Robert J. Samuelson: The Last Days Of Free Trade?

Investors Business Daily ^ | September 21, 2016 | ROBERT J. SAMUELSON

[expat_panama]

Guess what? A President Trump could adopt his new trade agenda without any authorization from Congress -- and this could trigger a global trade war and a deep U.S. recession. Policies that promise to make us stronger economically could do the opposite.

That's the main take-away of a study...

...Trump could implement most of his proposals, which repudiate decades of pro-trade policies, by executive order. So contends Peterson's Gary Hufbauer after a review of trade laws. Over the past century, Hufbauer says, Congress has passed many laws that "authorize the president to impose tariffs......

...Trump's bluster may simply be a ploy... ...exporters -- would rush to court...

...Hufbauer doubts the courts will persuaded. He thinks they would move against the president only if the White House lost a trial. A trial could take a year or two, giving Trump a long period of freedom to pursue his policies.

If Trump raises tariffs on Mexico and China, they will retaliate...

...it almost certainly would be unfavorable...

...trade has been an engine of growth for the world economy. Trump seems to assume that if he can cut the trade deficit, he would be defending U.S. jobs and stimulating U.S. economic growth. With a $500 billion U.S. trade deficit in 2015, there seems to be ample room for improvement.

Although this appears logical, it's actually backward. When the U.S. economy grows rapidly, the trade deficit rises (because imports surge) and the unemployment rate falls (because shoppers also buy domestic goods and services).

By contrast, when the economy falls into recession, the trade deficit declines (because Americans buy fewer imports)... ...the Great Recession caused a huge drop in the trade deficit. In 2009, it was $384 billion, down from $762 billion in 2006...

...Are these the last days of open trade? They could be.

[Bryanw92]

>>What a crock. The “Great Society”-folks created a permanent underclass, and you think that if they worked dirty, smelly jobs they wouldn’t riot? LOL
>>Btw, your argument is from the pages of Marx. He thought “free trade” would leas to social unrest.

Again, I’m not in favor of ENDING trade, fair or otherwise. Neither is Trump. But we have to be smart and holistic in our approach to trade in this age of easy communication and fast transoceanic shipping. From a pure “trade” point of view, there is no reason for any American to have a job. We could outsource almost all work and bring in cheap foreigners for everything else.

But, we have a country to maintain here, and a nation is PEOPLE. My argument is from more than Marx, but your ad hominem suggestion that I am Marxist is typical of those who believe that a nation is nothing but an economy. My argument is also from the beliefs of Christianity. (No, I’m not saying Jesus is a socialist, so don’t bother going there.)

[Bryanw92]

>>Good point about Charlotte, but let’s be realistic. Most of the jobs those people are capable of doing are being automated out of existence, and it has nothing to do with trade policy.

Then, automate! Don’t outsource.

I’ve worked in industrial automation for 35 years. I know the actual reality of what automation means. Do you know what automation requires? Technicians. An army of technicians. People who can go to trade school for 2 years or get some military technical training and they are able to get a good job building, maintaining, operating, and programming automated machinery.

But if you send the assembly line to Asia, then they automate. Their people become automation technicians.

So, yes, automate everything and the USA can be a nation of robot repairmen.

[zzwhale]

the left operates from fear.. and fear mongering...
TRUMP NEVER SAID anything ABOUT A TRADE WAR....
that idea eminates from the left wing propaganda machine...

WHAT HE SAID WAS HE WILL NEGOTIATE FAIR TRADE AGREEMENTS
AS OPPOSED OT THE USA EAT SHEET DEALS THAT BUSH AND CLINTON ARRANGED FOR THIER FRIENDS... OVERSEAS...

CHINA IS DUMPING STEEL FOR EXAMPLE AND MANIPULATES ITS CURRENCY WITH A TWO TIER SYSTEM..

FAIR TRADE IS FINE BUT WHEN THE USA CONTINUOUSLY GET THE SHORT END OF THE STICK (JAMMED UP ITS...) IN THE NAME OF FREE TRADE IT IS BECAUSE WE HAVE BEEN SOLD OUT AT THE TOP...

THAT IS WHAT TRUMP IS GOING TO CORRECT AND ELIMINATE....
and that is what needs to be done
and the existing ESTABLISHMENT wont do it

Hillary wont even release the transcript of the wall street speeches....
because it shows she is no wall street reformer and has cut a deal with the BANKSTERS.. while pretending to care about the middle class ...who she loathes...

I pray that they dont assasinate Trump...
the opposition is ruthless and will stop at nothing...
Soros is pure evil and so is Hillary

[BykrBayb]

I thought excessive use of the executive pen was supposed to be a good thing.

[impimp]

Trump’s trade policies are a disaster and the vast majority of those with college level economics education fear protectionism.

But Trump is great on everything else.

[wastoute]

The author claims electing Trump could “trigger...a recession”. When we have recently seen Fed articles that describe how they are dawning on the fact that we have been in a Depression for years this author is pretty out of touch in the first paragraph.

[Flavious_Maximus]

The problem with this type of “Trade” is that we buy everything from them and they buy nothing from us.

The trade goes only in one direction while Americans get fleeced.

[trebb]

Some folks worried that the taxpayer-funded gravy boat might be forced into reality.....

[Eric Pode of Croydon]

I have a very clear and easy to enforce trade policy:

1. American business can sell anything in Country X without restriction.

2. Country X can sell anything in America without restriction.

3. If (1.) is interfered with, America will embargo imports from Country X until the interference is removed.

[Eric Pode of Croydon]

Realistically speaking, between automation and web-based self service technologies, more and more jobs are becoming redundant every day. One robotics tech can maintain robots who do the job of fifty workers with wrenches and spray guns.

Instead of living in a fantasy world where 1950'a assembly lines magically reappear, conservatives should be seriously thinking about how a capitalist economy will look when we can produce everything we produce today, with 30-50 percent less employment.

[Bryanw92]

>>Realistically speaking, between automation and web-based self service technologies, more and more jobs are becoming redundant every day. One robotics tech can maintain robots who do the job of fifty workers with wrenches and spray guns.

That’s the fantasy of business leaders. The reality of automation is that it costs a lot more than just hiring that one magical tech. In very light industry, that might be possible, but as the industry gets heavier, the number of techs required grows. If your operation expands beyond the 40 hour week, you need more techs. If quality is important,,you need more techs. Automation does give you cost savings, but it mostly just shifts costs from one part of the cost of doing business to another.

>>Instead of living in a fantasy world where 1950’a assembly lines magically reappear, conservatives should be seriously thinking about how a capitalist economy will look when we can produce everything we produce today, with 30-50 percent less employment.

I agree. The present conservative answer is “no welfare” and no work. I would love to hear real solutions to the problem of maintaining national sovereignty while outsourcing our industry to the “cheap world”. But, we force everyone into one of two camps: free traders or stinking communists. It’s as if there is no middle ground.

[Buckeye McFrog]

oh, so NOW they’re wetting their pants over the Executive Branch having too much power.....

[expat_panama]

TRUMP NEVER SAID anything ABOUT A TRADE WAR....

We're together on the fact that everyone likes to make up things that Trump says and doesn't say but right here:

 

Trade War | Donald J. Trump For President  Our country is getting ripped off. We need the smartest people negotiating for us! Find out more about Donald J. Trump for ..

 ---we can watch Trump saying something about how we're already in a trade war and correct me if I'm wrong but I didn't see him saying this is a bad thing nor whether he wanted to stop it.

Over at Donald Trump Trade Policy FULL Speech Monessen Pa 6/28/16 we can hear Trump say something to the affect that trade deficits are bad for jobs, but when we look at the actual numbers--

--we don't see that at all.  In fact, we see that a big trade deficit comes with more jobs and a lowering trade deficit happens w/ people out of work.

We need to be clear about what is and what isn't.  We don't want to accept all the lies going out about what Trump says and doesn't say  --like

CNN actually defends misquoting Trump

--even though this is what people do.    Like, I know full well that I'm going to be misquoted in this post about all kinds of things, and so will you. 

It's still a great world we live in.

[uncitizen]

We don’t even have to try hard sell Trump to our friends that refuse to see. What will be more effective is to show them these numerous examples of CNN changing words, omitting words, adding words.

[ConservativeMind]

Income taxes are what allowed the federal government to massively grow.

The idea that excise taxes are “bad” is ridiculous.

All taxes are penalties. You can evade paying import taxes by buying US-made goods. You can't evade income taxes, unless you get your income renamed as a “gift” or “welfare,” and then you pay nothing.

Fight government spending and the income tax, not the use of the excise tax.

[Alberta's Child]

LOL. Thanks!

[Alberta's Child]

But keep in mind that Asia has a huge advantage over the U.S. in one key respect: they have more customers there.

The sad truth is that 300 million people in this country isn't a very big market compared to 2+ billion people in China and India alone. One of the reasons more and more companies are sourcing their production in Asia is that they simply sell more of their products over there now.

[Bryanw92]

>>The sad truth is that 300 million people in this country isn’t a very big market compared to 2+ billion people in China and India alone.

The globalists like to market that half-truth as a hard fact, but the buying power of our 300M far outreaches the buying power of their 2B. But, as we ship our economy out of the US, the buying power of those 300M is decreasing and that is the true goal of the Transnational Progressive globalist. They need an impoversished America to make their border less world a reality. Then the Elites can live in the “nice” world of beaches and scenery while the rest of us (the Chinese, Indian, and the American serf) can labor in the “ cheap” world of poverty and toil. Then when some area begins to achieve prosperity, they can move to a new “ cheap” place and drop a little war into the prosperous place and reduce it back to “cheap”.

It’s the Human Farm. We Americans are the livestock destined for show at the county fair right now. But after the fair, we’re just meat on the hoof for the globalists.

[Alberta's Child]

1. There's no reason why the "buying power of our 300M will exceed the buying power of those 2+ billion people in perpetuity. We have many natural and historic advantages over other countries in this regard, but we are becoming increasingly hampered over time as well. See Item #2, for example.

2. The "buying power" of our 300M people is largely dependent on the accumulation of debt that now exceeds $19 trillion. This doesn't even include future pension and health care obligations. The average U.S. citizen today has a $60,000 debt hanging around his or her neck, and over time they have less and less to show for it. Put in different terms ... how much purchasing power does a person with a net worth of -$60,000 really have?

[lewislynn]

bringing jobs and businesses back to America by imposing tariffs to offset the unfair advantage china, mexico and others enjoy due to very low wages and next to no environmental protections simply evens the playing field.

What most people don't understand about negotiating these deals is just the threat of tariffs from a country/man they know will do it would be good enough...

And THAT is what scares the $hit out of them about Trump.