More tariffs paid by US consumers

[Dill]

(06-10-2019, 04:03 PM)Sociopathicsteelerfan Wrote: The objections to the TPP were very bipartisan if I recall correctly.  It's been awhile so I don't recall specific issues, but, again if memory serves, there was a lot of concern about further job loss to low wage nations and inadequate copyright protection for US businesses. 

There were bipartisan concerns, certainly.  E.g., the US wanted stronger digital copyrights than our partners, who felt this would stifle innovation (e.g. control 70 years after an author's death). I agree with our partners on most of that. The other major concern was that the U.S. would lose some thousands of manufacturing jobs in the first few years. I can't disagree with that, but it would be balanced by improving the US trade deficit. Now that the US is shut out the final form of the TPP, The Comprehensive and Progressive Trans-Pacific Partnership, that means that Australia, Canada and Mexico are selling beef and wheat to Japan's massive market, not to mention South Korea and Taiwan. The US would have lost jobs, now it will likely lose businesses in the agricultural sector. Trump has expressed a willingness to rejoin the CPTPP "if the deal is right," but it will clearly be on terms set by those who current own the deal.

I brought up the TPP because 1) China was not in it, and 2) in its current incarnation, even without the US, it controls 13% of the global gdp--an economy roughly the size of China's, whose constitutive members could work effectively to curb Chinese economic malpractice/dominance. I.e., it would be another effective counterweight to China. Were the US able to get the EU, NAFTA and the CPTPP all coordinated and setting conditions on Chinese trade, that would have tremendous effect. China would not want that, but they don't have to worry about since Trump took the US out of the TPP and is throwing steel. tariffs at the EU, many of whose members the president has called "deadbeats" and are looking for ways to become less reliant economically and military on the US. Chinese sell steel too, as the EU countries well know.

US papers may be full of bluster between Trump and Xi, but I don't see a high probability that any good will come from a unilaterally instigated tariff war which puts "losing face" front and center, and so could tank both the US and Chinese economies.  I also think the Chinese consumers would weather a trade-war/recession/depression much better than whiny 4th generation American consumers. And Xi won't have to stand for re-election as Trump will soon.

Potential trade partners won't see the US as "the only guy who can stand up to China." Rather they will worry about how a recession/depression would drag their economies down and look for individual or collective buttress against that. For the first time since 1945, international leadership will have to come from another country, or perhaps a coalition thereof, if China is to be effectively discouraged from bad behavior and continue its integration into the world economy.  More in my next post . . .