Sunday, June 3, 2018

Border Wars




I was listening to some BBC pundits try to make sense of Trump's tariffs announced on Friday, and they had a pretty hard time of it.  One woman more or less nailed it when she said that these tariffs are aimed purely at his base, fulfilling his promise of a tough trade policy on the campaign trail.  I was waiting for one of them to point out that these tariffs may hit his base the hardest, as auto companies rely heavily on cheap imported steel to keep their prices down, and much of this steel and aluminum comes from Canada, but the British pundits were focusing mostly on the impact on Europe, which appears to be negligible at first sight.  I guess this is why Jean-Claude Juncker sees this more as an annoyance than anything else.

Not so for Canada, which was notably pissed and promised retaliatory tariffs within a month, assuming Trump actually goes through with these proposed tariffs.  What makes this even odder is that the US actually enjoys a trade surplus with Canada despite its heavy reliance on Canadian oil, steel and aluminum.  But, for whatever reason the Trump administration is claiming they have a $12 billion deficit based on "re-exports."  Given the overall trade between the two countries is over $500 billion a year, a $12 billion deficit either way would account for no more than 5% on either side (small change as Wilbur Ross might say) but I guess the Trump administration is determined to create enemies where none exist.

I suppose this is a way to try to get more favorable terms out of NAFTA, which the Trump administration is determined to rewrite.  He's already managed to alienate Mexico, which is taking its trade elsewhere, namely Brazil.  This is already beginning to hurt American farmers.  What's to stop Canada from turning to the EU and Britain in the coming years, or for that matter South America.  Needless to say, it doesn't seem like Wilbur, the talking Campbell's Soup can, and Steve "the Dweeb" Mnuchin have thought this out very deeply.  They were just looking for a quick hit in an effort to boost insurgent Trump loyalist candidates in the Fall.

The only problem is that it didn't work for Rick Saccone, who lost his special election in February to an insurgent Democrat, when these sanctions were first announced.  Everyone, including the Republican orthodoxy, thought the tariffs were a dead letter, but with Trump nothing is a dead letter, and so we go through another round of inflammatory talks.

Perhaps the only consolation is that he announced the tariffs on Friday and has the weekend to think about  it, before the stock market reacts on Monday.  This gives time for Mitch and other Republican stalwarts to talk to Trump and try to get him to back away from these punitive measures.  Sadly, Trump appears to have finally made up his mind on the subject, and when he does that there is no way to reach him.  He will have to rely on his deep-pocket supporters to bail him out on Wall Street, as it looks like the Dow is in for a big hit.

If there is any reason behind these rash actions, it is His Trumpness does these things because he can.  He loves nothing more than exercising his executive power in the White House.  It makes him feel like a king.  It's great fun to see the world react to his pronouncements the way it does.  To hell with the consequences.  He will leave it up to his successor to clean up the mess once he's gone.  In the meantime, he is going to get as much mileage as he can out of being the "Leader of the Free World."  He might even attach "LFW" to the end of his name like some fancy title.

The only problem is whatever trust other countries had in the US being a stable international influence is now gone, and maybe even irrevocably, as who is to say we won't get another "Donald" somewhere down the line the way this country vacillates between executive leaders.

Other countries have their electoral revolutions.  We see what is going on in Italy at the moment.  However, there isn't such a big swing in policies as there is in the US from one administration and the next.  You look at dear old Britain, despite the shake up Brexit created, things still move along relatively smoothly, because conservatives and liberals can communicate with each other and settle their differences in a civilized manner or at least politely agree to disagree.

Not so in the US, where Trump and the Republicans have done everything they can to shut Democrats out of the process, heeding no advice from the other side whatsoever as they push through their heinous policies both in the White House and Congress.  If something goes wrong, they blame the Democrats.

The only problem for Republicans is that the White House isn't heeding any of its advice either, leading former House Speaker John Boehner to muse that it has now become Trump's party to do with what he likes.  There is no longer any push back.  Not like Boehner had much of a spine himself, but Mitch and Paul have no spines at all.

As we descend on this path toward autocracy, we can only speculate about the near future.  Will Americans push back in the midterms, electing Democrats in droves?  Or, will they once again fall prey to the populist rhetoric streaming out of Trump's mouth on his campaign whistle-stop tour of red states?  Trump is crowing about low unemployment rates at every stop, as if he single-handedly brought this about.  Will Americans buy it?

George Bush enjoyed a lot of popular support back in 2002, which allowed the Republicans to dominate the midterms that year, a rare event given the sitting president was of the same party.  Trump has far less good will at this point in his tenure.  Even Rasmussen, his favorite poll, has him -2 per cent as of Friday.  You would never know it to hear him talk, but I think even his most loyal supporters have to wonder what the fuck he is doing by going after Canada?

What we have is a case of imperial overreach, buoyed by what he believes to be his victory over North Korea.  He was positively gloating over the huge envelope he got from the Supreme Leader and is now very much looking forward to his big date in Singapore on June 12.  He thinks he can bring this same style of "hardball" to NAFTA and the G7, getting great nations to bend to his will as he believes he has Kim Jong-un.  Well, he better hope he gets something out of this summit otherwise he is going to look like the biggest fool in recent history.

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