President Trump and his trade negotiators are playing a game of teenage high-speed “chicken” with the North American economy. The lead domestic article (paywall) in today’s Wall Street Journal is headlined “Weakened Nafta, WTO Would Pave Way for Conflict.” The article begins:
“Before a war begins, the antagonists remove the peacekeepers. Trade wars start the same way.
“President Donald Trump is trying to remake or withdraw from the North American Free Trade Agreement, and his administration is also weakening the World Trade Organization. Sidelining the peacekeepers that enforce the rules of global trade would free up the U.S. to impose tariffs without fear of an arbiter contradicting its decision. The administration’s punitive 299% preliminary tariff against aircraft built by Canada’s Bombardier Inc. might be an early glimpse of this.”
Boeing and the Commerce Department’s attempt to destroy struggling Bombardier, maker of the excellent CS series planes that Delta wants to buy, didn’t turn out so well. Europe’s Airbus quickly stepped in to buy Bombardier. The Airbus-Bombardier combination will be a formidable competitor to Boeing, and it is already manufacturing in the U.S., so that Boeing’s attempt to destroy Bombardier as a foreign producer has backfired.
The Journal article continues: “This may deliver short-term victories to Mr. Trump, but at what cost? Roberto Azevedo, the WTO’s chief, told a Council on Foreign Relations conference this week that a world without multilateral arbitration is one ‘ruled by unilateral actions, which is basically a euphemism for trade wars, and…we’d all be, without exception, worse off than we are now.'”
Auto manufacturers and most U.S. farmers would be among the big losers if NAFTA is deep-sixed by the administration.
At 71 years old, isn’t President Trump badly cast playing James Dean in “Rebel without a Cause”?
Investor’s Business Daily thinks this is just administration theatrics and that “trade negotiators from the three nations…expect things to go right up to — but not past — the breaking point….When faced with a potentially destabilizing deadline, as may happen in the Nafta negotiations, Trump finds a way to pivot, take the best deal he can get after all of his cards are played, and declare that the outcome is really positive.”
Excuse me, but is there a grownup in the house? For example, George P. Shultz, secretary of the Treasury in the Nixon administration and secretary of state in the Reagan administration. In an op-ed published four days ago, he and Mexico’s former secretary of finance, Pedro Aspe, write that “Nafta Needs an Update, Not Repeal” and suggest three modifications.
While U.S. troops stood by doing nothing — on orders from Washington — Iran played the crucial role in ousting the Kurds from their hard fought recapture of Kirkuk and the oil-rich surrounding region This constituted some forty percent of the territory under Kurdish rule since 2014 and provided a haven for minorities fleeing ISIS executions and Iranian-backed Shiite militias.
With the ISIS caliphate now caput, the Trump administration’s objective in the Mideast was to have been the containment of Iran’s power grab in the region. But the Kurds in Iraq and Syria, in alliance with Israel, would have been the U.S.’s key allies in that effort.
By failing to protect its ally, U.S. Mideast policy has become an incoherent mess. The U.S. will now be regarded as an untrustworthy minor player in the region. It might as well collect its chips and go — before the shoes begin to fly.
U.S. foreign policy is on more solid ground with its recent turn to India. “[T]he Trump administration on Wednesday bluntly proposed that Washington and New Delhi work together in the Indo-Pacific region to counter the disruptive force that China has become,” The Times of India reports. The proposal was made by Secretary of State Tillerson in a speech to the Heritage Foundation. “The US Secretary of State’s remarks came hours after President Trump publicly and symbolically threw his support behind India by hosting a Diwali event at the White House, while rhapsodizing about India, Indian-Americans, Hindu-Americans, and Prime Minister Modi.”
According to IMF chief Christine Lagarde, India is on a solid growth path for the medium and long-term. She blamed the current slowdown on implementation of a goods and services tax and demonetization. (This was an ill-advised recall of high-denomination bank notes intended to punish tax avoiders.)
What would the newspaper industry do for copy without the former president and his wife? The latest Clinton scandal involves their collusion in the Russian takeover of U.S. uranium supplies. A timeline of their links to the scandal is here.
A call for Special Counsel Mueller to recuse himself from the Russian collusion investigation he heads is here. (hat tip: Eaglebeak)