Thursday, March 15, 2018

How Trump Picked Up a Sharp Stick and Poked America in the Eye.

No one knows how this will end. When Trump decided to slap hefty tariffs on steel and aluminium imports he dragged out the "national security" claim to justify his actions. When he did that he ignorantly broke a long-standing taboo that may set off trade wildfires around the world. He has inadvertently undermined, "one of the pillars of the global trading system that's been in place since the end of WWII."

Since the United States helped cobble together a global trading system out of the ruins of World War II, countries have been been guided by a latticework of rules that determine what measures they can take and what they can’t. There’s one single part of the global trade rulebook, though, that’s essentially left to countries to decide for themselves: When to invoke the so-called national security exception. The exception gives countries an escape clause for any trade measures “necessary for the protection of its essential security interests.”

Most of the times countries have invoked the exception, which was included in the old 1940s-era global trade agreements and the World Trade Organization since 1994, there’s been a clear link of some kind to national security.


But the Trump administration has publicly gone even further. One senior White House official defended the tariffs by arguing that economic vitality is synonymous with national security and cannot be understood solely in the narrow context of defense needs.

We’ve gone rogue,” says one congressional aide who works on trade issues.
This gun’s been lying on the table since Act One. No one’s picked it up for a very good reason. Because it sets off a whole chain of things that you can’t control afterwards.”

The obvious risk is that other countries can now seize on the national security exception to justify pretty much any restrictive trade measure — and the World Trade Organization and its members have no clear grounds to challenge it. The WTO is considering whether to review Qatar’s complaint about other Gulf states, which would be the first time the organization has ever weighed in on a matter that was deliberately left to countries to decide for themselves. The WTO has already expressed concern with the U.S. tariff plan and its justification.

India, for example, has long bridled at international efforts to persuade it to end food subsidies and other economic policies that distort agricultural trade, arguing that food security is an existential concern. Blanchard and other experts worry that other countries could now brandish their own national security exceptions to limit U.S. agricultural exports, one of the healthiest U.S. export sectors, worth more than $130 billion annually in recent years. Indeed, China has already hinted that $15 billion in U.S. soybean exports are in its crosshairs in reprisal for other recent Trump administration trade actions.

This is what you get when you wind up with an old, mentally infirm president whose own Secretary of State calls "a fucking moron."


Anonymous said...

The problem is the complete lack of consequences for Trump's behaviour so far. The GOP actively shields Trump from the consequences of what he says and does, with the US media being complicit in it. It's time other countries started pushing back on this global menace.

For a start, it's clear that the US is not renegotiating NAFTA in good faith. Trump admitted lying to Trudeau on trade and is threatening tariffs if Canada doesn't capitulate to his demands. Canada should leave the negotiation and ask Lightheiser to call when they've decided to bargain in good faith. To do anything less shows total weakness, which is what Trump is looking to see.


The Mound of Sound said...

Trump is indeed a predator, Cap, and good faith has no part in his ethos. The way he mocked our prime minister at last night's GOP fundraiser should leave no doubt about his approach on NAFTA. He pursues whatever he can get and then a "victory" percentage atop that. He cannot consider a deal a success unless the other party has lost.

Trudeau won't walk away on NAFTA. Those to whom he is beholden won't hear of it.

Jay Farquharson said...

There is no "gain" in walking away from the NAFTA Negotiations.

BTW, the Trudeau Government is not negotiating with Hair Twitler, they are side negotiating with US Governors, Senators and Representatives who's State's Economies are reliant on NAFTA.

All that's happened so far is lots of jaw, jaw, jaw, with very little common ground met, ( mostly verbatum existing NAFTA rules).

If you can't or won't give Javanka a $10 billion dollar "loan" that you will never get back on 666 5th Street, don't make Trumpster tochkies, have a few billion dollars that needs laundering, and have proven that a Trump Tower is a epic fail, that's what you do.

Be nice, be civil, don't give an inch, and keep talking until Trump either implodes from domestic pressure ( NRA, etc), or blows up, looks like an ass and cost's 'Murkin's billions of dollars and millions of jobs.

Even then, Hair Twitler will try to claim "victory", but he's pissing off the non-Russian Ogliarches more and more, each and every day.

The Mound of Sound said...

I suspect the man is fast running out of rope, Jay.

Northern PoV said...

"I suspect the man is fast running out of rope, Jay."
Alas ... he is just getting started.
He has decided to kick the can down the road on Korea (thank god) and caved in to the mighty Kim.
Given the team he is now installing, I see him consolidating power while he attempts to provoke a war with non-nuclear Iran.

Anonymous said...

Oh thank God, business as usual then. The neocons are back in the House!