"If the plan is to disrupt the existing regime, in the conviction that global free trade has undermined American interests and workers, what is meant to replace it?... Ever since Trump was first elected, in 2016, his main guru and interpreter on trade, the man largely charged with converting the President’s protectionist instincts into theory and practice, has been a voluble, savvy seventy-seven-year-old Washington lawyer named Robert Lighthizer.... The view Lighthizer has come to after nearly half a century working on the issue is that free trade is a fiction, believed only by Americans and economists (and, intermittently, by the British). 'Free trade doesn’t exist anywhere in the world,' he told me. 'It just doesn’t. And it doesn’t largely because of details.' Even in the absence of tariffs, countries do all sorts of things to protect domestic manufacturing.... What Lighthizer would like to see, as he explained to me, is 'a new trade system,' in which the U.S. walked away from the disadvantageous trade agreements of the nineties and negotiated a new series of agreements with other democracies, wealthy and not, that fixed those mistakes.... 'We have the momentum politically to do it,' Lighthizer said. 'We have the benefit of a trillion-dollar trade deficit, which gives us enormous leverage. We take unilateral action, we disrupt the system, we build over not too long a period toward what I suggest.'..."
From "Why Is the Mastermind of Trump’s Tariff Plan Still Sitting at Home in Florida? Robert Lighthizer, the former U.S. Trade Representative, lost his bid to rejoin the White House, but he still believes the President’s protectionist instincts can jump-start American manufacturing," by Benjamin Wallace-Wells" (The New Yorker).
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Why is the New Yorker asking?
Can't they just make something up - or mind-read - like usual?
I don’t so much mind that the United States is the protector of the world, in both military and economic might.
At the same time I can’t say that I appreciate the fact that the rests of the world on a daily basis bites the hand that feeds it.
With no repercussions.
The last 50 years of world economic history can be described as a massive globalist attempt to transform nations into "economic zones". This zone produces fossil fuels, and this zone has cheap manufacturing, and this zone makes cutting edge weaponry, and this zone produces great cars etc etc....it's like something out of the Hunger Games.
Nations are not economic zones. Their people have interests that extend beyond commerce into things that are cultural and intangible, things globalist WEF stooges don't get and don't care about. It's high time the USA reshored so much of the capability it has shipped overseas, even if that means goods become more expensive in the short-term as newly reshored industries struggle to optimize efficiency.
Building a better mousetrap is in American DNA and you get more of what you incentive, so incentive American businesses to prioritize American profitability and create American jobs. Other nations do this everyday, so why can't we.
I believe theft is wrong. But as long as thieves exist in the world, I’m going to have locks on my doors. Same with free trade; if other countries don’t play by the free trade rules, we have no obligation to do so.
A related point is that we humans are not Homo Economicus: economics are not the only factor in making decisions. I would be leery of purchasing a super cheap iPad from a guy selling them out of the back of a rental truck, even if they are a ridiculously low price. Or those athletic shoes were made in a sweatshop in the far East. Or those diamonds came from certain places.
Why did we let China into the IMF and open markets to it, when it did not reciprocate? What benefit other than cheap goods did that give Americans? US companies that set up "joint partnerships" (the ONLY way to open a factory there) on the mainland all learned that they were soon reduced to junior partner. Then that all their IP was being repurposed for Chinese competitors. The EU had lesser but still oppressive protectionist policies of their own.
Lightheiser is correct. "Free" trade is not free. It is usually unfair to the American companies operating without the same subsidies. And the threat of tariffs is their highest use and most common purpose, just like Trump's first term showed us.
My guess? When Trump needs Lighthizer publicly involved, he will bring him in. I bet there's a lot we don't know. I do know we are working in a world more guided by realism than the one we left behind.
"It's high time the USA reshored so much of the capability it has shipped overseas, even if that means goods become more expensive in the short-term as newly reshored industries struggle to optimize efficiency."
I used to be big on "free-trade", but I've completely changed my mind on this as I've watched the world over decades. Who cares about lowest-price and highest-efficiency if you can't get something at all? Covid was a wake up call that so much of our medical supplies come from overseas. Not smart.
The answer to why Lighthizer is still in Florida is his age. One of the Fox News people, I think maybe Ingraham, mentioned right after all the Cabinet nominations that they're all Gen-Xers; there has finally been a generational succession in US senior leadership. Boomer Trump has realized that most of his fellow Boomers don't have his energy, the ones that do are just as egotistical as him and set in ways that don't really jibe with his, and we need to grow a new generation of senior leaders before we turn into Red China. Trump may just want to keep Lighthizer on speed dial for pearls of wisdom while letting someone younger do the needful. Kind of why Giuliani's not the AG.
JSM
Decades of experience obtaining regulatory clearances to ship products overseas convinced me that most of those requirements, everywhere, were fundamentally protectionist, not for "safety" or whatever. Tariffs by other means.
Looking at you, Brasil.
if Americans are the mouse what does that DNA get them?
I am a Bob fan. I wish he was working with the Administration.
The consensus view seems to be that, because the new team is made up of true believers, the Trump 2 administration will be more disciplined/focused than Trump II'm not confident this is right.
Ha! In your dreams.
"if Americans are the mouse what does that DNA get them?"
A piece of gorgonzola as a last meal.
Labor, environmental, and monetary arbitrage preclude "free trade".
Seems like a lot of "free trade," from our perspective, means simply abandoning or agreeing to hobble our domestic industries so that a foreign country can become that much wealthier. What the globalists all hold as their most cherished belief is that the West, but most especially the U.S., has had it too good for too long, and needs to share the wealth. Trump's America-first outlook is the antithesis of this. What he's pushing for is that we leverage all of the advantages we have to become as wealthy and successful as possible, and that the smart countries, if they want to improve their own standards of living, should do the same thing. The U.S. doesn't exist to subsidize the rest of the world.
Free trade theory depends a lot on something called comparative (not competitive) advantage. How can we compete with these poor people who work for nothing, vs how can the poor people compete with technologically advanced countries, two theories of how each is disadvantaged.
Comparative advantage is why the economics department secretary walks papers to the dean's office instead of the head of the economics department, who walks faster than she does.
the advanced countries have a better use for workers than the jobs that get offloaded into poor countries, in other words, so free trade is possible.
Not having a better use is a problem, say regulations prevent it.
Feck the Yew Norker!
Why Is the Mastermind of Trump’s Tariff Plan Still Sitting at Home in Florida?
One possibility is that he isn’t the “mastermind” of Trump’s tariff plan. Lefty journalists seem to have trouble with (1) the clear evidence that Trump is much smarter than they are, and (2) his degree is in economics — and from Wharton, back when it was still Wharton.
I think it would be more accurate to say that the owner class took advantage of major advances in trading tech (like containers) to shift from a competition between nations to a competition between classes. Which is why they now own almost everything.
Kak bringin’ teh KAK!!!
WTO. Right reasons. Wrong execution. Toothless. Trump's idea of an External Revenue Service is good but he needs to go after the trillions owed to us by other countries from past judgements, not just tariffs alone. I haven't heard him expound on that yet
Love you, Big Mike. You are right that DJT is a darn smart man. Brother Bob, however, is the intellectual godfather, IMO, of tariffs that R's can love.
1). I personally am willing to pay 20% more for my plastic lawn furniture so that my neighbors don't lose their jobs and my community doesn't turn into Methville.
2). Total production is not the only metric that matters. The distribution of the resulting wealth is important as well. That's why a redistribution of wealth from capital to labor, not through government redistribution but by removing the artificial inflation of the labor supply through both illegal immigration and abusive legal immigration (H1-B, etc.) is a good thing.
3). Wars are won not just by having the most high-tech weapons, but by being able to out-manufacture your opponents. We beat Japan in WWII by manufacturing ships in greater quantities and much faster than they could. Weakness invites war. We need China, Russia, Iran, etc., to calculate that there is no point in starting a war with us because of our manufacturing capability.
4). You get less of whatever you tax. It would be better for us to have fewer imported items THAT WE CAN MAKE OURSELVES and more income, so rebalancing the government's revenue stream would be a good thing.
Therefore: Use the tool of tariffs and reject the failed approaches of the Bush administrations.
Scott Bessent pushes gradual 2.5% universal US tariffs plan ~ Financial Times
"Trump’s Treasury secretary wants levies to rise month by month in order to give businesses time to adjust"
“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.” ~ Scott Bessent
Except it's the American consumer -- who will pay the tariffs. Bessent is a very smart guy. I wonder if he truly believes in this, or is he working to manage the boss's expectations.
Tariffs only push up US consumer prices. The last time Trump was in power, the trade deficit only grew with China, notwithstanding his use of tariffs.
Like all populists, he asserts simple solutions to complex problems and only worsens things for his own people. He's pursuing an America Last policy.
I hope Trump voters enjoy the higher prices.
Excellent points Professor.
I thought leftists were fans of using tax policy to influence individual and business behavior. Tariffs are taxes on doing business with disfavored overseas entities. This should encourage domestic production and consumption.
What's the problem?
Exactly, Fred Drinkwater. Exactly! You can completely avoid the tariff simply by buying U.S. made goods. And since the U.S.-made goods will have to be made in brand new, state-of-the-art manufacturing facilities (because the Bush-Clinton-Bush-Obama administrations sent all our manufacturing overseas), those goods should be of higher quality that cheap crap from China.
Or we could also just pay a little more for our plastic lawn furniture. . .
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