April 1, 2017


President's Growing Trade Gap: A Gulf Between Talk and Action (Benyamin Applebaum, 3/31/17, NY Times)

Mr. Trump blasted the Trans-Pacific Partnership as a "potential disaster" and made a great show of removing the United States from the ratification process. On Friday, one of Mr. Trump's top advisers on trade said the Trump administration planned to use the scorned agreement as a "starting point" for its own deals.

Mr. Trump described the North American Free Trade Agreement with Mexico and Canada as history's worst trade deal, and vowed to overhaul or replace it. The White House is now planning to seek relatively modest changes in the agreement, according to a draft document provided to key members of Congress.

Mr. Trump also chided China on Twitter ahead of President Xi Jinping's visit to his Mar-a-Lago estate in Florida next week, declaring that the United States "can no longer have massive trade deficits." But the Trump administration has not articulated specific plans to shrink that deficit; the Treasury Department has not moved to keep Mr. Trump's promise of declaring China a currency manipulator.

The gap reflects the difficulty of keeping some of Mr. Trump's specific promises. There is, for example, no evidence that China is manipulating its currency. The Trump administration also is under considerable pressure from congressional Republicans and industry groups to avoid costly economic disruptions.

But the gap also exposes a basic divide on trade policy within the Trump administration.

One group, largely campaign veterans like the economist Peter Navarro, still favors the kind of dramatic measures Mr. Trump promised on the campaign trail. This view resonates deeply with the president, who noted on Friday that tough talk about trade is "probably one of the main reasons I'm here."

Another group, which includes many of the economic advisers Mr. Trump has added since the election, like Gary D. Cohn, the director of the National Economic Council, are convinced that measured actions on trade will produce better results.

And so far, that second group appears to be winning most of the internal skirmishes.

Hating colored people isn't a workable economic theory.

Posted by at April 1, 2017 8:53 AM