Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Trump Trade Policy is Shortchanging America

President Donald J. Trump’s (R-New York) simple-minded and short-sighted trade policy is putting America in a very bad position.

The United States might find itself surrounded by trade zones from which many of its products are excluded. American workers, farmers, and businesses will pay the price while the Donald collects a few votes from factory workers in Ohio.

The latest and most glaring example of this is the Trans-Pacific Partnership (TPP) which Trump pulled out of right after entering the office. The TPP is alive and well without America, and now the United Kingdom is trying to join it, The BBC reported. That means U.S. products might get excluded from the TPP in the near future if Britain takes a lead in the organization.

Leaving the TPP Threatens American Jobs

This can be a disaster for the US because it would be in the interest of the UK; a major auto exporter, to negotiate the exclusion of US vehicles from TPP nations. The United Kingdom produced 1.950 million vehicles year and it is on course to manufacture 2.1 million automobiles in 2018, Statista data indicates.

Nor is it just automobile workers; jobs that are threatened. Coal miners; a key Trump constituency, oil-field workers, and farmers are also in danger. The current TPP membership includes Australia, a major coal producer. It also includes Chile, Mexico, Peru, New Zealand, Canada, Malaysia, and Vietnam all major exporters of agricultural goods. It is in their interest to keep American food and coal out.

Then there’s oil; Canada and Mexico are major oil producers. They and the UK; another big oil producer, would have a strong interest in keeping oil from the US, (the world’s number two source of petroleum) out of the TPP to keep prices higher.

A longer-term nightmare would be countries like Russia, Saudi Arabia, or Brazil joining the TPP. Russia or Saudi Arabia would have a strong interest in keeping American oil out. Brazil a major producer of agricultural products, oil, and automobiles would want to keep American production in those areas out of the Partnership.

Saudi membership in the TPP is a strong possibility because of the growing irrelevance of OPEC. The Kingdom will need a better deal elsewhere, why not in the TPP? A Saudi push for TPP membership is likely after the initial public offering (IPO) of Aramco its’ national oil company. The Aramco IPO is expected in the second half of 2018.

These nightmares can be avoided if Trump had just stayed in the TPP and negotiated a better deal. Now the Donald or his predecessor will either end up begging to get back into the TPP at some point and get a worse deal or look elsewhere.

Something that needs to be pointed out to Trump followers is that it is impossible to “Put America First” if Uncle Sam is not in the building to do that. Pulling out of the TPP was putting America last and China First.

Trump’s Trade Policy is Making China Great Again

There is only one country that will benefit from the Trump trade policy, the People’s Republic of China.

If the US gets shut out of markets by the TPP it will be more dependent on Chinese trade than ever before. A nightmare scenario is that Uncle Sam will have to go begging to Beijing for trade deals to save American jobs. The Chinese will be in a position to force the US to accept low-ball prices for American oil, and other resources. Worse, America will have no leverage to negotiate a better trade deal with the People’s Republic.

This obviously is not what Trump voters wanted, but it is what they will get. A likely outcome of the Trump trade debacle will be widespread suspicion that Trump is a Chinese agent. Some of the factory workers who are parading around in Make America Great Again hats today might be burning effigies of the Donald draped in a Chinese flag in a few years’ time.

 America Needs a Realistic Trade Policy

Trump’s shortsighted trade agenda is what comes of policies set by a shallow and opportunistic politician with no real values or beliefs. Donald let the crowd at some Legion Hall in a small Ohio town decide his trade policy. All Americans will suffer from that lame-brained decision.

Hopefully, the conservatives in Congress and the administration; that have steered Donald’s agenda away from short-sighted white nationalism to mainstream Republican positions – will be able to do the same with trade. If they cannot a lot of Americans will lose their jobs, and one of them will be Donald J. Trump who will be looking for a new gig in February 2021.

America needs leadership, not washed-up television personalities looking for a cushy second career. Real leaders make the tough and unpopular decisions and often ignore popular sentiment. Frauds like Trump, Hillary R. Clinton, and Oprah Winfrey, give the voters what they want, and ignore realities.