Increasing protectionism is unlikely to override forces of automation
The US did indeed lose about 5.6m manufacturing jobs between 2000 and 2010. But according to a study by the Center for Business and Economic Research at Ball State University, 85 per cent of these jobs losses are actually attributable to technological change — largely automation — rather than international trade.
How to Revive Central America
To succeed, it will have to break with the State Department’s conventional wisdom that underdevelopment is caused by a paucity of taxes and regulation. It will also have to climb down from its view that trade is a zero-sum game.
.. Failure to create jobs and grow, and the heavy concentration of businesses in the consumer sector, reflects the difficulty Guatemalan entrepreneurs have in getting credit. That’s not unusual in an economy in which more than 72% of businesses operate underground and therefore cannot access the formal banking system.
.. Guatemala ranks 88th out of 190 countries world-wide for ease of running an enterprise, but in key categories that make up the index it performs much worse.
.. The survey finds that it takes 256 hours to comply with the tax code. The total tax take is 35.2% of profits. It takes almost 20 days to start a legal enterprise and costs 24% of per capita income. To enforce a contract it takes more than 1,400 days and costs more than 26% of the claim.
.. at home the state is hostile to business and disrespectful of property rights. As a result, most new ventures see the cost of formality as outweighing the benefits.
.. Nor is Trump protectionism going to help Mr. Tillerson turn Central America around. Companies won’t want to manufacture in the region if they don’t have access to the U.S. market.
Oh! What a Lovely Trade War
Trump, supported by his inner circle of America Firsters, is “hell-bent” on imposing punitive tariffs on imports of steel and possibly other products, despite opposition from most of his cabinet. After all, claims that other countries are taking advantage of America were a central theme of his campaign.
And Axios reports that the White House believes that Trump’s base “likes the idea” of a trade war, and “will love the fight.”
Yep, that’s a great way to make policy.
.. a lot of modern trade is in intermediate goods — stuff that is used to make other stuff. A tariff on steel helps steel producers, but it hurts downstream steel consumers like the auto industry. So even the direct impact of protectionism on jobs is unclear.
.. Normally, in fact, trade and trade policy have little if any effect on total employment. They affect what kinds of jobs we have; but the total number, not so much.
.. There’s an old joke about a motorist who runs over a pedestrian, then tries to fix the damage by backing up — running over the victim a second time. Trumpist trade policy would be like that.
.. the tariffs now being proposed would boost capital-intensive industries that employ relatively few workers per dollar of sales; these tariffs would, if anything, further tilt the distribution of income against labor.
.. Trump’s promises on trade, while unorthodox, were just as fraudulent as his promises on health care.
Canada’s Trump Strategy: Go Around Him
Laid in the first days after Mr. Trump’s election win, the plan even enlists Brian Mulroney, a former Conservative prime minister and political nemesis of Mr. Trudeau’s father, who had also been prime minister. Mr. Mulroney knows Mr. Trump and his commerce secretary, Wilbur Ross, from social circuits in southern Florida, where all three keep vacation homes.
.. Though emphasizing the benefits of harmony, the Canadians are not above flexing muscle, with a provincial government at one point quietly threatening trade restrictions against New York State.
.. His new foreign minister, Chrystia Freeland, a former journalist with long experience in the United States and an unapologetic champion of the global liberal order, is seen as able to coax the Americans when possible and defy them when necessary.
Ms. Freeland’s team of America-whisperers includes Andrew Leslie, a former lieutenant general and Afghanistan veteran who knows many of the American generals filling out Mr. Trump’s administration.
Mr. Trudeau established a “war room” dedicated to the United States, headed by Brian Clow
.. Ministers’ schedules resemble those of rock bands on summer tours. They travel armed with data on the precise dollar amount and number of jobs supported by Canadian firms and trade in that area.
.. when Mr. Trump announced that the United States would leave the Paris climate agreement. Canadian officials said they would instead seek climate deals with American states, many of which were already in progress.