A Wrinkle in Trade?

While the news media and the markets are captivated by Our President's current game of chicken with China, the US has advanced a very unorthodox idea at the NAFTA renegotiation — and it's a surprisingly good idea.

To avoid US tariffs on automobiles produced in Mexico, manufacturers there would be obliged to pay their assembly line workers $15 an hour.  That is twice the US federal minimum wage, and considerably more than starting salaries at non-union assembly lines in the southern United States. The $15 figure is just an opening gambit, of course: nobody really wants to see underpaid Alabamians sneaking across the border for better-paying jobs in Mexico.  Nevertheless, demanding better pay for foreign workers could be a more intelligent approach to both balance-of-trade and unauthorized immigration concerns.

Labor standards have been a part of trade negotiations for many decades, but usually receive short shrift when agreements are finalized, and seldom are enforced.  Negotiated by and for multinational corporations, they rarely go beyond banning slave or convict labor — not an especially high bar.  (The TPP would have included somewhat higher standards, had it been ratified, but that ship has sailed.)

Globalization has lifted tens of millions out of abject poverty in the developing world — at least in countries like China, where not all the newly generated wealth was co-opted by plutocrats.  If the Tr*mp administration advances a new paradigm that benefits the working poor around the world, it will be ironic — but also very welcome.

Extortion by Tariff

Remember the Bush steel tariffs of 2002?  (Don't all raise your hands at once!)  They were abandoned after eighteen months, having done more harm than good.

Unlike Tr*mp, Bush genuinely wanted to help the American steel industry.  Tr*mp, along with the usual political pandering, is trying to use traditional Tr*mpian "negotiating" tactics to strong-arm concessions on other fronts from American allies.  Of course, those allies will be familiar with Tr*mp's history of paying his bills — so the tactics are likely to fail.

The administration is not even trying to disguise its attempt to gain advantage in the ongoing NAFTA talks; more threatening, though, are the concessions Tr*mp may hope to extract from major steel exporter South Korea.  President Moon Jae-in has been demonstrating far more independence than his right-wing predecessors; and you can be sure the White House is displeased.  Maintaining the threat of war with North Korea is far more important to America's military contractors than an increase in the price of steel: after all, their increased costs will be paid by the US government and its taxpayers.

Moon's domestic support is based largely on the prospect of rapprochement with the North: hopefully, Moon will hang tough.  North Korea will not give up its nuclear weapons, its hard-won protection against external aggression.  Having provided evidence of his offensive capacity, Kim Jong-un will be willing to stop testing bombs and missiles for a time.  The world's best hope is that the Kim-Tr*mp summit will lead to years of talks — years with no immanent threat of war.

Nobody seems to be talking about the country likely to be hurt most by the new tariffs: Brazil, a major exporter of steel to the US.  Even if there is something the US wants to extort from Brazil, Brazil's government is too tied up in corruption scandals to negotiate effectively.  Of course, a bit of corruption won't stop the Chinese from stepping in to fill any gaps the tariffs leave in the Brazilian economy.

The Tr*mp tariffs may last a little longer than the Bush tariffs, but not long enough to justify opening new steel plants; or even to reopen the older, inefficient plants that still can be made operational.  The steel companies will be content just to raise prices.  Some businesses that use steel, though, may decide it's time to offshore production.

Briefs

"Not my fault"
He still can't find Niger on a map, and still doesn't know it's different from Nigeria, but that wasn't the problem.  "Why can't they give their kids names someone can remember, Kelly?  Tell me that!"

NAFTA
It's a real dilemma when the guy who wants to slash your taxes also insists on screwing up your supply chains and demolishing your agricultural exports — not to mention the little problem of a five-year renewable trade agreement being the same as no trade agreement at all.

Tax Reform
Reagan exploded the deficit and the debt, so Republicans just might be willing to do it again to satisfy their wealthy patrons.  With mortgage interest, charity, and 401K deductions proclaimed "safe," and elimination of the deductions for state and local taxes on thin ice, the "deficit hawks" might have to reveal themselves as the hypocrites they've been all along.

Sexual Politics
Predatory behavior by powerful men may suffer a setback in light of scandals in Hollywood, the tech sector, and at Fox News, but America still has a long way to go to overcome its stubborn belief in female inequality.  Who's going to "reform" the religious right?  Mike Pence?

The Republican "Rebels"
It would be nice if some Republicans who weren't about to retire (or die) were willing to point out some of their nominal leader's glaring flaws, but things may have to get a lot worse before that happens.  Self-interest continues to outweigh the interests of their party or their country.