February 2016, I warned in an article co-written with economist Benn Steil that “a Trump presidency threatens the post-World War II liberal international order that American presidents of both parties have so laboriously built up — an order based on free trade and alliances with other democracies. His policies would not make America ‘great.’ Just the opposite. A Trump presidency would represent the death knell of America as a great power.”
.. In just the past few weeks, he has taken a giant step toward destroying the global system that the United States created after 1945.
.. Trump has now exited three major treaties — the Trans-Pacific Partnership, the Paris climate accord and the Iran nuclear accord — and thrown into doubt the future of another — the North American Free Trade Agreement — while launching a reckless trade war against our closest allies.
.. Trump continued to push his irrational idée fixe that the United States — the richest nation in the world — has been victimized by its friends.
.. Trump looks like a defendant who has just been found guilty by a jury of his peers.
.. Justin Trudeau did not mince words, calling the U.S. tariffs “insulting” and saying: “Canadians, we’re polite, we’re reasonable, but we also will not be pushed around.”
.. Larry Kudlow accusing Trudeau of a “betrayal” and Peter Navarro saying there’s a “special place in hell” for the Canadian prime minister.
.. No U.S. officials have ever spoken this way about any U.S. ally, ever. These are the kind of words that normally precede military action.
.. Trump seems amazed to discover that the European Union (gross domestic product: $17.1 trillion), Japan ($4.8 trillion), and Canada ($1.6 trillion) — which together produce more than the United States ($19.3 trillion) — will not be pushed around as easily as the contractors he has gotten used to stiffing.
.. add Russia. This was a bizarre suggestion, given that Russia is not only an international outlaw but also an economic pygmy whose GDP does not even rank in the top 10.
.. If the G-7 were to expand, it should include India and Brazil, both democracies that have larger economiesthan Russia’s.
.. invasion of Ukraine — an act of aggression for which Trump perversely blames President Barack Obama — and it has done nothing since 2014 to deserve readmittance. Instead, its meddling in U.S. elections its and war crimes in Syria demand more punishment.
.. Trump is doing precisely what Putin hoped would happen when he helped Trump get elected.
.. A new poll finds that only 14 percent of Germans consider the United States a reliable partner, compared with 36 percent for Russia and 43 percent for China. That the citizens of one of America’s staunchest and most important allies now look more favorably upon our illiberal foes is a testament to Trump’s unrivaled wrecking abilities.
.. none of those disputes called into question the fundamental unity of the West in the way that Trump’s stupid and self-destructive actions do. The Atlantic alliance was born in Canada in 1941 and may well have died there in 2018.
How Mnuchin Keeps a Steady Grip in a Tug of War on Trade
Two weeks ago, Steven Mnuchin, the Treasury secretary, declared that the trade war with China was “on hold” and that the United States would temporarily holster its tariffs. The reassuring comments calmed markets and raised hopes that Mr. Mnuchin, one of President Trump’s most enduring and trusted advisers, was winning the internal trade battle that has gripped the White House.
Then Mr. Trump weighed in. In a one-two punch last week, the president doubled down on the trade war with China and threw in ones with Canada, Mexico and Europe for good measure.
.. The scolding laid bare the uncomfortably familiar spot that Mr. Mnuchin finds himself in: trying to be a voice of moderation and a statesman in an administration that sees diplomatic norms and protocols as signs of weakness.
He has so far managed to stay in Mr. Trump’s good graces while advocating a more free-trade approach, but that balancing act is showing signs of strain.
.. Mr. Mnuchin, unflappable in public, is privately making his case with a president
.. The internal tensions boiled over in May during a trade mission Mr. Mnuchin led to China, when he dressed down Peter Navarro, Mr. Trump’s hawkish trade adviser, by reminding him where he stood in the administration’s pecking order after Mr. Navarro confronted him about being sidelined from the talks.
.. Current and former White House and Treasury officials say Mr. Mnuchin has managed to thrive by employing a mix of assertiveness and obsequiousness, staking out his position to the president but quickly changing course to carry out Mr. Trump’s marching orders, even if his message did not win the day.
.. Mr. Trump tweeted that he was going to find a way to help put back in business a Chinese telecommunications company that had been punished for violating American sanctions on Iran and North Korea. The decision blindsided administration officials and lawmakers
.. Mr. Mnuchin, along with the commerce secretary, Wilbur Ross, was dispatched to Capitol Hill to try to calm angry Republican lawmakers and explain the rationale behind allowing the company, ZTE, to remain in business.
.. those close to the secretary say he has learned to appreciate Mr. Trump’s use of the threat of tariffs as a negotiating tool.
.. focused on the president’s desire to see the bilateral trade deficit reduced, rather than emphasizing some of the other trade barriers
.. Stephen K. Bannon, Mr. Trump’s former top strategist, has said that Mr. Mnuchin is in over his head in the negotiations and that he is letting Mr. Trump’s leverage slip away by failing to force China to make major changes to its industrial policy.
.. it was apparent that the Chinese government was trying to elevate Mr. Mnuchin’s role in the negotiations because they see him as the American official most likely to cut a deal.
.. “Among the possible choices, they see Mnuchin as being less hawkish than some of the other counterparts,”
.. populist voices outside the administration have already been heckling Mr. Mnuchin as inept amid reports that the United States was on the verge of making an agreement with China that was viewed as merely symbolic.
.. Mr. Mnuchin has at times found himself the subject of derision, characterized as a fawning banker who cannot tell the president “no.”
.. Last year, the Treasury secretary was scoffed at by economic policymakers from across the political spectrum for insisting that the $1.5 trillion Trump tax cuts would pay for themselves.
.. Mr. Mnuchin told members of the conservative House Freedom Caucus to “vote for the debt ceiling for me.” His plea was met with groans and hisses.
.. Last August, fellow alumni of Yale, where Mr. Mnuchin earned a bachelor’s degree, called on the secretary to resign when he defended Mr. Trump’s handling of racially inspired violence in Charlottesville, Va. A month later, Lawrence Summers, a Clinton administration Treasury secretary, called Mr. Mnuchin the “greatest sycophant in cabinet history” for supporting Mr. Trump’s criticism of football players who knelt during the national anthem.
.. points to his role in successfully steering the Republican tax cut package, which many said would never pass, through Congress.
.. Within the Treasury Department, Mr. Mnuchin has developed a reputation as a micromanager. He resisted choosing a full-time deputy for more than a year, preferring to oversee everything from carrying out the new tax law to overseeing financial sanctions.
.. When the Internal Revenue Service systems failed on Tax Day, the response to the crash was slowed because Mr. Mnuchin was in New Hampshire
.. He had required that any big decisions be cleared by him
.. Mr. Mnuchin’s closest aides describe him as a collegial and mentoring figure.
.. Despite his earnest persona on television, he is known to possess a wry sense of humor
Trump’s Tax on America
It would seem that for the Republican Party, an incompetent, erratic kleptocracy might just be the best form of government.
Or at least it was until March 1, 2018, the day Trump signaled his intention to impose across-the-board import tariffs of 25% on steel and 10% on aluminum. That decision, notes Pat Roberts, a Republican senator from Kansas, “is not going to go down well in farm country.”
.. His worry now is that Trump will pursue “a trade policy that will basically result in all the benefits of the tax reform being taken away by higher manufacturing costs being passed on to consumers.”
.. In the end, American consumers will pay for Trump’s tariffs. Such broad protectionist measures will affect every sector of US manufacturing in one way or another, and manufacturers certainly will not eat the full costs of higher-priced steel and aluminum inputs.
.. So, Trump has essentially proposed a new tax on US consumers and export industries, the costs of which will be borne largely by his own supporters in the American heartland and Rust Belt.
.. It turns out that Trump’s decision was taken against the advice – indeed, over the objections – of not just his
- chief economic adviser, Gary Cohn, but also his
- national security adviser, General H.R. McMaster, his
- treasury secretary, Steven Mnuchin, and his
- defense secretary, James Mattis.
On the other hand, Secretary of Commerce Wilbur Ross apparently favors the tariffs. But it is not at all clear why. The Department of Commerce itself surely recognizes that more Americans benefit from lower steel and aluminum prices than from higher prices.
Another supporter of the tariffs is Peter Navarro, who was recently promoted to Director of Trade and Manufacturing Policy and Director of the White House National Trade Council. That comes as no surprise. Navarro has written a number of alarmist books about America’s trade relationship with China, including one titled Death by China. Nevertheless, Navarro has not yet been able to explain how creating a larger domestic steel industry through tariffs will yield a net benefit for the US economy.
A final key supporter of the tariffs is US Trade Representative Robert Lighthizer, who formerly worked as a lawyer for the steel industry. As with Ross, it is not entirely clear what Lighthizer is thinking. He has to know that Trump’s tariffs will have little to no chance of boosting the US steel and aluminum industries without also imposing substantial costs on the economy. Doesn’t he realize that his own reputation will ultimately depend on whether the administration has a successful trade policy or an obviously stupid one?
The Trump veto threat: Another presidential temper tantrum
Actually it is the president who abandoned the DACA kids. He was offered a deal by Senate Minority Leader Charles E. Schumer (D-N.Y.) — money for the border wall in exchange for DACA relief — but senior policy adviser Stephen Miller and Chief of Staff John F. Kelly, along with Sen. Tom Cotton (R-Ark.) nixed it. Or does Trump not remember?
.. Whatever his intention, Trump is communicating to Congress and the entire world that his word is worthless, that when you think you have a deal, you really don’t.
What then are the Europeans, in discussion with the administration over his threatened exit from the Iran nuclear deal, the South Koreans, the North Koreans, our trading partners and just about everyone else on the planet supposed to think?
.. “With Bolton, [Joseph E.] diGenova and [Mike] Pompeo feeding Trump’s worst instincts, we’re entering incredibly dangerous times.”
(He could add to the list Peter Navarro, Cotton, the right-wing echo chamber and his favorite Fox News propagandists — all of whom egg on Trump without regard for the catastrophe that might await us if he followed their advice.)
.. Trump is never going to get better, and chances are he’ll get much worse. Everyone should act accordingly.