Saturday, June 2, 2018

Trump's insane trade war By Jeffrey Sachs // American farmers worry they'll pay the price of Trump's trade war

Maybe Donald Trump really is the Manchurian Candidate, a stooge of some foreign potentate. Much more likely, Trump is just mentally unstable and narcissistic. Whichever it is, Trump is rapidly destroying American global leadership, alliances, and interests. Wednesday's announcement of new tariffs on steel and aluminum exports from Canada, Mexico, and the European Union is the latest bizarre and self-destructive move. I have just returned from a trip to Europe. Across Europe, there was not a single word of respect for Trump. The constant refrain was extreme puzzlement and deep consternation. How did America fall so far so fast? What do we need to do to survive?

Trump's so-called policies are not really policies. Trade wars are on, off, on hold, on again, within the span of days. Summits are on, canceled, or maybe on. Foreign companies are sanctioned today and rescued the next. He says one day he would like to see overseas troops called home soon, and tells them to stay the next. Global agreements and rules are ripped to shreds. Trump's garbled syntax and disorganized thoughts are impossible to follow.

American farmers worry they'll pay the price of Trump's trade war
Farmers are often the first to feel the hit in trade disputes that may not involve their own products, said Salmonsen. This time, the scale of the dispute could hardly be worse: US agricultural exports are worth about $140bn a year. Canada and Mexico import about $39bn worth, China’s share is $20bn and the EU around $12bn. All those countries have threatened retaliation over metal tariffs.

The US has probably never before had a delusional President, one who speaks gibberish, insults those around him including his closest associates, and baffles the world. By instinct, we strive to make sense of Trump's nonsense, implicitly assuming some hidden strategy. There is none. Trump's trade actions are blatantly illegal. They are flimsily justified as an act of national security, but this is sheer nonsense. They are also fatuous in terms of US economic and geopolitical interests. Harming our closest allies, raising the prices on key intermediate products, and provoking retaliation cannot possibly deliver higher wages, better jobs, or an improved trade balance. Trump's latest notion to slap tariffs on German automobiles would be even more damaging geo-politically.

Trump creates chaos for no reason other than his own flagrant inability to follow rules or respect the interests of others. His is a psychopath's trade war. The result will be to undermine the long-term role of the dollar; ratchet up the public debt; and undermine the current expansion through a spiral of protectionist measures and rising uncertainties for business. Trump's casual threats of a hot war with Iran or North Korea if his various demands are not met are of course even more dangerous. The real answer to Trump's trade (and other) policies is the 25th Amendment. Trump is unwell and unfit to be President. He is a growing threat to the nation and the world. The emperor had no clothes. This President has no sense.
https://edition.cnn.com/2018/06/01/opinions/trumps-insane-trade-war-sachs/index.html