and possibly we’ll never know. Two things I do know, however:

First, given the thin Election 2020 margins in many states, it’s clear that practices like fraudulent vote-counting, ballot-harvesting, and illegal election law changes by state governments and courts (e.g., Pennsylvania) don’t have to be widespread. Limiting them to a handful of states easily identified as battlegrounds, and a handful of swing or other key districts within those states, would do the job nicely.

Second, even though I believe that at least some judges should have let some of the Trump challenges proceed (if only because the bar for conviction in such civil cases is much lower than for criminal cases), I can understand their hesitancy because despite this low-ish bar, overturning the election results for an entire state, possibly leading to national consequences, is a bridge awfully far. Yes, we’re a nation of laws, and ideally such political considerations should be completely ignored. But when we’re talking about a process so central to the health of American democracy, politics can never be completely ignored, and arguably shouldn’t.

So clearly, I’m pretty conflicted. What I’m most certain about, however, is that mass mail-in ballots should never, ever be permitted again unless the states come up with ways to prevent noteworthy abuse. Florida, scene of an epic election procedures failure in 2000 (and other screwups), seems to have come up with the fixes needed. It’s high time for other states to follow suit.

As for the politics and policy going forward:

>President Trump will remain influential nationally, and especially in conservative ranks – partly because no potentially competitive rivals are in sight yet, and possibly because Americans have such short memories. But how influential? Clearly much of his base remains loyal – and given his riot-related role, disturbingly so. How influential? Tough to tell. Surely the base has shrunk some. And surely many Independents have split off for good, too. (See, e.g., this poll.) Perhaps most important, barring some unexpected major developments (which obviously no one can rule out), this withering of Trump support will probably continue – though the pace is tough to foresee also.

>The Republican Party has taken a major hit, too, and the damage could be lasting. In this vein, it’s important to remember that the GOP was relegated to minority status literally for decades by President Herbert Hoover’s failure to prevent and then contain the Great Depression. Those aforementioned short American memories could limit the damage. But for many years, it’s clear that Democratic political, campaigns, and conservative Never Trumper groups like the Lincoln Project, will fill print, broadcast, and social media outlets with political ads with video of the riot and Mr. Trump’s rally and similar statements, and the effects won’t be trivial.

>What worries me most, though, is that many of the urgently needed policies supported and implemented by the Trump administration will be discredited. Immigration realism could be the first casualty, especially since so many of the establishment Republicans in Congress were such willing flunkies of the corporate Cheap Labor Lobby for so much of the pre-Trump period, and Open Borders- and amnesty-friendly stances are now defining characteristics of the entire Democratic Party.

The Trump China policies may survive longer, because the bipartisan consensus recognizing – at least rhetorically – the futility and dangers of their predecessors seems much stronger. But given Biden’s long record as a China coddler and enabler, the similar pre-Trump views of those establishment Republicans, and their dependence on campaign contributions from Wall Street and offshoring-happy multinational companies, important though quiet backtracking, particularly on trade, could begin much sooner than commonly assumed. One distinct possibility that wouldn’t attract excessive attention: meaningfully increasing the number of exemptions to the Trump China and remaining metals tariffs to companies saying they can’t find affordable, or any, alternatives.

>Much of the political future, however, will depend on the record compiled by the Biden administration. Not only could the new President fail on the economic and virus-fighting fronts, but on the national unity front. Here, despite his reputation as a moderate and a healer, Biden’s charge that Republican Senators Ted Cruz and Josh Hawley have used Nazi-like tactics, and race-mongering comments accusing law enforcement of handling the overwhelmingly white Capitol Rioters more gingerly than the racial justice protesters earlier this year represent a lousy start. And as his harsh recent rhetoric suggests, Biden could also overreach greatly on issues like climate change, immigration, and Cancel Culture and Identity Politics. Such Biden failures could even shore up some support for Mr. Trump himself.

>How big is the violence-prone fringe on the American Right? We’ll know much more on Inauguration Day, when law enforcement says it fears “armed protests” both in Washington, D.C. and many state capitals. What does seem alarmingly clear, though – including from this PBS/Marist College poll – is that this faction is much bigger than the relatively small number of Capitol breachers.

>Speaking of the breachers, the nature of the crimes they committed obviously varied among individuals. But even those just milling about were guilty of serious offenses and should be prosecuted harshly. The circumstances surrounding those who crossed barriers on the Capitol grounds is somewhat murkier. Those who knocked down this (flimsy) fencing were just as guilty as the building breachers. But lesser charges – and possibly no charges – might be justifiable for those who simply walked past those barriers because they were no longer visible, especially if they didn’t enter the Capitol itself.

>I’m not security expert, but one question I hope will be asked (among so many that need asking) in the forthcoming investigations of the Capitol Police in particular – why weren’t the Capitol Building doors locked as soon as the approach of the crowd became visible? The number of doors is limited, and they’re anything but flimsy. The likely effectiveness of this move can be seen from an incident in October, 2018 – when barred Supreme Court doors left anti-Brett Kavanaugh protesters futilely pounding from the outside when they attempted to disrupt the new Supreme Court Justice’s swearing in ceremony. Window entry into the Capitol would have remained an option, but the number of breachers who used this tactic seems to have been negligible.

What an extraordinary irony if one of the worst days in American history mightn’t have even happened had one of the simplest and most commonsensical type of precaution not been taken.

Making News: Podcast Now On-Line of U.S. China Strategy National Radio Interview

12 Tuesday Jan 2021

Posted by Alan Tonelson in Making News

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alliances, allies, America First, China, globalism, Joe Biden, Making News, Market Wrap with Moe Ansari, multilateralism, national security, Trade, trade war, Trump

I’m pleased to announce that the podcast is now available of my interview yesterday with Moe Ansari on his nationally syndicated “Market Wrap” radio program. This was a real corker of a segment, turning into an awfully intense (but always civil!) debate about the best way for the United States to deal with the Chinese economic and national security threat – by relying on its own devices (a la, more or less, President Trump) or by building international coalitions (the preferred approach of President-elect Biden). Click here to listen and go to the “Current Market Wrap: link. My segment begins at about the 27-minute mark.

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

Making News: Podcast On-Line of NYC Impeachment & Economy Interview, New Appearance Coming Today … & a Correction

11 Monday Jan 2021

Posted by Alan Tonelson in Making News

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China, Frank Morano, impeachment, Making News, manufacturing, Market Wrap with Moe Ansari, Mueller Report, obstruction of justice, Republicans, tariffs, The Other Side of Midnight, Trade, trade war, Trump, Trump-ism, WABC AM

I’m pleased to announce that the podcast is now on-line of an interview last night in the wee hours on New York City’s WABC-AM’s “Other Side of Midnight” program. Click here for a timely conversation with host Frank Morano on the possibility of a Trump impeachment, the political impact of the Capitol riot, and what the latest official U.S. trade report told us about the health of the economy and the effects of Mr. Trump’s tariff-centric policies. (You’ll see my segment right at the top.) 

In addition, I’ll be discussing the same subjects later today on Moe Ansari’s nationally syndicated “Market Wrap” radio show. Click here and then on the “listen live” link on the right starting at a few minutes before 8 PM EST. My segment will probably begin about halfway into the hour-long program. And if you can’t tune in, as usual I’ll be posting a link to the podcast as soon as one’s available.

As for the correction, in yesterday’s post laying out the case against impeaching the President, I stated that the Mueller report into the Trump-Russia collusion charges presented on p. 89 of its second volume the argument that mitigating against accusing Mr. Trump of obstruction of justice was abundant evidence that the President lacked criminal or corrupt intent.

This argument was indeed made, but not on that page. Instead, you’ll find on pp. 7, 47, 51, 56, 57, 62, 76, 97 and 157, descriptions of episodes indicating that the President acted out of a genuine belief that he was being framed and due to other legitimate considerations.  And on p. 7, you’ll find the explanation that the obstruction statues require “consideration of [such] motives for his conduct.”  You can also read these passages in this post.

I apologize for the error and for any confusion caused. Thanks to the careful, sharp-eyed reader who caught the mistake!

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

(What’s Left of) Our Economy: More Manufacturing Jobs Strength – & Vindication of Trump Tariffs

08 Friday Jan 2021

Posted by Alan Tonelson in (What's Left of) Our Economy

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737 Max, aerospace, automotive, Boeing, CCP Virus, China, coronavirus, COVID 19, Employment, Jobs, machinery, manufacturing, manufacturing jobs, non-farm payrolls, pharmaceuticals, PPE, private sector, tariffs, Trade, trade war, Trump, vaccines, Wuhan virus, {What's Left of) Our Economy

This morning’s official U.S. jobs report, for December, shows that, to paraphrase that unforgettable battery ad slogan, domestic manufacturing just keeps hiring and hiring and….

As a result, the December data also add to the already compelling case that domestic industry’s continued resilience – including an ongoing hiring out-performance – owes significantly to the Trump tariffs that have prevented imports from China from flooding U.S. markets and massively depriving Made in America products of customers as they had before his presidency.

The nation’s manufacturers boosted their payrolls by 38,000 on month in December, even as the private sector shed 95,000 jobs and government at all levels lost 45,000.

Moreover, in line with the strong overall employment revisions for October and November, industry’s previously reported 33,000 hiring improvement for the former (which had already been downgraded from 38,000) is now judged to be 43,000. And November’s figure has been upgraded from 27,000 to 35,000.

Although this performance pales compared with the 333,000 jobs added in manufacturing in June, the sector continues to punch above its employment weight, and in fact has now won back a status it apparently had lost in the fall.

As of December, U.S.-based industry had regained 60.16 percent (820,000) of the 1.363 million jobs it had lost during the worst (so far) of the pandemic-induced downturn in March and April.

That’s slightly ahead of the total private sector, which has recovered 59.91 percent (12.696 million) of its 21.191 million drop last spring.

And its considerably ahead of the overall economy’s record. Non-farm payrolls (the definition of the American employment universe used by the Labor Department, which issues these jobs reports) have risen by 12.321 million since April, a bounceback reprsenting only 55.60 percent of their 22.160 million plunge that month and in March.

The big reason is the slump in government jobs at all levels, and especially in states and localities. Public sector employment sank by 45,000 sequentially in December and by 81,000 the month before. And the outlook for public sector employment remains clouded by the brightening (due to the nearly final 2020 election results) but still uncertain prospects for a federal bailout of state and local governments, whose December monthly job losses totaled 49,000. (The federal government actually added positions.)

Manufacturing’s biggest monthly employment winners in December were plastics and rubber products (up 6,900), the automotive sector (6,700), non-metallic mineral products (6,100), food manufacturing (5,500), and apparel (4,000).

Especially encouraging were the 2,800 jobs created by domestic machinery makers, since the equipment they make is so widely used throughout the rest of manufacturing and elsewhere in the economy. November’s on-month machinery jobs gains were revised up from 1,900 to 2,500, but October’s totals were revised down for a second time, from 3,000 to 2,700.

December’s biggest manufacturing job losers were miscellaneous non-durable goods (down 11,200 sequentially) and primary metals (down 2,100).

Also on the encouraging side: Better progress has been made in job-creation for the CCP Virus-related medical manufacturing categories. These only go through November, but they show that the the broad pharmaceuticals and medicines sector added 1,000 new jobs that month, and its October figure was upgraded all the way from 100 to 1,100.

In addition, the sub-sector containing vaccines increased payrolls in December by 1,100, and its October performance was revised up from 600 to 1,100.

But in the manufacturing category containing PPE goods like face masks, gloves, and medical gowns, along with cotton swabs, the previously reported October employment increase stayed unreivsed at 400, and the November growth was only 500.

These results, however, still mean that the PPE category’s job gains since February have been much stronger (7.85 percent) than those of the vaccines category (a disappointing 2.82 percent) and of the broader pharmaceuticals industry (an even weaker 1.40 percent).

Finally, other than the prospect of a vaccine-related return to normal in the U.S. and global economies (for domestic manufacturing is a big exporters), the biggest reason for further manufacturing employment optimism concerns the aerospace sector. It’s been pummeled by both the pandemic-induced nosedive in air travel around the world, and by Boeing’s safety woes.

The U.S. aerospace giant isn’t out of the woods yet. Its troubled 737 Max model has now been recertified by the federal government as safe to return to flight, but new production-related problems have cropped up, too. Moreover, who can say with any confidence when “normal,” or enough of it to help, Boeing, returns?

Yet assuming some substantial Boeing recovery in the foreseeable future, a major restart of its own manufacturing could give a big boost to domestic industry as a whole, given its many and long domestic supply chains.

Im-Politic: Big Media Praise for Trump’s Trade and Manufacturing Policies…Post-Election

31 Thursday Dec 2020

Posted by Alan Tonelson in Im-Politic

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Biden, Bloomberg.com, Carrier, China, election 2020, Im-Politic, Indiana, Jobs, Mainstream Media, manufacturing, Mexico, Nelson D. Schwartz, tariffs, The New York Times, Trade, trade war, Trump, Trump Derangement Syndrome

Boy, here are two Mainstream Media articles that President Trump and his supporters (like me) sure would liked to have seen come out before Election Day in November rather than afterwards. Not that their appearance would have made much difference in the apparent outcome. But they did resoundingly vindicate high-profile Trump decisions that epitomized his approach to the trade and manufacturing issues so central to his agenda, and that were roundly criticized by his opponents – including apparent President-elect Joe Biden and union leaders.

The first came from Bloomberg.com, and it declared on December 20 that “Biden Will Inherit a Strong Hand Against Xi, Thanks to Trump.” That header was nearly as much of a stunner as the lead sentence: “Joe Biden will take office next month wielding more leverage over Beijing than he would have ever sought.” And the first reason cited? “Biden will be sworn in as president after Trump’s administration spent years ramping up pressure on China, including levying tariffs on $370 billion in imports….”

I call these statements stunners not because I don’t believe them, or because you may not believe them. Instead, they’re stunners on two main counts.

First, the apparent President-elect himself apparently doesn’t believe them. After all, he claimed earlier this year that, because of the Trump trade curbs, “Manufacturing has gone into a recession. Agriculture lost billions of dollars that taxpayers had to pay.” And last year, he argued that “President Trump may think he’s being tough on China. All that he’s delivered as a consequence of that is American farmers, manufacturers and consumers losing and paying more.”

Obviously, no one who really put any stock into these propositions could possibly also believe that such self-defeating moves could be of much use against foreign antagonists. Employing them or even threatening to employ them would be tantamount to vowing to hold your breath until you get what you want.

Maybe Biden regards the costs created by the Trump tariffs as smaller than the pain they’ve inflicted on China, and/or that they’re a reasonable price to pay for advancing or protecting U.S. interests threatened by China? Maybe. But the former Vice President has never made those points. At the same time, he’s also (since the election) decided to keep the tariffs in place pending a policy review. That makes no sense, either, if he really views them as an unmitigated disaster, and as a result, it will be fascinating to see if his deeds as President match these lastest words.

What seems certain, though, is that the political impact of a pre-election Biden acknowledgment that the trade levies have served any useful purpose would have had an awfully interesting impact on those manufacturing-heavy Midwestern battleground states that swung so narrowly back into the Democrats’ presidential corner after backing Mr. Trump in 2016.

But the Bloomberg article was also stunning because the folks at Bloomberg themselves never seemed to believe that the Trump tariffs did any good for Americans. For example, in September, 2019, a Bloomberg analysis (by a different author, but it ultimately was approved by the same editors) contended that “China is Winning the Trade War with Trump” because “On just about every metric that matters, China is ahead. At every turn, Trump seems to have been outplayed and outsmarted throughout the global trade war that began shortly after he took office.”

Two months later, Bloomberg readers were treated to this header: “How Trump’s Trade War Went From Method to Madness.” And let’s not forget December 10, 2019’s article with the news that “Trump’s China Tariffs Boomerang on America” because “Thanks to trade wars, companies are skimping on new U.S. plants and equipment.” Maybe I’m missing something, but none of these developments sounds like a source of leverage to me.

The second stunner article came out two days after Bloomberg‘s post-election paean to Trump-created trade leverage, and concerned the President’s efforts, which began early in his first White House run, to save jobs at Carrier manufacturing facilities in Indiana that were slated to be moved to Mexico. As a December 18 piece by New York Times reporter Nelson D. Schwartz reminded, the saga began with the company’s announcement in February, 2016 that was closing an Indianapolis furnace factory and sending its operations – and of course jobs – south of the border, where wages are much lower.

Candidate Trump quickly seized on the situation as a perfect example of how the offshoring-friendly trade policies of recent establishment Presidents, like the North American Free Trade Agreement were shortsightedly hollowing out the U.S. industrial base, and enriching executives and stockholders at the expense of American workers. And he quickly declared that, if elected, he would force the company to reverse the decision and save the jobs.

A not neligible firestorm ensued, with economists insisting that Mr. Trump’s actions amounted to pointless at best and bad at worst economics, and the usual gang of free market zealots in the media and think tank worlds condemning the candidate for seeking to move the United States well down the road to socialism and even worse. At least one local union leader called the arrangement reached by the then-President elect a “phony operation” and “a dog and pony show.”

And I wasn’t crazy about the specific measures eventually used by Mr. Trump to keep much of Carrier in Indiana, either – arguing that although such jaw-boning had major uses, tariffs were greatly preferable to the tax breaks that kept some of the company’s work and employment in the Hoosier State.

To their credit, Schwartz and other reporters didn’t forget about the story, but their follow-ups were overwhelmingly downbeat. (See, e.g., here, here, and here.) Schwartz’ own coverage sounded pretty grim, too. (See, e.g., here and here.)

So imagine my surprise to read the December 18 article’s headline proclaim that the “Carrier Plant is Bustling” and the text inform readers that

> “The assembly line is churning out furnaces seven days a week”;

>“overtime is abundant”;

>“Carrier has been hiring, adding some 300 workers and bringing the total work force to nearly 1,050”;

>”the Indianapolis plant offers a shot at a solidly middle-class lifestyle, with wages of more than $20 an hour, with time-and-a-half pay on Saturdays and double-time on Sundays”; and that 

>”it’s clear that without Mr. Trump’s intervention even before he took office, the factory would never have become so prominent, if it had survived at all.”

Yes, Schwartz also noted that Carrier workers still feel highly insecure. But he also made clear that the reason is because they don’t trust Biden to look after them the way the President has.

As RealityChek has documented time and again, the Mainstream Media has displayed more than its share of Trump Derangement Syndrome over the last four years. Now that the President seems certain to leave office, is a wave of Trump Revisionism Syndrome in store?

(What’s Left of) Our Economy: New Evidence that Trump’s Tariffs Have Bolstered U.S. Manufacturers

23 Wednesday Dec 2020

Posted by Alan Tonelson in (What's Left of) Our Economy

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Tags

aluminum, CCP Virus, China, coronavirus, COVID 19, GDP, gross domestic product, inflation-adjusted growth, lockdowns, manufacturing, metals, metals tariffs, real GDP, real value-added, recession, steel, tariffs, Trade, trade war, Trump, value added, Wuhan virus, {What's Left of) Our Economy

As everyone knows, at least as of the final (for now) official third quarter growth figures just released, the entire U.S. economy remains in a severe recession thanks to the arrival of the CCP Virus and the subsequent tight curbs on business activity.

Less widely known:  A separate set of official figures released along with yesterday’s government release on third quarter gross domestic product (GDP) shows that, by the measures most closely watched (i.e, inflation-adjusted), domestic manufacturing never suffered a recession by one crucial definition – a cumulative downturn lasting at least two quarters. And can it be mere coincidence that the entire time, President Trump’s sweeping and steep tariffs on hundreds of billions of dollars worth of Chinese goods, and of steel and aluminum from most major foreign producers, have remained in place?

Below are the growth (and contraction) figures for the entire U.S. economy and for the manufacturing sector for the entire CCP Virus period so far – the first quarter through the third quarter of this year. They come from the Commerce Department’s data on four measures of output tracked by the folks who look at “GDP by Industry” and consist of gross output both pre-inflation and adjusted for price changes, and value-added (a gauge of production that tries to remove the double-counting that results from gross output’s inclusion of both inputs for products and services and the final products and services themselves) in pre-inflation and price-adjusted terms. All the non-percentage numbers are in trillions of dollars at annual rates.

                                                      1Q                2Q                3Q            1Q-3Q

v/a whole economy:                 21.5611        19.5201        21.1703    -1.81 percent

v/a manufacturing:                     2.3643          2.0537          2.3291    -1.49 percent

real v/a whole economy           19.0108        17.3025        18.5965    -2.18 percent

real v/a manufacturing:              2.1999          1.9629          2.2132   +0.60 percent

gross output whole econ          37.8268        34.2600         36.9425    -2.34 percent

gross output mfg                        6.1163          5.3334           6.0134    -1.68 percent

real g/o whole economy           34.2613        31.3989         33.4440    -2.39 percent

real g/o manufacturing               6.2038          5.6162           6.2089    +0.08 percent

Probably the most important of these results is real value-added, since its topline economy-wide numbers are identical to the inflation-adjusted GDP figures regarded as the most important measures of economic growth. And in real value-added terms, manufacturing output in the third quarter was actually slightly (0.60 percent) higher than in the first quarter. Manufacturing expansion has also taken place according to the real gross output figures, though it’s been marginal.

Also crucial to note although both pre-inflation measures show first-third quarter cumulative manufacturing downturns, they’ve been shallower in both cases than the economy-wide slumps.

It’s true that the virus and related shutdowns have more dramatically impacted the service sector when it comes to first-order effects – because so many service industries entail personal contact. But the case for the tariffs’ benefits for manufacturing looks compelling upon realizing that U.S. services companies are major customers of domestic manufacturers. So although the virus obviously crimped these markets, it seems that the tariffs preserved a good many of them by pricing out much Chinese and foreign metals competition.

One way to test this proposition, of course, would be for apparent President-elect Joe Biden to lift the levies while the pandemic keeps spreading. Unless powerful evidence comes in to the contrary, manufacturers, their employees, and indeed all Americans should be hoping this is a bet Biden won’t make.

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