Trump trade czar eyes exit hailing tariff power his critics hate
InternationalDec 27. 2020Robert Lighthizer and Liu He, China’s vice premier, wave before a meeting at the Office of the U.S. Trade Representative in Washington, on Oct. 11, 2019. MUST CREDIT: Bloomberg photo by Andrew Harrer.
By Syndication Washington Post, Bloomberg · Shawn Donnan
Robert Lighthizer has built a career on being a wily contrarian.
So it shouldn’t be a surprise that President Donald Trump’s trade czar is going out tilting at a consensus among mainstream economists that Trump’s signature policies — his tariffs on billions in imports from China and steel from around the world — have been a failure by most metrics.
The U.S. is on track to end Trump’s presidency and a pandemic-affected 2020 with a trade deficit in goods and services larger than the one he inherited, Lighthizer’s critics point out. At least 100,000 fewer Americans were employed in manufacturing in November than at the start of Trump’s presidents.Yet the U.S. trade representative, who is preparing to leave office in January believing he has overseen a sea change in American trade policy, particularly toward China, sees a different storyline borne out by the data.
Strip away the impact of this year’s pandemic, Lighthizer argues, and it’s clear the Trump trade doctrine has delivered. Five of the six quarters prior to the pandemic saw decreases in the U.S. goods and services deficit, he points out, though in the eight prior to that the trend went the other way. Before Covid-19 hit the economy in February, he adds, the U.S. had gained more than 500,000 manufacturing jobs on Trump’s watch.
Most importantly, though, those changes had translated into higher wages for American workers with the median household income in 2019 rising 6.8% from the year before.
“That’s the highest in American history,” Lighthizer said in an interview.
It may frustrate his critics but Lighthizer’s pushback is evidence that, as in its other forms, Trumpism’s trade legacy may be an enduring one.
President-elect Joe Biden and his aides have already signaled that in part by vowing a pro-worker focus as they rebuild the U.S. economy and a trade policy that will be a component of what they are dubbing a “foreign policy for the middle class.” Though what that means in substance remains unclear.
More clear is that Trump’s protectionist episode and the support it garnered him again in key industrial states like Ohio this year are likely to continue encouraging the Democratic Party’s own trade skeptics and progressives. Which is why the battle over the economics of Trump’s trade legacy matters and will shadow the work of Lighthizer’s likely successor, Katherine Tai, the senior congressional staffer Biden has chosen for the role.
It is in many ways a theological battle. Adam Posen, the head of the Peterson Institute for International Economics, which has led the analytical charge against Trump’s trade policies since 2016, likens any statistical defense of them to those offered by climate change deniers, or vaccine skeptics. To critics like Posen, Trump and Lighthizer’s preferred tool — the tariff, or import tax — has just gone through a very public discrediting experiment.
To Lighthizer and his supporters, however, the mighty American tariff has finally been absolved of what protectionists have long argued has been the unfair taint hanging over them since the Smoot-Hawley era of the 1930s, which economists have long blamed for at least prolonging the Great Depression around the world.
Lighthizer argues none of the critics’ predictions of economic or financial market collapses and price surges that accompanied the rollout of Trump’s tariffs in 2018 and 2019 have materialized. “It’s an important lesson that these catastrophes that they predicted didn’t happen,” he says.
Nor have the steel tariffs that critics have pointed to as one cause in the industrial output recession that the U.S. suffered in 2019 really hurt manufacturers, he argues.
Manufacturing jobs grew most robustly in 2018 when the tariffs first went in place and steel prices rose, he points out. And conversely that jobs growth slowed as steel prices fell in 2019. To Lighthizer, that is proof that a rescue effort for an essential industry could be done without major economic disruption.
“You have to have a steel industry,” Lighthizer says. “There is literally no evidence to support this notion that introducing the tariffs had a negative impact on manufacturing.”
Critics would argue the slump in steel prices that followed the initial spike and the softening manufacturing jobs market and industrial output in 2019 were evidence of an impact on demand. Prices rose and demand fell in response. Which meant that by the end of 2019 even U.S. Steel Corp. was announcing layoffs.
The tariffs levied on imports from China worth some $370 billion before they went into place have also had no negative economic effect, Lighthizer insists, despite credible studies pointing to the opposite.
Lighthizer contends the tariffs together with a “Phase One” trade deal signed with Beijing in January have helped rebalance trade with China and been part of an effective pressure campaign to shift supply chains out of China.
“The administration’s policy has put tariffs on things that they had taken advantage of us on. It has helped to block their anti-market industrial policy. It has done all of these things. Without question it has changed the nature and it has set up rules which no one else had done before,” Lighthizer said.
The deal he negotiated with China is often derided by critics as a dressed-up collection of unrealistic purchase commitments that Beijing has yet to live up to. It also failed to address fundamental issues like Chinese industrial subsidies.
Yet Lighthizer and his supporters argue the more important components include a mechanism to deal with bilateral economic disputes and new Chinese commitments on intellectual property. It guarantees greater access for U.S. financial services companies to the Chinese market. Its currency rules may prove important in the future. Beyond the commitment to buy more U.S. agricultural exports by Beijing were real changes in the regulatory barriers to those farm products, Lighthizer says.
“And they’ve implemented almost all of it,” he says.
The Trump administration has helped usher in an awakening around the world to the threat posed by China and its economic model, Lighthizer says, though he conceded that China’s own behavior in recent years has contributed to that.The mainstream view before the Trump administration, Lighthizer says, was that “China was a force for good in the trade world. And that’s completely changed not only here but in Europe and Africa and South America.”
Had Trump won the November election and were Lighthizer staying on he would be continuing to press for change in the relationship with China. Lighthizer believes the Biden administration should use the leverage it has from the existing tariffs to build on Trump’s trade deal and avoid a return to the endless and usually ineffective “dialogues” that prior administrations got caught up in.
Lighthizer believes he might have been able to close a deal with the U.K. before a congressional deadline next year. But he is also not convinced about the economic value of such a deal. His U.K. counterparts seem to want a deal for other reasons including a validation of their post-Brexit place in the world.
Were he to continue in office Lighthizer also would be turning his spotlight to a growing trade deficit with the European Union, one driven largely by automobiles. And to the World Trade Organization, to which he still attributes many of the failings in the global trading system.
Lighthizer is now in discussions with his EU counterpart, Valdis Dombrovskis, over a possible solution to a long-running trade fight over subsidies provided to Airbus SE and Boeing Co. that has led to a new round of WTO-authorized trans-Atlantic tariffs.But Lighthizer’s complaint is that the WTO system now often results in few substantial changes in practice.
That fits into the broader context of a discussion over new rules curtailing industrial subsidies — and China’s in particular — that many trade policy makers would like to see the WTO have. For now, Lighthizer says, the WTO is like a laughably ineffective on that front and the Airbus case is an example of it. He remains convinced some European governments will continue to find ways to subsidize Airbus as it competes with Boeing and wants to see countries like France and Germany forced to pay some sort of compensation.
“It literally is like somebody is robbing your house,” Lighthizer says. “You go to court and have them stop robbing your house and they start robbing your garage.”His skepticism is what drove a U.S. war on the institution’s appellate body, which Lighthizer crippled by blocking the appointment of new judges. He’d like to see a system of one-off arbitration instead and argues the appeals process until now has removed any incentive to negotiate new rules.He also has flagged his desire to see the WTO engage in a global renegotiation of its members’ tariff schedules. Too many large developing economies benefit from high tariff walls negotiated when they first joined the institution, he says.
The answer for Lighthizer is a universal tariff level, a 10% flat tax for trade if you will. With a bit of wiggle room allowed for “some small amount of your goods because you have political reasons.”
Which really comes back to Lighthizer’s belief in the power of tariffs, the one that irritates his critics and economists most. The cure is simple, Lighthizer said: “Everyone ought to have the same tariffs.”
By The Washington Post · Derek Hawkins, Michael Kranish, Simone Sebastian
ANTIOCH, Tenn. – Authorities investigating the Christmas morning explosion in downtown Nashville converged on a home in Antioch, Tenn., about 10 miles southeast of the blast site Saturday afternoon, as law enforcement agents continued to gather evidence and run down hundreds of tips.
Investigators think the person living at that address has a connection to the bombing. One theory investigators are pursuing is that the man blew himself up in the RV, according to two people familiar with the matter, who cautioned that officials are still pursuing numerous leads and that no final conclusions have been reached.
Several neighbors said a light-colored recreational vehicle similar to the one that blew up Friday morning had been parked in the backyard of the home for several months before the explosion. So far, investigators have not found evidence pointing to other potential conspirators or threats to public safety, according to multiple people familiar with the case.
A day after the explosion, AT&T communication networks remained disrupted throughout Tennessee, knocking out residential phones, cellphones and service at 20 call centers for 911. Business and government functions were hobbled, and flights were temporarily grounded at Nashville International Airport.
Tony Rodriguez lives in the second home of the duplex that law enforcement searched today. He said investigators removed a computer motherboard from his neighbor’s home, among other affects.
Rodriguez said he never spoke to his neighbor and didn’t know his name. The few times Rodriguez saw the man, he was tinkering with an antennae above the house and power washing the driveway behind their home. Rodriguez said the neighbor kept several “No Trespassing” and warning signs around his property, particularly where he kept the RV.
“He always seemed like an oddball,” Rodriguez said.
In an afternoon news conference in Nashville, FBI special agent Douglas Korneski said that there was “activity going on” in the Antioch area but that he “can’t confirm any individuals or anybody we’ve identified.”
The blast rocked the city around dawn Friday when an RV detonated near an AT&T transmission building on the city’s busy Second Avenue, home to a strip of honky-tonk bars and restaurants.
The incident – which officials described as an “intentional act” and “deliberate bomb” – left dozens of buildings mangled and sent three people to the hospital with what police said were noncritical injuries.
Officials said Saturday that the city was safe and that there were no known threats, but the area remained sealed off and under curfew over the weekend as investigators combed through the wreckage.
“It’s like a giant jigsaw puzzle created by a bomb that throws evidence over multiple city blocks,” U.S. Attorney Donald Cochran said. “They’ve got to gather it, they’ve got to catalogue it, they’ve got to put it back together and find out what the picture of that puzzle looks like.”
Earlier in the day, Tennessee Gov. Bill Lee asked President Donald Trump for federal assistance in response to the explosion, saying the damage to businesses and the disruptions in Internet and cell service caused by the blast were too severe for the state to handle alone.
The Republican governor said he spent part of the morning touring the destruction left by the explosion. “The damage is shocking and it is a miracle that no residents were killed,” Lee wrote in a tweet.
In a letter to Trump, Lee referred to the incident as an “attack” carried out with a “vehicle-born improvised explosive device” and called on the president to issue an emergency disaster declaration, unlocking financial and physical assistance from the federal government.
The governor estimated that the state had spent at least $175 million responding to other disasters since early 2019 and said federal help was essential.
“These extraordinary state and local expenditures have reduced our capacity to recover from this current event,” Lee wrote. “Given these factors, the severity and magnitude of the current situation is such that effective response is beyond the capabilities of the state and affected local governments.”
The White House has not publicly responded to Lee’s request. Trump was briefed on the situation yesterday and is monitoring developments, a spokesperson said Friday.
The shocking sequence of events leading to the explosion began before daybreak Friday morning, when residents were startled awake by the crackle of gunfire and called 911. Some later speculated that the noise was a recording intended to wake them up.
Shortly afterward, a strange warning began to play from a light-colored, older-model RV parked on Second Avenue.
“It was a computerized message of ‘Evacuate now. . . . This vehicle has a bomb and will explode,'” said Betsy Williams, who lives in a building adjacent to the blast site. The warning soon changed to a 15-minute countdown, prompting some residents to flee.
Police arrived at the scene around 6 a.m. local time. They didn’t see any evidence of a shooting, officials said, but saw the RV and called in a bomb squad. A half-dozen officers went door-to-door telling residents to leave the area, even turning away a man walking his dog.
The vehicle detonated at 6:30 a.m., spraying debris and ash through the streets and sending a column of flames and smoke curling above the rooftops.
Near the spot where the RV was parked on Second Avenue, about 15 people were at the five-story Nashville Downtown Hostel – a much smaller number than the capacity of 300, because of the pandemic and Christmas. Unlike some others in the area who evacuated before the blast, the staff and guests at the hostel were unaware of the situation until the blast went off at 6:29 a.m., a time recorded by the building’s closed-circuit television camera.
The video from the camera, provided by the hostel to The Washington Post, shows a double set of glass doors at the entrance, with “NASHVILLE” printed on them in dark lettering. Three police officers can be seen walking at a steady pace on the street. Moments later, the blast blows out the doors; debris rains down. Flashes of light fill the scene as the concussive force ripped across the entryway.
Ron Limb, 54, the hostel’s owner, was home in bed, awakened by a call from someone at the hostel. It is one of two such properties he owns in Nashville, a city that he said he fell in love with when he moved from California, attracted by its vibrant culture and youthful outlook. The building began life in 1880 and once was a candy factory. Limb bought it in 2011, spent a year restoring it, and has since introduced thousands of guests from around the world to his adopted hometown.
Limb said the staff rushed into action.
“They went around, knocked on every door, got every guest out of the building,” Limb said. “Some were asleep, rushed out in pajamas and underwear, without provisions to deal with the 20-degree weather.”
Limb said fire sprinklers had been activated, causing flooding in the building. Police blocked him from the scene for security reasons, and he spent hours trying to get the city to turn off the water, a task he said was accomplished midday Saturday.
The area around the blast site remained closed off as agents worked their way inward from the outermost perimeter of the crime scene. A curfew remained in effect for the area through Sunday.
While there were no confirmed fatalities, Nashville Police Chief John Drake said in a Friday night news conference that officers found tissue that could be human remains near the explosion that they were preparing to examine. He said police had not identified a suspect or motive. The department released a photo of the RV, which they said arrived on the street at 1:22 a.m. Friday.
Mayor John Cooper said at least 41 businesses were damaged and “there will be others as we see the full extent of this.” He said the city would focus on rebuilding but cautioned that it “will be some time before Second Avenue is back to normal.”
In his letter to Trump, Lee noted that many of the buildings rocked by the blast were historic and needed to be assessed by an engineer to make sure they are structurally sound.
As business owners and residents started to take stock of the damage Saturday, a city non-emergency number for people in the affected area remained out of service.
“We are aware property owners/residents are experiencing difficulties, and are working to resolve them as soon as possible,” Cooper tweeted. “Please know the explosion impact area is still a federal investigation zone.”
McConnell, GOP face splits with Trump over defense, relief
InternationalDec 27. 2020Senate Majority Leader Mitch McConnell, R-Ky., wears a protective mask while walking to his office at the U.S. Capitol in Washington, D.C., on Dec. 21, 2020. MUST CREDIT: Bloomberg photo by Oliver Contreras.
By Syndication Washington Post, Bloomberg · Laura Davison, Billy House
Congressional Republicans, led by Senate Majority Leader Mitch McConnell, face high-stakes decisions in coming days over two giant pieces of bipartisan legislation that President Donald Trump savaged this week.
Trump on Wednesday vetoed a $740.5 billion annual defense spending bill, which passed both chambers of Congress with greater than two-thirds majorities earlier this month.
On Saturday, Trump tweeted that he will “not stand by and watch this travesty of a bill happen without reigning in Big Tech,” but the outcome of the legislation now rests with lawmakers. House Speaker Nancy Pelosi plans a vote to override that veto next week, with McConnell’s office pledging guidance on his intentions after the House acts.
Also in play is a mammoth $2.3 trillion covid-19 relief and government funding bill. Since the measure passed this week Trump has attacked it repeatedly for including “wasteful” spending and for having insufficient stimulus checks — after the White House earlier signaled he would sign the legislation.
House Republicans blocked a bid Thursday by Majority Leader Steny Hoyer to increase the payments to $2,000 — up from the $600 previously authorized. Democrats blocked a Republican counterproposal that would repurpose foreign-aid money in the portion of the bill to fund the government.
House GOP leader Kevin McCarthy, in a letter to colleagues on Wednesday night, said Congress should “reexamine how our tax dollars are spent overseas,” though those provisions were part of a bipartisan appropriations process.
Democrats plan to vote Monday on new legislation to codify the $2,000 payments for most American adults and children. They could also vote on another stopgap measure to fund the government past the current spending deadline of midnight that day. While that would avert a government shutdown if the Senate also passes it and the president signs it, it is still unclear what Trump plans to do with the larger pandemic relief and annual spending bill Congress passed on Dec. 21. The bill has been flown to Florida, where Trump is spending the holidays, according to a person familiar with the matter.
“We can only do in the House what we can do,” Hoyer told reporters Thursday. “we are not going to let the government shut down. We are not going to the let the American people down from our perspective.”
David Popp, a spokesman for McConnell, didn’t respond to questions about Trump’s call for increased direct payments and Pelosi’s plan to pursue this in the House.
How Republican leaders respond to Trump’s criticisms could affect the outcome of the Jan. 5 Georgia runoff elections that will determine control of the Senate for the next two years — and whether McConnell will continue to oversee the flow of legislation and political and judicial nominations in Washington.
Trump rejected the defense policy bill on Wednesday, saying the legislation was a “gift” to China and Russia and failed “to include critical national security measures.”
Trump wanted to attach to the defense measure an unrelated provision to eliminate Section 230 of the Communications Decency Act, which protects technology companies from liability for most content published by their users. He had also criticized the legislation because it contained a provision for renaming military installations that honor Confederate generals.
The chairman of the Senate Armed Services Committee, Jim Inhofe, said the defense bill is “vital to our national security and our troops.” Inhofe, an Oklahoma Republican, said Trump’s complaints about technology liability could be addressed in different legislation.
“I hope all of my colleagues in Congress will join me in making sure our troops have the resources and equipment they need to defend this nation,” Inhofe said in a statement shortly after Trump vetoed the bill.
The bill, which includes military pay raises, hazard pay and health benefits for soldiers, has successfully cleared Congress for the past 59 years.
Lawmakers’ plans to override Trump’s defense bill veto next week will be the first time Trump is overruled by Congress. If Trump vetoes the combined pandemic relief and spending bill, that could be the second. Trump has rejected several bills during his tenure, but Congress has yet to successfully override any of his vetoes.
The decision about whether to expand the stimulus payments will also highlight growing political division in Trump’s party, splitting populists eager for more direct aid, like Senator Josh Hawley, against fiscal conservatives, including Senator Pat Toomey, who have been lobbying for months to keep the overall size of the stimulus package under $1 trillion.
Senate Minority Leader Chuck Schumer urged McConnell to take up a vote on the larger payments in a tweet Wednesday.
Trump’s moves also complicate the campaign politics for Georgia Senators David Perdue and Kelly Loeffler, who are seeking to ward off Democratic challengers Jon Ossoff and Raphael Warnock. A double win for Democrats would give them control of the Senate, albeit only through the tie-breaking vote of Kamala Harris as vice president.
Warnock and Ossoff have backed bigger payments, and dared their opponents to do the same. Loeffler stopped short of specifically calling for $2,000 payments, saying at an event Wednesday that she supports “redirecting any wasteful spending to be very targeted at families and businesses who have been impacted by this virus.”
The president has given Democrats an opportunity, by pitting himself against arguments put forward by his own party, said Gordon Gray, the director of fiscal policy at the right-leaning American Action Forum.
“For Pelosi and Schumer, it was never a problem with them to have higher rebates, so they are happy to put McConnell and McCarthy on the spot and cause problems for the Georgia delegation,” Gray said. “Fundamentally, the president has abdicated his responsibility. He was completely disengaged from the process.”
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เศรษฐกิจจีนจะแซงหน้าสหรัฐได้เร็วกว่าที่เคยคาดการณ์ไว้ เนื่องจากรับมือกับ Covid-19 ได้ดีกว่า
Robert Lighthizer and Liu He, China’s vice premier, wave before a meeting at the Office of the U.S. Trade Representative in Washington, on Oct. 11, 2019. MUST CREDIT: Bloomberg photo by Andrew Harrer.
Senate Majority Leader Mitch McConnell, R-Ky., wears a protective mask while walking to his office at the U.S. Capitol in Washington, D.C., on Dec. 21, 2020. MUST CREDIT: Bloomberg photo by Oliver Contreras.
