Making News: CNBC Video of Trump Trade War Interview Now On-Line!

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Cato Institute, China, CNBC, Dan Ikenson, Making News, Melissa Lee, Michele Caruso-Cabrera, North Korea, nuclear weapons, Power Lunch, Trade, trade wars, Trump, Tyler Mathisen

I’m pleased to report that the video of my CNBC interview today on President Trump’s China trade policies is now on-line. Click here for a great discussion among CNBC anchors Tyler Mathisen, Michele Caruso-Cabrera, Melissa Lee, the Cato Institute’s Dan Ikenson, and me on the prospects of a U.S.-China trade war and on the wisdom of linking these trade policies to Beijing’s effectiveness in helping to curb North Korea’s nuclear weapons program.

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

 

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Making News: John Batchelor Show Podcast on China Trade War Interview Now On-Line!

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China, Gordon Chang, Making News, The John Batchelor Show, Trade, trade wars, Trump

I’m pleased to report that the podcast is now on-line of my appearance last night on John Batchelor’s nationally syndicated radio show. Click here for a great discussion among John, me, and co-host Gordon Chang about recent rumblings in Washington about the chance that President Trump will start a trade war with China.

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

Making News: Thom Hartmann Interview Video – & More!

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globalization, Lifezette.com, Making News, North Korea, RT America, The Big Picture with Thom Hartmann, The Laura Ingraham Show, Thom Hartmann, Trade, trade wars, Trump

I’m pleased to report that the video is now on-line of my interview last night on RT America’s “The Big Picture with Thom Hartmann,” which covered the latest twists and turns of President Trump’s trade policies. Click here for a wide-ranging discussion of trade war prospects, China, steel, and national defense. The segment begins at the very beginning and yes, it’s the right link despite the Stephen Hawking picture you see right way!

Unfortunately, I was notified a little while ago that this morning’s scheduled interview on “The Laura Ingraham Show” has been cancelled because of technical difficulties with its production facilities.  I’ll let you know as soon as it’s rescheduled.

But it was great as always to be interviewed for an article on Laura’s Lifezette.com website.  Click here for a piece that features my views on the North Korea crisis.

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

Making News: New Articles Appear on Marketwatch and Lifezette

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alliances, allies, Financial Crisis, Global Imbalances, Lifezette.com, Making News, Marketwatch.com, North Korea, nuclear weapons, South Korea, tariffs, Trade, trade wars, Trump

I’m pleased to report the publication of two new op-ed pieces over the last week.

Today, Marketwatch.com published my column explaining why President Trump should portray any new hard line trade moves as doses of tough love needed to ensure sustainable worldwide growth, rather than narrow-minded America First-type measures.  Here’s the link.

And last Thursday, Lifezette.com ran my call for a thoroughgoing overhaul of the U.S. security alliance with South Korea – before North Korea becomes unmistakably able to strike the American homeland with nuclear weapons.  Read the piece at this link.

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

 

(What’s Left of) Our Economy: Trump’s Globalization Promises are Already Producing Victories

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Canada, China, Digitimes, H1B visas, Immigration, India, Infosys, Mexico, NAFTA, Reuters, Taiwan, Trade, Trade Deficits, trade surpluses, trade wars, Trump, {What's Left of) Our Economy

America’s political and media establishments keep warning of the disastrous consequences of President-elect Donald Trump’s vow to conduct international economic policy by in effect telling U.S. competitor countries and offshoring multinational companies to “Jump.” And rather than responding indignantly by promising to resist or retaliate and touch off a series of international trade wars and other conflicts, businesses in these countries keep responding by in effect asking “How high?”

As a result, they keep adding to the already copious body of evidence indicating that the United States boasts more than enough leverage (thanks to the matchless power of its market) to achieve better terms of trade unilaterally. Here are two of the latest examples.

Yesterday, the reliable Taiwanese technology publication Digitimes reported that “US-based high-tech enterprises are expected to reduce their reliance on data centers abroad and add ones in the US.” In addition, the Digitimes piece quoted a Taiwanese tech magnate speculating – reasonably – that tech companies (like his) that have already built significant manufacturing capacity in the United States will have advantages over more foreign-centric competitors – who will “have to evaluate the feasibility of shifting factories from Mexico or other areas to the US….”

Meanwhile, on Sunday, Reuters quoted the COO of the Indian tech services giant Infosys as stating that because they expect Mr. Trump to curb significantly the visa programs that enable American tech companies to replace U.S. workers with low-paid imported Indian counterparts, companies such as his will “speed up acquisitions in the United States and recruit more heavily from college campuses there.”

Specifically, according to this Indian executive, “We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities [in the United States].”

Previously, it should be noted, both Canada and Mexico announced in the wake of the Trump victory that they would indeed be willing to renegotiate or “discuss” NAFTA.

China may still apparently believe it can bluff Mr. Trump. But good luck to Beijing and its still export-heavy economic growth strategy if it thinks it can find foreign markets to substitute for America’s, with which it ran a $367 billion goods trade surplus last year. Good luck also to China’s efforts to maintain political stability if, as likely, declaring a trade war on such a crucial foreign customer raises unemployment.

America’s economic competitors are fully aware that its enormous trade surpluses have fueled much of their own, and global, growth for decades. The biggest change on this front represented by Trump’s election is that now a U.S. president clearly understands – and has been publicly touting – this indisputable reality as well.  In otherwise, for the first time in decades, America is led by someone well versed in “the art of the deal.”   

(What’s Left of) Our Economy: Are China’s Trade Delusions Growing?

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Andrew Browne, China, manufacturing, tariffs, The Wall Street Journal, Trade, trade surplus, trade wars, Trump, {What's Left of) Our Economy

It looks like China’s leaders have been swallowing a lot of their own propaganda about its rise to global prominence and its place in the world economy in particular. And since his election as president a week ago, these delusions of grandeur have surely been fed by tremulous predictions by the usual globalization cheerleaders that the United States – or at least many Americans – will lose big in any bilateral trade war Donald Trump might start.

How else to explain the warning issued by a state-run Chinese newspaper on Sunday that any Trump tariffs on Chinese goods will be met with a “tit-for-tat” response that would include the following consequences:

“A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.”

And how Beijing must have chortled today when it read Wall Street Journal columnist Andrew Browne’s argument that

“Nobody wins in a trade war. If Donald Trump sparks one with China, among the losers will be some of his most ardent supporters: blue-collar workers who helped sweep him to election victory.

“In fact, they’ll stand to lose twice. They’ve already endured stagnant incomes for decades amid withering trade competition from China. Mr. Trump’s threatened tariffs of 45% on all Chinese imports would hit their pocketbooks again by raising the price of pretty much everything on sale in Wal-Mart, from sneakers to microwave ovens.”

“In fact,” if the Chinese newspaper writers really are reflecting their political leaders’ views, then their grip on reality is totally gone. For example, will the United States really be the only country that suffers if iPhone sales in the PRC are limited? Last I checked, nearly all these devices were assembled in China, where Apple and especially subcontractors are mass employers. Further, the Chinese content of manufactured goods across-the-board keeps rising, so Chinese workers across long domestic supply chains would be hit as well.

And limits on Chinese students in the United States? Is that a promise or a threat? First of all, for all of its recent advances, China still lags far behind America in terms of science and technology. China’s therefore clearly the big loser if Beijing denies its people access to that knowledge. Second, if China’s higher education system was such great shakes, why would the country’s plutocrats be so anxious to send their kids of American colleges and universities? Third, as Beijing knows best of all, many of the students it sends here are spies. Like it’s going to cut off such intelligence collection voluntarily? Finally, as I’ve written, as Chinese students have flooded into American education, so have China’s corrupt values.

More important, let’s not forget the broader economic context. Although it’s down some since 2015, China is still on course to run a nearly $350 billion trade surplus with the United States this year. And not only is trade more crucial to China’s growth than it is to America’s (and more important than official figures indicate), but that growth in turn is vital to China’s stability – and to the personal fortunes of its dictators and oligarchs. So could we please stop with the claims that these same Chinese leaders are going to launch a commercial attack on its top customer on net by far?

And when it comes to individual contracts, it’s not like the United States lacks options with other countries that would be tempted to seize the opportunity to replace American producers in the ranks of exporters to China. For most of these countries depend heavily on the U.S. market, too. Washington would have ample power to tell them credibly, “If you abet China’s retaliatory tactics, you can forget about trading with us.”

China of course is not devoid of clout. But it clearly still has much less than America’s. Here’s hoping a canny negotiator like President-elect Trump truly does recognize the real balance of global power, and moves vigorously to capitalize on America’s advantages while they last.

Im-Politic: Is Trump’s Wall Plan Unrealistic, or All Too Realistic?

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2016 election, capital equipment, Donald Trump, export-led growth, Im-Politic, Immigration, Mexico, remittances, The New York Times, Trade, trade wars, Vicente Fox, wall, Will Olney, Williams College

Since Donald Trump revealed key details behind his proposal to deal with illegal immigration from Mexico by building a wall along America’s southern border, I’ve been waiting for the critics to make abundantly clear why the plan is nuts. Judging from recent attacks from Mexico and in The New York Times, it looks like the wait will be lengthy.

The looniest claim by far is that Mexico would launch a “trade war” with the United States if the Republican front-runner won the White House and used tariffs on Mexico’s exports to the United States to fund the project. This prospect has been raised by no less than former Mexican President Vicente Fox, who told the Associated Press, “Let’s suppose he establishes tariffs, just imagine. We put tariffs on the (hundreds of billions of) dollars that the United States sells to Mexico.’’

It seems that in his golden years, Fox has forgotten that the United States buys nearly 80 percent of Mexico’s exports annually. So that export-dependent economy is going to antagonize its best customer by far? And at a time when sluggish world growth means that no other markets could possibly substitute for America’s? Rotsaruck with that.

Fox also ignores the huge share of U.S. goods exports to Mexico (at least half in 2015) that consists of capital equipment and various other industrial inputs – i.e., the building blocks of Mexico’s export-focused manufacturing base. Talk about cutting off one’s nose, etc. And although it’s true that Mexico could find other suppliers, its own demand for such machinery, equipment, and materials would practically vanish if its access to the U.S. market was lost or greatly reduced.

Equally silly was the op-ed in yesterday’s Times by Williams College economist Will Olney, who argued that if America could overcome the (formidable) legal, financial, and logistical obstacles to financing the wall a la Trump, the plan could harm the United States as much as Mexico. Unfortunately, the two main reasons he provided hold no water.

First, according to Olney, paying for the wall by effectively halting Mexican immigrants’ remittances back home could prevent these immigrants from helping their relatives “invest in education, start businesses and get out of poverty.” As a result, “withholding this money may actually encourage immigration to the United States.” But what seems to have slipped Olney’s mind is that regardless of more adverse economic conditions in Mexico, migrant flows from south of the border logically wouldn’t change once the wall was built because migrants would…face a wall.

Olney would have been better advised to note that bigger migration flows could be expected while the wall was still incomplete. But there’s a fly in this ointment, too: Even though Mexicans have been streaming to the United States legally and illegally for many years, and sending money back home, the impact on Mexican poverty seems unimpressive. For half the country’s population is still classified as poor.

More nonsensical is Olney’s claim that “Banning remittances could also reduce incentives for the best and brightest immigrants to come to the United States. Without the opportunity to provide for their family and friends back home, many talented immigrants might choose to move elsewhere. “ But no one is talking about banning or curbing remittances to any country other than Mexico. And there’s no shortage of the best and the brightest from elsewhere knocking – legally – on America’s door.

Moreover, even remittances to Mexico wouldn’t be banned forever, or even for very long. Under Trump’s plan – which calls for banning remittances only from illegal U.S. residents from Mexico – all restrictions would be lifted once a “one-time payment of $5-$10 billion” to finance wall construction is made by Mexico’s government.

Trump’s wall-financing proposal may indeed founder on many of the aforementioned legal, financial, and logistical obstacles – like keeping track of wired money transfers, and distinguishing between those that will be permitted those singled out for blocking. And the wall itself may prove unfeasible for similar reasons. But it’s also quite possible that these barriers can be overcome – and that Trump’s critics don’t mainly object to the wall because it can’t work, but because it can.