Trump forcefully caps off years of deterioration in European-American ties.
.. This trans-Atlantic partnership was a vast historical accomplishment, a stumbling and imperfect effort to extend democracy, extend rights, extend freedom and build a world ordered by justice and not force. Since 1945 it is the thing we have all taken for granted.
Over the weekend, Trump ripped the partnership to threads. He said the European Union is our “foe.” On Monday, Trump essentially sided with Vladimir Putin, who has become the biggest moral and political enemy of the Euro-American relationship. Trump essentially dropped a project that has oriented American culture and policy for centuries. He pointed us to a world in which the central ethos is that might makes right.
.. Progressives fell into the poisonous trap of racialism. They looked at the glories of Aristotle, Shakespeare and Mozart, and the most interesting thing they had to say about them was that they were dead white males. Future historians will marvel at how sophisticated people willfully made themselves so simple-minded. Eurocentrism became a code word for colonialism, oppression and privilege, taking a piece of European history for the whole of it.
Europeans didn’t help. In the wake of the Cold War, they have dedicated themselves to a post-nationalist project that is too top-down and technocratic and is now crumbling.
.. Trump could have gone to last week’s NATO summit and taken credit only for increased European military spending. Instead, he moved the goal posts, humiliated the Europeans, reasserted his trade war talk and made it impossible for European leaders to do anything that might seem to support him. These are the actions of a man who wants the alliance to fail.
His embrace of Putin Monday was a victory dance on the Euro-American tomb.
“This is not just another family quarrel,” Kagan writes. “The democratic alliance that has been the bedrock of the American-led liberal world order is unraveling. At some point, and probably sooner than we expect, the global peace that that alliance and that order undergirded will unravel, too. Despite our human desire to hope for the best, things will not be okay.”
Harley-Davidson, Blaming E.U. Tariffs, Will Move Some Production Out of U.S.
As President Trump pursues a protectionist trade policy, he has pointed repeatedly to Harley-Davidson, the iconic American motorcycle manufacturer, as a company that will ultimately benefit.
Instead, it is getting caught in the crossfire.
.. While Mr. Trump says his trade policy is aimed at reviving domestic manufacturing, Harley-Davidson’s move shows how the White House approach could backfire as American companies increasingly rely on overseas markets for materials, production and sales.
.. On Monday, the company said the tariffs on its motorcycles had increased to 31 percent from 6 percent, adding, on average, $2,200 to every motorcycle exported from the United States to Europe.
.. Speaker Paul D. Ryan, a Wisconsin Republican, said on Monday that Harley-Davidson’s decision was evidence that raising trade barriers was a bad idea.
.. estimated that fewer than 10 percent of Harley-Davidson’s motorcycles were manufactured abroad.
Lobsters, Small-Batch Whiskey and Trump’s Trade War
The cascade of tit-for-tat tariffs has spooked corporate executives, potentially slowing investment, and the Federal Reserve suggested this week that it might have to rethink its economic forecasts if the trade wars continue.
.. The economy is booming, but Mr. Skarich said he was not reaping the benefits. Instead, as a result of Mr. Trump’s trade policies, Mr. Skarich said his nail company may soon be out of business.
.. Mid Continent, the largest American producer of nails, imports steel from Mexico to make its nails. That steel is now subject to the 25 percent tariffs that Mr. Trump imposed on dozens of countries, forcing Mid Continent to raise its prices by nearly 20 percent.
.. Orders have plummeted by 50 percent this month as the company tries to compete with cheaper foreign-made nails. Those foreign manufacturers are not facing higher steel costs, giving them an advantage over Mid Continent.
.. While Mr. Trump might propose that Mid Continent simply buy American-made steel, it might not be so simple: Mr. Skarich notes that the cost of American-made metal is much higher than what the company had been importing from Mexico, meaning it would still have to raise prices for its nails if it used domestic steel.
.. “He ran on ‘Make America Great Again,’ and the point was to defend and protect jobs in the United States,” Mr. Skarich said. “Now here is an action he decides to take that has the potential to cost 500 U.S. citizens their jobs.”
.. China is expected to impose an additional 25 percent tariff on American lobster.. Trump’s policy was having the unintended effect of further helping Canada’s lobster market, which doesn’t face the same duties when selling to China... For several years, the cranberry industry has been struggling with an oversupply problem that has been eased somewhat by exporting juice and berries to Europe and elsewhere... Wisconsin is one of the world’s biggest cranberry producers and is the home state of Representative Paul D. Ryan.. exports to Europe were about $127 million last year.. European tariffs on peanut butter will be a blow for the makers of Peter Pan and Skippy spreads, but it is peanut farmers in Republican-leaning states like Georgia, Alabama, Florida and Mississippi who could struggle the most... The United States and China are the biggest peanut butter exporters in the world, according to the Department of Agriculture, and European tariffs would likely give China an edge in expanding its market share... “If this can give him some leverage to get a deal made, they’d be all for that,” Mr. Broome said. “If it doesn’t work and he’s miscalculated, then it could be a different story.”
Can the Euro Be Saved?
Across the eurozone, political leaders are entering a state of paralysis: citizens want to remain in the EU, but they also want an end to austerity and the return of prosperity. So long as Germany tells them they can’t have both, there can be only one outcome: more pain, more suffering, more unemployment, and even slower growth.
.. The backlash in Italy is another predictable (and predicted) episode in the long saga of a poorly designed currency arrangement, in which the dominant power, Germany, impedes the necessary reforms and insists on policies that exacerbate the inherent problems, using rhetoric seemingly intended to inflame passions... Italy has been performing poorly since the euro’s launch. Its real (inflation-adjusted) GDP in 2016 was the same as it was in 2001... From 2008 to 2016, its real GDP increased by just 3% in total... the euro was a system almost designed to fail. It took away governments’ main adjustment mechanisms (interest and exchange rates); and, rather than creating new institutions to help countries cope with the diverse situations in which they find themselves, it imposed new strictures – often based on discredited economic and political theories.. The euro was supposed to bring shared prosperity, which would enhance solidarity and advance the goal of European integration. In fact, it has done just the opposite, slowing growth and sowing discord... Emmanuel Macron, in two speeches, at the Sorbonne last September, and when he received the Charlemagne Prize for European Unity in May, has articulated a clear vision for Europe’s future. But German Chancellor Angela Merkel has effectively thrown cold water on his proposals, suggesting, for example, risibly small amounts of money for investment in areas that urgently need it... In my book, I emphasized the urgent need for a common deposit insurance scheme, to prevent runs against banking systems in weak countries... The central problem in a currency area is how to correct exchange-rate misalignments like the one now affecting Italy. Germany’s answer is to put the burden on the weak countries already suffering from high unemployment and low growth rates... The alternative is to shift more of the burden of adjustment on the strong countries, with higher wages and stronger demand supported by government investment programs... Matteo Salvini, the party’s leader and an experienced politician, might actually carry out the kinds of threats that neophytes elsewhere were afraid to implement. Italy is large enough, with enough good and creative economists, to manage a de facto departure – establishing in effect a flexible dual currency that could help restore prosperity... Whatever the outcome, the eurozone will be left in tatters... It doesn’t have to come to this. Germany and other countries in northern Europe can save the euro by showing more humanity and more flexibility. But, having watched the first acts of this play so many times, I am not counting on them to change the plot.