U.S. Trade Deals Mean Justice for Some, Not Justice for All

2017 was another banner year of justice for sale, reveals the United Nations Conference on Trade and Development’s annual review of investor-to-state dispute settlement (ISDS) cases. What’s the report say? It reveals lots of new ways global investors are undermining democracy in private tribunals.

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What’s ISDS? It’s a private justice system. ISDS means any investor—usually a corporation, but sometimes an individual, who buys property in a foreign country, from a hectare of land to stocks and bonds—can use this private justice system to sue host countries over laws, regulations and court decisions that may affect the investor’s current or future profits.

ISDS means justice for some, rather than justice for all. Those with the means to become international wheeler-dealers can access ISDS. The rest of us have to rely on public courts—the same ones that investors say are “inadequate” to handle their needs. That’s not fair, and that’s not right.

In 2017, 65 new known cases were filed, for a total of 855 known ISDS cases. Some cases are secret, so we’ll never really know how many cases have been filed.

The U.S. is the most frequently claimed “home state” of investors using the system, which tells us that U.S. trade and investment treaties (such as the North American Free Trade Agreement and the U.S.-Panama Trade Promotion Agreement) are pretty effective at promoting outsourcing to our trading partners (or else there wouldn’t be anything to sue over).

Spain is the third most sued country, and Canada is the sixth most sued, which tells us that ISDS isn’t really about “deficient” justice systems in poor countries—it’s about empowering economic elites to challenge democracies. Of all ISDS cases that have been decided on the merits, the investor wins 61% of the time, winning $504 million on average.

Two of last year’s cases approved the right of Chinese state-owned companies to use ISDS, despite claims by host countries that the Chinese government was actually calling the shots. In two other cases, investors were allowed to pursue their cases even though their original investments were illegal under the laws of Uzbekistan and Peru, the host countries. And in an extremely rare appellate case, one tribunal said it was OK for another tribunal to order a country not to enforce the rulings of its own domestic courts. Since one of the arguments made by those who favor ISDS is that the tribunals can only order monetary damages—rather than tell governments what their laws can be—this result is shameful. And maybe it is just the kick in the pants that governments need to abandon ISDS altogether.

In the NAFTA renegotiations, the U.S. has proposed to nearly (but not quite) eliminate the unfair ISDS system, but Canada and Mexico are saying no. The U.S. proposal would allow countries to opt out of the system entirely, and even if they do opt in, it would place restrictions on the kinds of cases investors could bring. The AFL-CIO supports this U.S. proposal and asks Canada and Mexico, “What are you waiting for?”

Taken From: https://aflcio.org/2018/7/9/us-trade-deals-mean-justice-some-not-justice-all

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EU and Japan sign one of history’s largest trade deals

Move seen as counterweight to offset US protectionism under Donald Trump

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Japan and the European Union have officially agreed one of history’s largest trade deals, in what will be seen as a calculated snub of Donald Trump’s protectionist policies.

Political leaders in Tokyo on Tuesday heralded the Economic Partnership Agreement, which will bind together two trading powerhouses accounting for 30 per cent of the world’s economy.

The deal, which is five years in the making, will virtually scrap import duties on Japanese goods into the EU, including machinery parts, tea and fish, when it takes effect by late 2019. A 10 per cent tariff on passenger cars will be abolished over seven years.

Europe successfully nudged Japan to face down its powerful farm lobby by cutting tariffs on imported wine, pork, cheese, chocolate and other food products. Japan will eliminate tariffs of more than €1 billion on about 94 per cent of European imports into the country before phasing them out almost entirely, said the European Commission.

Donald Tusk, president of the European Council, said the deal was a vote of confidence in the global order of rules-based free trade. “At a time when some are questioning this order, we are sending a clear message that we stand against protectionism.”

In a joint statement, the leaders pledged to defend the world’s trading status quo. “In giving full effect to this agreement, Japan and the EU are sending a powerful message to promote free, fair and rules-based trade, and against protectionism,” it said.

Estimates produced by Japan’s government said the agreement could add about 290,000 jobs and five trillion yen to the Japanese economy – or about 1 per cent of GDP.

President Shinzo Abe called it “historic” at a time when protectionist sentiment is “spreading around the world”. He said it would help offset the impact of Japan’s shrinking domestic market.

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Among the industries celebrating the official signing of the agreement is Irish whiskey, which has long played second fiddle to its better-known, more powerful Scottish rivals.

Sales of Irish whiskey were up nearly 16 per cent in Japan last year, according to the Irish Whiskey Association, and many companies believe there is plenty more room to grow.

William Lavelle, head of the IWA, said: “We see Japan as being a key growth market for Irish whiskey in future years.”

Japan and the EU have been left stunned by US plans for new tariffs on steel and aluminium products and threats to hike tariffs on Japanese cars and auto parts – a key export earner. In May it was reported that Japan was considering retaliatory tariffs of $409 million on US exports.

Speaking in China on Monday, Tusk said it was a “common duty” of Europe and China, the US and Russia, not to destroy the global order but to improve it.

European Commission president Jean-Claude Juncker told reporters on Tuesday that the Japan-EU deal “a landmark moment for global trade” and said it would set the standard for others. “As far as we are concerned, there is no protection in protectionism. We want to rewrite the rule book together, not destroy it.”

The deal must be ratified by both parliaments before it comes into affect. Greenpeace International senior political strategist Shira Stanton said: “The trade deal signed today, and others like it, smack of corporate protectionism at the expense of democracy, social rights, and environmental and climate protection. The EU and Japanese parliaments should reject it. These kinds of trade agreements are not an appropriate response to protectionism. Only enhanced international co-operation that prioritises people and the planet can help solve the pressing problems of our time, like climate change, inequality and conflict.”

Taken From: https://www.irishtimes.com/business/economy/eu-and-japan-sign-one-of-history-s-largest-trade-deals-1.3567791

Japan-EU trade deal ‘light in darkness’ amid Trump’s protectionism

Leaders use largest bilateral free trade deal to send clear message to US president

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The EU and Japan say approval of the world’s largest bilateral free trade deal shines a “light in the darkness” of global political uncertainty.

Japan’s prime minister, Shinzo Abe, and the EU leaders Donald Tusk and Jean-Claude Juncker sought to establish themselves as the flag-bearers of the free world, in response to Donald Trump’s show of apparent solidarity with Vladimir Putin in Helsinki on Monday.

The leaders promoted the benefits of a free trade deal that is set to eliminate nearly all tariffs on products traded between Japan and the EU.

Tusk, the president of the European council and an outspoken critic of the Trump administration in recent months, was particularly keen to celebrate the shared values of the signatories, not only in terms of trade but also foreign policy.

Coming just 24 hours after Trump backed the Russian president over his own intelligence services at a summit in the Finnish capital, Tusk pointedly highlighted the continued support of Japan and the EU for the territorial integrity of Ukraine, whose Crimean peninsula was illegally annexed by Russia in 2014.

Tusk said Japan and the EU were firm in their support of the Iran nuclear deal, the joint comprehensive plan of action, which lifted economic sanctions on Iran in return for curbs on Tehran’s nuclear expansion. Trump reneged on the deal earlier this year.

Tusk said: “Politically, it’s a light in the increasing darkness of international politics. We are sending a clear message that you can count on us. We are predictable – both Japan and [the] EU – predictable and responsible and will come to the defence of a world order based on rules, freedom and transparency and common sense. And this political dimension is even more visible today, tomorrow, than two months ago and I am absolutely sure you know what I mean.”

He continued: “Let me say that today is a good day not only for all the Japanese and Europeans but for all reasonable people of this world who believe in mutual respect and cooperation …We are putting in place the largest bilateral trade deal ever. This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order.”

Asked how he would respond to concerns that free trade could threaten jobs, Tusk responded: “Political uncertainty, tariff wars, excessive rhetoric, unpredictability, irresponsibility; they are a real risks for our businesses, not trade agreements.”

Trump has been condemned at home and abroad after failing to denounce Russian meddling in the US presidential election during a joint press conference with Putin, during which he appeared to side with the Kremlin over his own intelligence services. The Republican senator John McCain has claimed that “no prior president has ever abased himself more abjectly before a tyrant”.

Abe, an early visitor to Trump’s Mar a Lago resort after his election, did not address the Helsinki summit directly but told reporters that the trade agreement with Brussels “shows the world the unshaken political will of Japan and the EU to lead the world as the champions of free trade at a time when protectionism has spread”.

Juncker, the president of the European commission, added: “As far as we are concerned there is no protection in protectionism, and there is no unity where there is unilateralism.”

The commission has announced that Juncker will visit Washington and meet Trump at the White House next Wednesday to discuss trade.

Once ratified by parliaments on both sides, the EU-Japan trade deal will eliminate about 99% of tariffs on Japanese goods, including on cars, from the eighth year after the deal is implemented, with tariffs scrapped on car parts immediately.

Japanese consumers will enjoy lower prices for European wines, pork, handbags and pharmaceuticals, should it come into force in 2019, as is expected. The two parties also signed an agreement to allow data to flow between the EU and Japan, creating “the world’s largest area of safe data flows”.

Taken From: https://www.theguardian.com/world/2018/jul/17/japan-eu-trade-deal-light-in-darkness-amid-trumps-protectionism

Japan and EU sign trade deal to eliminate nearly all tariffs By ASSOCIATED PRESS

The European Union and Japan signed a landmark deal Tuesday that will eliminate nearly all tariffs on products they trade.

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The ambitious pact signed in Tokyo runs counter to President Trump’s moves to hike tariffs on imports from many U.S. trading partners. It covers a third of the global economy and markets of more than 600 million people.

 

“The EU and Japan showed an undeterred determination to lead the world as flag-bearers for free trade,” Japanese Prime Minister Shinzo Abe said at a joint news conference with European Council President Donald Tusk and European Commission President Jean-Claude Juncker.

 

Tusk praised the deal as “the largest bilateral trade deal ever.” He said the partnership is being strengthened in various other areas, including defense, climate change and human exchange, and is “sending a clear message” against protectionism.

The leaders did not mention Trump by name, but they did little to mask what was on their minds — highlighting how Europe and Japan have been pushed closer by Trump’s actions.

 

The agreement was largely reached late last year. The ceremonial signing was delayed from earlier this month because Abe canceled going to Brussels over a disaster in southwestern Japan, caused by extremely heavy rainfall. More than 200 people died from flooding and landslides.

 

The measures won’t kick in right away and still require legislative approval. But they will bring Japanese consumers lower prices for European wines, pork, handbags and pharmaceuticals. Japanese machinery parts, tea and fish will become cheaper in Europe.

The deal eliminates about 99% of the tariffs on Japanese goods sold to the EU. About 94% of the tariffs on European exports to Japan will be lifted, rising to 99% in the future. The difference reflects exceptions on such products as rice, which enjoys strong political protection from imports in Japan.

 

Overall, European farmers will benefit, Juncker said, though European consumers will be able to more easily buy luscious Kobe beef and famous Yubari melons.

The EU said the trade liberalization will help raise European exports of chemicals, clothing, cosmetics and beer to Japan. Japanese will get cheaper cheeses, such as Parmesan, Gouda and cheddar, as well as chocolate and biscuits.

 

The imported wine and cheese could hurt sales by Japanese wineries and dairies, but Japanese consumers have historically coveted such European products.

 

The major step toward liberalizing trade has been discussed since 2013.

Apart from its deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal. The partnership includes Australia, Mexico, Vietnam and other nations, although the U.S. has withdrawn.

 

Abe praised the deal with the EU for helping his “Abenomics” policies, designed to wrest the economy out of stagnation despite a shrinking population and cautious spending. Japan’s growth remains heavily dependent on exports.

Taken From http://www.latimes.com/world/la-fg-japan-eu-tariffs-20180717-story.html

As Senate Eyes Corker’s Tariffs Bill, Ryan Sounds Increasingly Opposed

Even as Republican leaders in the Senate have become more open to a measure that would roll back some of President Donald Trump’s unilateral trade powers, GOP leadership in the House is sounding increasingly skeptical of the idea.

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House speaker Paul Ryan on Wednesday told reporters that while he doesn’t believe tariffs are the right way to approach international trade disputes, he still sees downsides to requiring congressional approval for Trump’s broad national security tariffs.

“Yeah, I don’t want to hamstring the president’s negotiating tactics,” Ryan said when asked about a measure introduced by Tennessee Republican Bob Corker in the Senate, which would subject tariffs employed under Section 232 of the Trade Expansion Act to congressional approval. Trump has used that provision to impose duties of 25 percent and 10 percent on foreign steel and aluminum, claiming that such imports represent a national security threat.

“I’ve long said I don’t think tariffs are the right way to go,” Ryan added during the press conference. Ryan and his colleagues have disagreed with the administration’s use of the tariffs publicly, but they have been reluctant to pass legislation to prevent abuse of Section 232.

When asked about Corker’s bill in the past, Ryan has pointed to its low odds of passage considering the almost-guaranteed threat of a presidential veto, but he has avoided weighing in on whether he would support the measure. His comments on Wednesday morning indicate increased opposition to the bill among Republicans in the House, despite improvement in its odds of passage in the Senate in recent weeks.

The Senate will address the issue with a vote on a non-binding resolution on Wednesday afternoon. Known as a motion to instruct, it does not have the force of law and represents more of a first step than a clear solution to the problem. Without support from their colleagues in the House, GOP senators have little chance of enacting law through this vehicle.

In a tweet prior to the vote, Corker described the measure as “a test vote.”

“This is a good first step and will get the Senate on the record on this critical issue,” he wrote.

Taken From: https://www.weeklystandard.com/haley-byrd/as-senate-eyes-corkers-tariffs-bill-ryan-sounds-increasingly-opposed

U.S. says to slap tariffs on extra $200 billion of Chinese imports

The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports.

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U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum.

It also includes consumer goods ranging from car tires, , furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.

“For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” U.S. Trade Representative Robert Lighthizer said in announcing the proposed tariffs.

“Rather than address our legitimate concerns, China has begun to retaliate against U.S. products … There is no justification for such action,” he said in a statement.

Last week, Washington imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of U.S. exports to China.

Investors fear an escalating trade war between the world’s two biggest economies could hit global growth.

President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods – roughly the total amount of U.S. imports from China last year.

The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.

The tariffs will not be imposed until after a two-month period of public comment on the proposed list, but some U.S. business groups and senior lawmakers were quick to criticize the move.

‘TARIFFS ARE TAXES’

Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump’s Republican Party, said the announcement “appears reckless and is not a targeted approach.”

The U.S. Chamber of Commerce has supported Trump’s domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump’s aggressive tariff policies.

“Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers,” a Chamber spokeswoman said.

The Retail Industry Leaders Association, a lobby group representing the largest U.S. retailers, said: “The president has broken his promise to bring ‘maximum pain on China, minimum pain on consumers.’”

“American families are the ones being punished. Consumers, businesses and the American jobs dependent on trade, are left in the crosshairs of an escalating global trade war,” said Hun Quach, the head of international trade policy for the group.

There was no immediate reaction from the Chinese government.

Although it was not a direct reaction to the new move from Trump’s administration, the official English-language newspaper China Daily said in an editorial that Beijing had to stand up to Washington.

“China has no option but to fight fire with fire. It has to resolutely fight back while taking proper measures to help minimize the cost to domestic enterprises and further open up its economy to global investors,” it said.

Taken From: https://www.reuters.com/article/us-global-markets/asian-shares-extend-recovery-on-wall-street-gains-idUSKBN1K3017

It’s time for Republicans to end Trump’s trade war

America’s protectionist president has chosen escalation. And now so should the Republican-controlled Congress.

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President Trump’s foolish trade war could easily send America’s accelerating economy into the ditch. But Trump, against all evidence, doesn’t seem worried. That leaves it up to his party to take action against its leader and for its supposed free-market principles.

If you’re a super-optimist, the GOP pushback has already begun. On Wednesday, a day after the Trump administration’s announcement that it plans to hit China with 10 percent tariffs on a further $200 billion in Chinese goods, the Senate voted 88-11 in favor of a GOP-authored provision that would give Congress a role when the president tries to levy tariffs on national security grounds under Section 232 of the Trade Expansion Act of 1962. That’s the section the Trump administration has cited as legal rationale to levy 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports.

Free traders should keep their expectations low, however. The provision was non-binding, and it wouldn’t have passed without Democratic votes. Only 39 Republicans voted for it, and at least one GOP senator, Thom Tillis of North Carolina, said he would not actually vote for the resolution if it had the force of law; he just wanted to support a non-binding signal.

But it is long past time for signals and symbolic measures. After all, Trump was barely in office when he yanked America from the Trans-Pacific Partnership. And while the 2017 Trump agenda centered on health care and tax cuts, 2018 has been dominated by Trump’s trade conflict with, well, pretty much everybody. This is exactly what candidate Trump promised, although too many in Washington and Wall Street bet that Trump’s 40-year hostility to free and open trade was really just empty rhetoric. How wrong they were.

If the GOP is really the pro-growth party of free markets, it must go beyond its squishy, cowering opposition to Trump’s trade war and start pushing actually binding legislation requiring congressional approval before levying tariffs using that national security justification. Congress should begin to reclaim the trade authority it has spent decades giving away to the executive branch. Such legislation has been introduced in the House and Senate by Republicans. But its chances look dicey at best. House Speaker Paul Ryan told reporters Wednesday that while he opposes tariffs, he doesn’t want “to hamstring the president’s negotiating tactics.”

What negotiation? According to Kevin Brady, the GOP chairman of the powerful House Ways and Means Committee, “Despite the serious economic consequences of ever-increasing tariffs, today there are no serious trade discussions occurring between the U.S. and China, no plans for trade negotiations anytime soon, and seemingly little action toward a solution.”

Moreover, what does Ryan think Trump’s endgame is? It certainly seems reasonable that what Trump and his trade hawk advisers are trying to accomplish — and the president’s hostile and disruptive behavior at the NATO summit is more proof of this — is the dismantling of the post-WWII economic and security structure that continues to help ensure global peace and prosperity. To be replaced by what? Oh yeah, a slogan: America First.

Maybe only further escalation and the resulting economic damage — from growth to jobs to the stock market — is what will get the GOP to finally take action against Trump. And that might happen, unfortunately. A new analysis by consultancy Capital Economics estimates that a full-blown global trade war could eventually reduce world GDP by 2–3 percent and U.S. GDP by around 1 percent. And “the hit to profits of U.S. multinational firms would be more severe.” Even worse, all this could potentially hit just as the fiscal stimulus from tax cuts and spending increases fades, slowing growth.

But it shouldn’t take an economic slowdown or recession for Republicans, raised on Reaganomics, to do what most surely know is the right thing.

Taken From: https://theweek.com/articles/784215/time-republicans-end-trumps-trade-war

What’s the endgame for Trump’s trade war?

Early this morning, the United States officially imposed a 25 percent tariff on $34 billion worth of Chinese exports.

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The Chinese government, which didn’t want to be seen “firing the first shot,” says it will immediately impose its own retaliatory tariffs on $34 billion worth of U.S. exports. The Trump administration already has tariffs on another $16 billion of Chinese exports in the works, and is threatening to impose duties on a whopping $500 billion worth if China doesn’t back down.

In other words, President Trump’s trade war is on. And just like an actual war, the start of hostilities begs a question: How do you win?

In April, journalist Keith Richburg wrote about how “at the start of America’s disastrous invasion of Iraq, then Major General David Petraeus … famously asked my Washington Post colleague Rick Atkinson: ‘Tell me how this ends.'” Trump himself once called the endless quagmire of the Iraq War, and the enormous sacrifice of blood and treasure there, “the single worst decision ever made.” A huge part of the problem was that the Bush administration never really nailed down what circumstances would trigger the end of hostilities. As Richburg noted, if Trump has similarly nebulous ideas about what China could do to satisfy him, extracting the U.S. from this conflict could be challenging indeed.

Now, in fairness, the Trump administration did lay out what they ostensibly want back in May. Their demands include a 60 percent reduction in America’s trade deficit with China (which was $375 billion last year), an end to Chinese theft of U.S. intellectual property, no more Chinese subsidies for its own tech companies, a reduction in China’s tariffs on American exports, and for the Chinese government to allow more U.S. investment over there.

But this too is reminiscent of the Iraq debacle. To the extent the Bush administration had a final goal in mind for the invasion, it was to turn Iraq into a democracy. But as specific criteria, this proved to be such a towering order that it was useless as a practical tool for assessing victory. Trump’s demands for China are similarly sweeping. As The Washington Post put it, China would have to “redo just about everything with its economy” to satisfy Trump.

The Chinese, of course, completely balked at the list. For the moment, we have no actual answers for what could happen to convince the White House that its tariffs can come down.

The problems continue if you break Trump’s demands into their constituent parts. On its own, shrinking America’s trade deficit with China is a fine idea. But tackling the problem export by export is a fool’s errand. The problem is that the aggregate flow of American demand to Chinese jobs is not matched by an equivalent flow of Chinese demand to American jobs. We need to get our arms around the whole system: bring the value of the two nation’s currencies into closer alignment by having the Chinese drain off their massive reserves of U.S. dollars.

There’s historical precedent for this. In the 1980s, America was running trade deficits with a number of major countries like France, Britain, Germany, and Japan. Congress threatened tariffs to remedy the problem, and the Reagan administration used that threat to convince the other countries to adjust the values of their currencies and bring the trade deficits down.

Trump could use his own threat of tariffs in the exact same way with China. In fact, Trump repeatedly insisted on the campaign trail that the value of China’s currency was a serious problem. Remarkably, though, that rhetoric has completely disappeared now that Trump is actually in the Oval Office. By all indications, the White House’s plan is to browbeat the Chinese government into directing its economy to buy more U.S. goods and services. That is both wildly impractical and fails to get at the root causes of the problem.

Or take the question of intellectual property. No doubt, China’s practices in this arena are shady. And there’s an obvious value in having trading partners who play by the rules. But when it comes to intellectual property law, the rules themselves are pretty ridiculous. It actually is in our interests for China to become a modern, advanced, wealthy economy. When that happens, they can sell America even better and more advanced goods. But they’ll also have more money to buy more stuff from us. Insisting that the Chinese abide by draconian IP rules will slow that process down.

More to the point, Trump’s fundamental concern is American jobs. But the IP issue has little to do with that. It’s not as if U.S. companies need the Chinese to fork over gobs of licensing and patent fees so they can create jobs and raise wages. American corporations are already enjoying enormous profit margins, and are sitting on a ton of cash. They could invest right now if they wanted to. In other words, the only people who are going to benefit by squeezing IP fees out of the Chinese are wealthy CEOs and shareholders.

It’s worth remembering that the president was a reality TV star. And in that profession, the point is ratings. There’s little differentiation between putting on a show and getting results; the show is the result. And it’s hard to escape the conclusion that this trade war is just another show Trump’s putting on.

In which case, will he ever let it end?

Taken From: http://theweek.com/articles/783093/whats-endgame-trumps-trade-war

Hard to Fathom the Recklessness’: American Workers, Farmers at Risk as Trump Escalates Trade War With China

China immediately hit back with equivalent tariffs and slammed the Trump White House for “behaving like a gang of hoodlums.”

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Brushing aside repeated warnings that a rapid escalation of trade tensions between the world’s two largest economies could place millions of American jobs at risk, President Donald Trump on Friday officially dragged the U.S. into what is already being characterized as “the largest trade war in history” by imposing 25 percent tariffs on $34 billion worth of Chinese goods.

Slamming the Trump administration for “behaving like a gang of hoodlums with its shakedown of other countries,” China immediately hit back at the U.S. with equivalent tariffs, taking aim at American soybeans, corn, and other goods.

“With Trump’s tariffs on China, it’s hard to fathom the recklessness of the president and the utter failure of U.S. politics to allow one psychopath to have so much power,” wrote Columbia University professor Jeffrey Sachs, who described Trump’s decision last month to hit the European Union, Mexico, and Canada with steel and aluminum tariffs as a “psychopath’s trade war.”

In an analysis of Trump’s tariff moves on Friday, The Week‘s Jeff Spross echoed Sachs’ conclusion that the president is recklessly rushing into a trade war without any clear objectives or endgame—aside from “putting on a show.”

“It’s worth remembering that the president was a reality TV star. And in that profession, the point is ratings,” Spross writes. “And it’s hard to escape the conclusion that this trade war is just another show Trump’s putting on. In which case, will he ever let it end?”

While some commentators argued that this first round of tariffs is likely to have massive economic effects, Trump—whose sprawling business empire continues to profit from partnerships with Chinese state-backed companies—suggested to reporters aboard Air Force One on Thursday that he is planning to continue escalating the trade war with China, with the ultimate aim of imposing tariffs on more than $500 billion in goods.

After the first $34 billion in penalties, Trump said, “you have another $16 [billion] in two weeks, and then, as you know, we have $200 billion in abeyance and then after the $200 billion, we have $300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300.”

Providing an indication of the impact Trump’s tariffs and China’s retaliations could have on American jobs, the Washington Post published a chart showing that while some industries will likely see small job gains over the next several years, they will be far outweighed by massive job losses in other industries.

“One factor for the projected loss is that there are 5.1 million jobs in manufacturing industries that stand to be hurt by higher steel and aluminum prices,” the Post reports. “That compares to 313,000 jobs in the industries that make the metals and will benefit from higher prices.”

American farmers—many of whom voted for Trump in the 2016 election and still support him despite the tariffs—are already bracing for impact as China launches its own calculated retaliation against Trump’s trade penalties.

If the trade war continues into the spring of 2019, the owners of thousands of smaller farms, many handed down from generation to generation, could face tough decisions, pitting their pocketbooks against the president’s policies,” NBC News reported on Friday.

https://www.commondreams.org/news/2018/07/06/hard-fathom-recklessness-american-workers-farmers-risk-trump-escalates-trade-war

Mexico’s Lopez Obrador commits to NAFTA after landslide win

 Mexico’s next president, Andres Manuel Lopez Obrador, said on Monday he will seek to remain in NAFTA along with the United States and Canada and that he respects the existing Mexican team renegotiating the trade pact.

Presidential candidate Andres Manuel Lopez Obrador waves as he addresses supporters after polls closed in the presidential election, in Mexico City

 

Lopez Obrador won a landslide election victory on Sunday, getting more than double the votes of his nearest rival, dealing a resounding blow to establishment parties and becoming the first leftist to win the Mexican presidency since one-party rule ended in 2000.

“We are going to accompany the current government in this negotiation, we are going to be very respectful, and we are going to support the signing of the agreement,” he told Milenio TV in an telephone interview, saying the aim was a deal on the North Atlantic Free Trade Agreement that was good for Mexico.

He also said he would pursue a frank dialogue and friendly relations with the United States. Lopez Obrador, who will take office in December, said he would discuss NAFTA with President Enrique Pena Nieto in their first meeting after the election, set for Tuesday.

U.S. President Donald Trump has been openly antagonistic to Mexico over trade and migration since his own presidential campaign. The current NAFTA talks began last year after Trump called for the agreement to be renegotiated to better serve U.S. interests.

Although Trump congratulated Lopez Obrador in a Twitter message on Sunday night, a White House aide then reiterated one of the U.S. leader’s most controversial campaign promises.

“In the case of Mexico, obviously we share a border with them (and) this president has made very clear about building that wall and having Mexico pay for it,” Kellyanne Conway said on Fox News.

Mexican politicians across the political spectrum have long said that Mexico will not pay for Trump’s proposed wall along the southern U.S. border, which he has said is needed to keep out both illegal immigrants and narcotics.

Lopez Obrador has said he wants to make Mexico more economically independent of the United States.

At the same time, he also hopes to persuade Trump to help develop Mexico and Central America in order to contain illegal migration.

STRONG MANDATE

Lopez Obrador, a 64-year-old former mayor of Mexico City, won more than 53 percent of votes in Sunday’s election, preliminary results showed. Mexicans also voted for congressional candidates and thousands of state and local government posts.

Lopez Obrador won the biggest share of the vote in a Mexican presidential election since the early 1980s, giving him a strong mandate both to address the country’s domestic problems and to face external challenges like the threat of a trade war with the United States.

In his victory speech and in comments to local TV networks, Lopez Obrador sought to assure investors he would pursue prudent economic policies and the independence of the central bank. His economic advisers repeated this message in a call on Monday with investors.

Even so, the peso weakened 1 percent against the dollar and Mexico’s S&P/BMV IPC benchmark stock index was also down almost 1 percent as exit polls showed Lopez Obrador’s MORENA party could win the first outright majority in Congress in over 20 years.

Pollsters’ early estimates suggested the party was close to winning the lower house but farther away in the Senate.

Rating agency Moody’s said Lopez Obrador’s election win brought short-term market volatility and raised risks for the oil sector, after he reiterated comments that he would review oil contracts issued under Pena Nieto for signs of corruption.

Taken From: https://isp.netscape.com/entertainment/story/0002/20180702/KBN1JS0R3_2