Just about every material you’d need to remodel a kitchen is now subject to the earlier round of tariffs. Many U.S. vendors import the majority of their materials from China. Flooring, cabinets, countertops, sinks, refrigerators and lighting fixtures are on the list of imports from China that now have a 10% tax, as are many of the materials used to make them, from plywood and quartz to stone and granite.
Sorry, investors, but there is no sanity clause.
Two years ago, after the shock of Donald Trump’s election, financial markets briefly freaked out, then quickly recovered. In effect, they decided that while Trump was manifestly unqualified for the job, temperamentally and intellectually, it wouldn’t matter. He might talk the populist talk, but he’d walk the plutocratic walk. He might be erratic and uninformed, but wiser heads would keep him from doing anything too stupid.
In other words, investors convinced themselves that they had a deal: Trump might sound off, but he wouldn’t really get to make policy. And, hey, taxes on corporations and the wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal — or at any rate, that there wasn’t a sanity clause. (Sorry, couldn’t help myself.) Put an unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy things.
To be clear, voters have been aware for some time that government by a bad man is bad government. That’s why Democrats won a historically spectacular majority of the popular vote in the midterms. Even the wealthy, who have been the prime beneficiaries of Trump policies, are unhappy: A CNBC survey finds that millionaires, even Republican millionaires, have turned sharply against the tweeter in chief.
.. The reality that presidential unfitness matters for investors seems to have started setting in only about three weeks (and around 4,000 points on the Dow) ago.
- First came the realization that Trump’s much-hyped deal with China existed only in his imagination. Then came
- his televised meltdown in a meeting with Nancy Pelosi and Chuck Schumer,
- his abrupt pullout from Syria,
- his firing of Jim Mattis and
- his shutdown of the government because Congress won’t cater to his edifice complex and build a pointless wall. And now there’s
- buzz that he wants to fire Jerome Powell, the chairman of the Federal Reserve.
Oh, and along the way we learned that Trump has been engaging in raw obstruction of justice, pressuring his acting attorney general (who is himself a piece of work) over the Mueller investigation as the tally of convictions, confessions and forced resignations mounts.
.. And even trade war might not do that much harm, as long as it’s focused mainly on China, which is only one piece of U.S. trade. The really big economic risk was that Trump might break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply integrated with production in Canada and Mexico that this would have been highly disruptive. But he settled for changing the agreement’s name while leaving its structure basically intact, and the remaining risks don’t seem that large.
.. Now imagine how this administration team might cope with a real economic setback, whatever its source. Would Trump look for solutions or refuse to accept responsibility and focus mainly on blaming other people? Would his Treasury secretary and chief economic advisers coolly analyze the problem and formulate a course of action, or would they respond with a combination of sycophancy to the boss and denials that anything was wrong? What do you think?
Republican leaders need to mount an intervention.
Up to now I have not favored removing President Trump from office. I felt strongly that it would be best for the country that he leave the way he came in, through the ballot box. But last week was a watershed moment for me, and I think for many Americans, including some Republicans.
It was the moment when you had to ask whether we really can survive two more years of Trump as president, whether this man and his demented behavior — which will get only worse as the Mueller investigation concludes — are going to destabilize our country, our markets, our key institutions and, by extension, the world. And therefore his removal from office now has to be on the table.
I believe that the only responsible choice for the Republican Party today is an intervention with the president that makes clear that if there is not a radical change in how he conducts himself — and I think that is unlikely — the party’s leadership will have no choice but to press for his resignation or join calls for his impeachment.
It has to start with Republicans, given both the numbers needed in the Senate and political reality. Removing this president has to be an act of national unity as much as possible — otherwise it will tear the country apart even more. I know that such an action is very difficult for today’s G.O.P., but the time is long past for it to rise to confront this crisis of American leadership.
Trump’s behavior has become so erratic, his lying so persistent, his willingness to fulfill the basic functions of the presidency — like
- reading briefing books,
- consulting government experts before making major changes and
- appointing a competent staff — so absent,
his readiness to accommodate Russia and spurn allies so disturbing and his obsession with himself and his ego over all other considerations so consistent, two more years of him in office could pose a real threat to our nation. Vice President Mike Pence could not possibly be worse.
The damage an out-of-control Trump can do goes well beyond our borders. America is the keystone of global stability. Our world is the way it is today — a place that, despite all its problems, still enjoys more peace and prosperity than at any time in history — because America is the way it is (or at least was). And that is a nation that at its best has always stood up for the universal values of freedom and human rights, has always paid extra to stabilize the global system from which we were the biggest beneficiary and has always nurtured and protected alliances with like-minded nations.
Donald Trump has proved time and again that he knows nothing of the history or importance of this America. That was made starkly clear in Secretary of Defense Jim Mattis’s resignation letter.
Trump is in the grip of a mad notion that the entire web of global institutions and alliances built after World War II — which, with all their imperfections, have provided the connective tissues that have created this unprecedented era of peace and prosperity — threatens American sovereignty and prosperity and that we are better off without them.
So Trump gloats at the troubles facing the European Union, urges Britain to exit and leaks that he’d consider quitting NATO. These are institutions that all need to be improved, but not scrapped. If America becomes a predator on all the treaties, multilateral institutions and alliances holding the world together; if America goes from being the world’s anchor of stability to an engine of instability; if America goes from a democracy built on the twin pillars of truth and trust to a country where it is acceptable for the president to attack truth and trust on a daily basis, watch out: Your kids won’t just grow up in a different America. They will grow up in a different world.
The last time America disengaged from the world remotely in this manner was in the 1930s, and you remember what followed: World War II.
You have no idea how quickly institutions like NATO and the E.U. and the World Trade Organization and just basic global norms — like thou shalt not kill and dismember a journalist in your own consulate — can unravel when America goes AWOL or haywire under a shameless isolated president.
But this is not just about the world, it’s about the minimum decorum and stability we expect from our president. If the C.E.O. of any public company in America behaved like Trump has over the past two years —
- constantly lying,
- tossing out aides like they were Kleenex,
- tweeting endlessly like a teenager,
- ignoring the advice of experts —
he or she would have been fired by the board of directors long ago. Should we expect less for our president?
That’s what the financial markets are now asking. For the first two years of the Trump presidency the markets treated his dishonesty and craziness as background noise to all the soaring corporate profits and stocks. But that is no longer the case. Trump has markets worried.
.. The instability Trump is generating — including his attacks on the chairman of the Federal Reserve — is causing investors to wonder where the economic and geopolitical management will come from as the economy slows down.
- What if we’re plunged into an economic crisis and we have a president whose first instinct is always to blame others and
- who’s already purged from his side the most sober adults willing to tell him that his vaunted “gut instincts” have no grounding in economics or in law or in common sense. Mattis was the last one.
We are now left with the B team — all the people who were ready to take the jobs that Trump’s first team either resigned from — because they could not countenance his lying, chaos and ignorance — or were fired from for the same reasons.
I seriously doubt that any of these B-players would have been hired by any other administration. Not only do they not inspire confidence in a crisis, but they are all walking around knowing that Trump would stab every one of them in the back with his Twitter knife, at any moment, if it served him. This makes them even less effective.
Indeed, Trump’s biggest disruption has been to undermine the norms and values we associate with a U.S. president and U.S. leadership. And now that Trump has freed himself of all restraints from within his White House staff, his cabinet and his party — so that “Trump can be Trump,” we are told — he is freer than ever to remake America in his image.
And what is that image? According to The Washington Post’s latest tally, Trump has made 7,546 false or misleading claims, an average of five a day, through Dec. 20, the 700th day of his term in office. And all that was supposedly before “we let Trump be Trump.”
If America starts to behave as a selfish, shameless, lying grifter like Trump, you simply cannot imagine how unstable — how disruptive —world markets and geopolitics may become.
We cannot afford to find out.
In the evil populist “Trump’s America,” here’s what happened to energy-related carbon emissions: In 2017, they fell by 0.5 percent. But in the saintly globalist European Union, they went up by 1.5 percent in the same period. In fact, per-capita carbon emissions in Trump’s America are nearly at a 70-year low.
It turns out energy deregulation does more to fight climate change than going to conferences. I guess you might call that an “inconvenient truth.” This one’s pretty inconvenient if you’re the kind of person that goes around saying Trump is a fake populist, that he’s not doing anything to help the forgotten men and women in this country.
.. Look, America’s poverty rate was lower in President Trump’s first year than at any point in the Obama administration.
Okay. Whatever, you Trump haters are probably saying. But of course the middle class was screwed by the Trump tax cuts that only helped the rich, right?
Oh wait. The Trump tax cuts doubled the standard deduction to $12,000 for individuals and $24,000 for families. That’s a huge change that takes millions of Americans out of federal income tax altogether and has effectively increased incomes for middle class families across the country.
.. What else helps the middle class? Jobs. But of course that “idiot” Trump couldn’t create them.
“When somebody says – like the person you just mentioned that I’m not going to advertise for – that he’s going to bring all these jobs back. Well, how exactly are you going to do that?” Obama once said. “He just says, ‘Well, I’m going to negotiate a better deal.’ Well, what – how – exactly are you going to negotiate that? What magic wand do you have?”
Yeah, Trump, what magic wand do you have? I don’t know, maybe just better economic policy. The kind that results in the lowest unemployment rate since 1969. And the lowest African-American unemployment ever.
.. Also, wasn’t Trump going to crash the economy? Hillary Clinton thought so, telling an audience, “Economists – left, right, and center – all agree: Donald Trump will drive America back into recession.”
Left, right and center, inconvenient truth, Hillary. Even the New York times just gave Trump credit for the fact that the U.S. economy is on track for its “best annual performance since 2005.”
Alright, whatever. Jobs and growth … but Trump still isn’t delivering his promises to working people. I mean, after decades of stagnation, incomes are still flat, aren’t they?
“A key thing we’ve been looking at for quite a while that doesn’t seem to be moving much are wages,” CBS correspondent Anthony Mason said on-air.
Oh dear. That turns out not be true any more. Wages have risen all the way through the last two years and were up 3.1 percent in the last quarter – the highest level in a decade.
Fine. But it’s all going to be ruined, isn’t it, by Trump’s crazy trade war with China? In fact, the elitists seem to hate Trump so much, they even took China’s side. Remember how they thrilled to the brutal autocrat Xi Jinping at Davos last year? They just lapped up his speech on the virtues of globalization. The president of the EU-owned European Investment Bank said, “In these times of a lack of leadership, particularly in Europe, it was quite impressive.”
Oooh President Xi! You’re quite impressive!
What’s actually happening is that President Trump’s pressure is working. China is on the back foot, making trade concessions, and now pledging to drop its “Made in China 2025” program, which was Xi Jinping’s grand plan to achieve world domination in the industries of the future.
We’ll see if they mean it. But even the fact that they’re saying it is a major victory for that “idiot” Trump, who obviously doesn’t know what he’s doing. Just like with North Korea, remember?
It was outgoing President Obama who told President-elect Donald Trump that North Korea would be his number one problem. Trump actually listened to him, did something about it, and turned our relationship around in a way that has made the world incomparably safer.
And then, just this past week, we saw incredibly important substantive progress from this administration. Major criminal justice reform, led by Jared Kushner, is now looking good for passage in the Senate. A major new effort to revitalize urban America and rebuild low-income neighborhoods is being led by Ben Carson. And there’s a highly significant new strategy from John Bolton to fight China’s attempted colonization of Africa.
.. Look, the point here is this: We’ll never persuade the Trump haters on the left and the right to change their feelings about the president. They just can’t stand him. And more than anything, it’s aesthetic. They find him vulgar … not to their taste.
Fine. But could you just focus on the facts? Could you just acknowledge – even for a day or so over Christmas – that on the facts, on policy, on the substance, that this is, so far, a pretty successful presidency?
.. Odds that the new plan will go far enough in addressing U.S. complaints are long. President Xi and others in the Chinese leadership are used to exercising a strong hand in the economy. Many bureaucracies and state-owned enterprises benefit from the unfettered access to resources that come with big government initiatives and so don’t want to be hampered by the greater competition of a level playing field... Officials in the Trump administration have called Made in China 2025 a threat to fair competition, saying it encourages state subsidies for domestic companies and forces technology transfer from foreign partners. Some U.S. officials are likely to see the changes as more cosmetic than real.. A key concession under consideration would be dropping the numerical targets for market share by Chinese companies, these people said. Made in China 2025 sets defined goals of raising domestic content of core components and materials to 40% by 2020 and 70% by 2025, an increase that comes at the expense of foreign competitors.
.. The Trump administration has pushed the “competitive neutrality” principle, making sure that it was part of the renegotiated North American Free Trade Agreement, known as the U.S.-Mexico-Canada Agreement. Under the concept, governments are prohibited from favoring state-owned companies over privately owned ones.
.. The idea was a favorite of prior U.S. administrations as well and became part of the Trans-Pacific Partnership
.. Vice Premier Liu, has told his U.S. counterparts, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, that China is planning to reduce auto tariffs and boost purchases of soybeans and other crops.
.. But the U.S. wants structural issues like Made in China 2025 and other policies addressed in any full trade deal.
As the stock market churned this week, President Trump anxiously called advisers both inside and outside the White House looking for validation that his talks with China were not driving the sell-off.
Trump has questioned why the markets weren’t reacting more positively to the news of his potential breakthrough with Beijing. In consulting with advisers, he remained convinced that the volatility wasn’t his own doing, but rather, the product of the Federal Reserve’s plan to raise the benchmark interest rate.
.. But investors—and many within his administration—saw it differently. Almost as soon as Mr. Trump declared himself “Tariff Man” on Twitter on Tuesday, indicating that he would be willing to slap additional tariffs on China if it doesn’t deliver on key promises, stock prices tumbled. Those concerns intensified Thursdayfollowing the arrest of a senior executive of networking-gear making Huawei Technologies Co., sending stocks plummeting for the greater part of the day.
Publicly, Mr. Trump has often dismissed market fluctuations as part of a natural correction, but several people close to the president say he places as much importance on the health of the Dow Jones Industrial Average for validation of his job performance as he does with his polling numbers.
.. He would get excited about triple-digit gains in a single day and question aides about how certain actions might influence the market, people familiar with the matter said. Asked about Mr. Trump’s attention to the stock market, one person close to the White House said: “He’s glued to it.”.. Late last year, as stocks climbed to records, Mr. Trump repeatedly drew parallels between his administration’s economic policies and the market value of American companies, tweeting more than a dozen times about market performance in November and December 2017 alone... “It doesn’t seem like anything was actually agreed to at the dinner [at the G-20 in Buenos Aires] and White House officials are contorting themselves into pretzels to reconcile Trump’s tweets (which seem if not completely fabricated then grossly exaggerated) with reality,”JP Morgan wrote.. While he has been quick to claim credit for market rallies, Mr. Trump has repeatedly pointed elsewhere when stocks slide. His favorite target: Fed Chairman Jerome Powell, who Mr. Trump has slammed over his decision to raise the interest rate... Mr. Trump also said that the October sell-off was reaction to potential election wins by the Democratic party.. Treasury Secretary Steven Mnuchin, speaking at The Wall Street Journal CEO Council in Washington on Tuesday, acknowledged that “the (stock) market is now in a wait and see” moment with regard to China: “Is there going to be a real deal at the end of 90 days or not?”
On his recent visit to Europe, he managed to convey once again his contempt for America’s European allies, and to demonstrate that he places more value on his own personal comfort than on the sacrifices that US soldiers have made in the past.
The trip itself cost millions of taxpayer dollars, yet Trump chose to skip a key ceremony honoring US war dead at Aisne-Marne American Cemetery because it was raining.
The White House offered up a cloud of unconvincing excuses for Trump’s absence, but other world leaders were not deterred by the fear of a few raindrops, and neither were past presidents Obama, Clinton, Bush, or Kennedy back in their day.
By choosing to stay warm and dry in his hotel room while other world leaders acknowledged the heroism of those who fought and died for freedom, Trump gave the concept of “American exceptionalism” a whole new meaning.And then, instead of marching with other European leaders at a ceremony marking the end of World War I, Trump showed up lateand on his own and even missed the symbolic tolling of a bell marking the 100th anniversary of the 1918 armistice. (In a revealing coincidence, Vladimir Putin arrived on his own as well.)
Overall, Trump seemed intent on proving that while the obligations of being president might force him to go on such trips, he doesn’t have to behave himself while he’s there.
For example, Trump is correct to accuse China of engaging in a variety of predatory trade practices and of failing to live up to its World Trade Organization commitments. He is also right when he complains that Europe has neglected its own defenses and relies too much on American protection (though he still seems to think NATO is a club with membership dues)..
He is hardly the first US official to criticize European defense preparations but being unoriginal doesn’t make it wrong.
Trump is also correct in his belief that Europe, Russia, and the United States would be better off if the divisions that presently divide them could be bridged or at least alleviated.
It would be better for Europe if Russia withdrew from Ukraine, stopped trying to intimidate the Baltic states, and stopped murdering former spies in foreign countries.
It would be good for Russia if Western sanctions were lifted and it no longer had to worry about open-ended NATO expansion. And it would be good for the United States if Russia could be pulled away from its increasingly close partnership with China.
For that matter, Trump wasn’t wrong to see North Korea’s nuclear and long-range missile programs as a serious problem that called for creative diplomacy.
The real problem is that Trump has no idea what to do about any of these issues, and he seems incapable of formulating a coherent approach to any of them. To the extent that he does have an actual policy toward Europe, for example, it is the exact opposite of what the United States ought to be doing.
Trump’s broad approach to Europe is one of “divide and rule.” He’s called the European Union a “foe” of the United States, and he has backed a number of the political forces that are now roiling the Continent and threatening the EU’s long-term future.
He endorsed Brexit, expressed his support for Marine Le Pen in France, and thinks well of illiberal leaders like Viktor Orban of Hungary and Andrzej Duda of Poland. Why? Because he thinks dividing Europe into contending national states will allow the larger and more powerful United States to bargain with each European state separately rather than face all of them together, and thus secure better deals for itself.
This approach might be termed “Neanderthal realism.” Playing “divide and rule” is a good idea when dealing with real enemies, but it makes no sense to sow division among countries with whom one has generally friendly relations and close economic ties, and when their collective support might be needed in other contexts.
This approach also runs counter to Trump’s stated desire to reduce US security commitments to Europe and to get Europe to take on greater responsibility for its own defense.
If you really want the United States to get out of the business of protecting Europe, you should also want Europe to be tranquil, capable, prosperous, and united after the United States withdraws. Why? So that Washington doesn’t have to worry about developments there and can focus its attention on other regions, such as Asia.
A Europe roiled by xenophobia, resurgent hyper-nationalism, and persistent internal wrangling wouldn’t be to America’s advantage; it would be just another problem area we’d have to keep an eye on.
Nor would a divided Europe be of much use in addressing any of the other problems on America’s foreign-policy agenda.
Why doesn’t Trump see this? Possibly because he is reflexively relying on the same tactics that brought him to the White House.Trump’s political success in the United States rests on his skill at picking fights with others, whether it is rival Republican candidates, Democrats of all kinds, the media, Meryl Streep, Jeff Bezos, or anybody else who disagrees with him. His goal is either to bully opponents into backing down or use the spat to rev up his base.It has worked tolerably well here in the United States, because a lot of Americans are still angry or fearful and Trump is both shameless and adept at fueling those emotions. This same instinct leads him to behave abominably abroad: Insulting British Prime Minister Theresa May and London Mayor Sadiq Khan, deriding Prime Minister Justin Trudeau of Canada as “Very dishonest & weak” or derisively tossing Starburst candies to German Chancellor Angela Merkel during a meeting of G-7 leaders.
.. The problem, of course, is that the boorish behavior and conflict-stoking policies tend to backfire on the world stage.
.. Trump’s bullying bluster didn’t win big trade concessions from Canada, Mexico, or South Korea; the shiny “new” trade deals Trump negotiated with them were nearly identical to the old arrangements and in some ways inferior to them.
And given how Trump has treated America’s allies, why would May, Merkel, Macron, Abe, or Trudeau do him (or the United States) any favors? The declining US image abroad compounds this problem, as foreign leaders know their own popularity will suffer if they help Trump in any way.
.. Trump’s personal conduct is not even the biggest problem. Arguably, an even bigger issue is the strategic incoherence of his entire transactional approach. His overarching objective is to try to screw the best possible deal out of every interaction, but this approach instead makes it more difficult for the United States to achieve its most important foreign-policy goals.
.. Threatening trade wars with allies in Europe or Canada makes little sense from a purely economic perspective, for example, and it has made it harder for the United States to address the more serious challenge of China’s trade policies.
If Trump were as worried about China’s trade infractions as he claims to be, he would have lined up Europe, Japan, and other major economic actors and confronted China with a united front. Similarly, pulling out of the Iran nuclear deal and threatening allies with secondary sanctions not only raises doubts about America’s judgment (because the deal was working, and the Europeans know it); it just fuels further resentment at America’s shortsighted bullying.
.. It is increasingly clear that Trump was never the brilliant businessman he claimed to be; he got most of his wealth from his father using various shady tax dodges, and the Trump Organization may have been heavily dependent on illegal activities like money laundering.
.. We should focus less on his personal antics and inadequacies and focus more on his inability to formulate effective policies, even on issues where his instincts are in fact mostly correct.
.. Sadly, the 45th US president possesses a world-class ability to get things wrong, even when he’s right.