View Full Version : Trump, trade, and diplomacy
GratefulCitizen
01-30-2017, 13:25
The opponents to Trump's economic protectionism say that it will start a trade war and everybody will be worse off for it.
There is an element of truth to this...in the short-term.
What about the long-term?
Given his pattern of long-term thinking and his particular areas of expertise, it is likely that Trump is seeing something others are not.
Preemptive strikes are an option to consider if waiting will just result in relative weakening.
Could Trump be looking to use an economic preemptive strike in order to prevent the need for future military conflict?
Thoughts?
Streck-Fu
01-30-2017, 13:46
I see him using economic policy to motivate US companies to return more manufacturing to the US. I don't really see it as a diplomacy policy to avoid military conflict.
The opponents to Trump's economic protectionism say that it will start a trade war and everybody will be worse off for it.
There is an element of truth to this...in the short-term.
What about the long-term?
Given his pattern of long-term thinking and his particular areas of expertise, it is likely that Trump is seeing something others are not.
Preemptive strikes are an option to consider if waiting will just result in relative weakening.
Could Trump be looking to use an economic preemptive strike in order to prevent the need for future military conflict?
Thoughts?
For the record, I export, distribute, and sell US manufactured goods, while just a rounding error in the greater scheme of things, it adds up to well into 9 figures worth over the last 15+ years.
I'm concerned.
Not about genuine fair trade, because I strongly oppose and lopsided trade deals even if they fell in my favour.
Fair trade is sustainable trade.
But the rhetoric around ripping up existing deals and replacing them with a 30 day take it or leave it unilateral contract is hopefully just vote pandering.
President Trump has a history of renegotiating with his subbies on previous building projects and nailing the little guy.
Even if that has been just mostly theatrics, it can be telling.
I hope it's just talking tough but actually fair.
I find that practice abhorrent unless circumstances truly and sincerely warrant it, and not from a winner takes all Game of Thrones mindset.
Personally, I'm hoping his administration considers something along the lines of Warren Buffet's import/export trade certificates concept.
Scimitar
01-30-2017, 14:35
A few variables
The Bretton Woods / NATO system has run its course.
Only something like 7% of the US GDP is tied up in the international system.
This combined with transportation costs soon becoming a serious line item, both in relative cost and from a stability / security point of view, we can no longer build an Iphone over 300 odd different manufcturing sites.
Plus the US is producing energy at well below market rate right now, and will do so for some time.
Manufacturing will have to again become localised, Toyota is already doing this.
The market was going to force manufacturing back to the US anyway.
So, the question I'm asking is why is Trump spending political capital on an inevatable outcome?
I suspect there's some master chess at play here.
A thought, controling the process allows one to leverage it as a bargining tool. Versus just letting it happen.
THe old adage, if you're not controlling it, someone else is.
S
A few variables
The Bretton Woods / NATO system has run its course.
Only something like 7% of the US GDP is tied up in the international system.
This combined with transportation costs soon becoming a serious line item, both in relative cost and from a stability / security point of view, we can no longer build an Iphone over 300 odd different manufcturing sites.
Plus the US is producing energy at well below market rate right now, and will do so for some time.
Manufacturing will have to again become localised, Toyota is already doing this.
The market was going to force manufacturing back to the US anyway.
So, the question I'm asking is why is Trump spending political capital on an inevatable outcome?
I suspect there's some master chess at play here.
A thought, controling the process allows one to leverage it as a bargining tool. Versus just letting it happen.
THe old adage, if you're not controlling it, someone else is.
S
Just a suggestion. The Freakonomics podcast has a good podcast on US/China trade.
The example of Toyota is a bit of an anomaly. Their Lean methodology is fundamentally based on a binary supply chain where local supply chain reduces the continuous improvement "flash to bang".
Toyota is effectively a resilient ecosystem of 1st, 2nd, 3rd tier suppliers.
It doesn't get built overnight.
Speaking of both markets and control, any thoughts on Warren Buffett's idea of tradeable import/export certificates to balance trade by rewarding exporters with a frictional cost on importers?
I'm not a fan of Buffett's politics, nor his fake wolf in grand-dad's clothes routine....but I find his idea potentially beneficial to a more fair and balanced trading system.
Trapper John
01-31-2017, 08:09
A couple thoughts:
1. We just elected John Galt POTUS.
2. Individual countries need trade with the US more than we need them.
3. Economic policy, Foreign policy, and Military policy are intimately inter-related.
4. The Golden Rule applies (He who has the gold makes the rules).
It is an effective strategy to negotiate individual country trade deals (divide and conquer).
The globalists (progressive liberals) are afraid (shitting their britches) that Donald Trump (John Galt) and his brand of Populism will succeed. That is the single greatest threat to their power. IMO, they are exactly correct in that assessment.
The globalists will stop at nothing to prevent that success. We are witnessing just the beginning of that resistance.
Streck-Fu
01-31-2017, 08:13
Only something like 7% of the US GDP is tied up in the international system.
What is the percentage of GDP when government spending is removed from the GDP? Since the government doesn't actually make anything to sell.
Meaning, what is the percentage of private sector production involved in the international system?
A couple thoughts:
1. We just elected John Galt POTUS.
2. Individual countries need trade with the US more than we need them.
3. Economic policy, Foreign policy, and Military policy are intimately inter-related.
4. The Golden Rule applies (He who has the gold makes the rules).
It is an effective strategy to negotiate individual country trade deals (divide and conquer).
The globalists (progressive liberals) are afraid (shitting their britches) that Donald Trump (John Galt) and his brand of Populism will succeed. That is the single greatest threat to their power. IMO, they are exactly correct in that assessment.
The globalists will stop at nothing to prevent that success. We are witnessing just the beginning of that resistance.
I would agree completely with #3+#4.
I would call the jury still out on #1 as I'm awaiting more evidence, but President Trump is certainly getting off to a very disruptive start.
Are you absolutely sure about #2?
For example, the US is ranked 4th by trading volume for NZ and represents just 25% of the aggregate volume of #1-3(Aussie, China, EU).
For Australia, the US is ranked #3 after China and Japan.
For Japan, the US is ranked #2
For China, the US is ranked #2.
Just as the US has wisely been diversifying away from reliance on Saudi energy, the global economy has clearly begun to shift away from a post WWII and post Cold War US centric trade.
Outside the US, things have changed enormously since the point I would argue as the apogee of US global full spectrum unipolar dominance in 2000.
I'm no fan of progressives and globalists(new communism). I'm a fan of freedom.
But I'm also no fan of unilateral fortress America.
Striking mutually beneficial(shared value) deals is key in my opinion.
If deals offered are too harsh, it genuinely risks pushing countries into alignment with opposing and growing powers like China(despite the hard downsides to that only obvious to some).
I'm confident that competitive forces will compel the US to offer competitive and fair deals.
GratefulCitizen
01-31-2017, 16:02
Striking mutually beneficial(shared value) deals is key in my opinion.
Nations with a British common law tradition make natural trading partners.
Large treaties involving multiple nations is antithetical to this.
There is a problem with broad trade agreements that is even more acute:
we're not on a level playing field.
Walk onto the manufacturing floor of any major American company. Well, walk
if you can, because there will probably be yellow tape lines where you may and
may not walk. And red lines for the fire escape routes (with fire extinguishers
also marked with reflective signs, bearing tags of frequent inspections); you will
note the restrooms all have handicapped accessible stalls, along with the handicapped
parking spaces in the employee parking lot. There will be eyewash stations, deluge
showers, first aid kits, AED's and maybe even a nurse on duty.
Walk into the office and there will be file cabinets full of checklists, OSHA reports,
audits, and worker's compensation forms, signs and notices.
The personnel office (human resources) office will have employee(s) to count
the race, gender, gender identity, ethic origin, etc. of all employees and prepare
statistics for reports.
Access roads will be lined, with lights and guardrails. Inside the factory hoists and
elevators will be marked, calibrated, tested and have lockouts and safety interlocks.
Not one of those items, or a hundred of a thousand others required by US laws
and regulations, make the product stronger, faster, more fuel efficient.
But they all cost money, a lot of money, that must be added to the cost of a
product they do not improve.
Now go to a Chinese factory. You will see none of that.
Take a look: https://www.youtube.com/watch?v=ZWXFhdeOjMY
No American factory could get away with those manufacture practices.
Same for many third world nations (Viet Nam, Philippines, Mexico).
Yet under the NAFTA and TPP we are expected to allow those countries to import to
the United States with no tariffs or duties.
Even factories will little more than sewing machines and a stack of cloth can beat
the US every time because they have no social security, Medicare, OSHA, workers,
compensation, EEOC, ADA, etc. etc.
I'm all for equal trade, but under equal requirements.
The United States is second to none for efficiency, productivity, and especially
quality. But we will always be in second place to any seller who is unhindered
by indirect and nonproductive restraints imposed by our government.
(By the way, that's a very impressive video of third world engineering).
Badger52
01-31-2017, 17:32
we're not on a level playing field.
This. Whole post.
And I would add the madness is increased in other nations who've followed the US model of regulatory over-compliance against potential acts of pure stupidity (when using the product) if a US mfr wants to export it.
Trapper John
01-31-2017, 18:41
There is a problem with broad trade agreements that is even more acute:
we're not on a level playing field..................
The United States is second to none for efficiency, productivity, and especially
quality. But we will always be in second place to any seller who is unhindered
by indirect and nonproductive restraints imposed by our government.
:lifter And that is exactly the reason to negotiate bilateral trade deals.:lifter
Great post!
Trapper John
01-31-2017, 18:57
Flagg: Are you absolutely sure about #2?
Yep! Pretty high ranking for those countries you listed.
As to your point of US-centric global trade, that is the current situation, we're just giving too much away for the sake of advancing globalism and to the detriment of our economy and especially American workers.
To CSB's point, IMO we have been convinced that American workers are lazy, over-paid, and incompetent. Nothing could be further from the truth and I think the global stage is about to find that out and the American worker is going to rediscover his worth.
Nations with a British common law tradition make natural trading partners.
Large treaties involving multiple nations is antithetical to this.
I was an opponent to TPP, largely due to the corrupt lobbying particulars embedded in it.
For example, NZ would have been required to bust up its national pharmaceutical purchasing agency requiring more numerous/smaller district health board to purchase in smaller quantities, but the same aggregate total.
The result would have have same volume, higher prices pushed onto us to improve pharmaceutical company bottom lines for no additional value added.
BUT I do agree in principal with groups of countries(multilateral) that agree to abide by simple common trading practices for mutual and fair benefit. As long as it's simple, fair, beneficial. Focus on the simple/easy stuff as a good foundation, then do the hard(er) stuff later....or never if it doesn't make sense.
The lack of TPP(or should I say a TPP worth having) will result in China attempting to pick off countries one by one, and the US hopefully doing the same in a fair/lasting way.
I think bilateral/multilateral trade agreements could become the new SEATO/NATO/ANZUS/Warsaw Pact.
So it's a shame TPP was such a steaming pile of corrupt special interest rubbish.
Flagg:
Yep! Pretty high ranking for those countries you listed.
As to your point of US-centric global trade, that is the current situation, we're just giving too much away for the sake of advancing globalism and to the detriment of our economy and especially American workers.
To CSB's point, IMO we have been convinced that American workers are lazy, over-paid, and incompetent. Nothing could be further from the truth and I think the global stage is about to find that out and the American worker is going to rediscover his worth.
I reckon the US declining from the #1 position for an increasing number of countries in terms of bilateral trade partners will compel the US strike fair deals(which tend to last far longer than one sided deals anyway).
That combined with the economic rise of China and a return to a multi-polar world.
Unipolar/monopolistic networks are less creative and innovative. Competition sparks it.
Charity begins at home, and long term healthy and sustainable relationships are based on a sense of fairness and mutual gained value.
I don't think for a second US workers are lazy, over paid, or incompetent.
If anything, I think too many US workers are too poorly compensated largely because they are employed in jobs that create too little value to improve their wages(McJobs living wage movement for example).
US workers certainly work hard. They receive far less in terms of work holiday time off than I think every one of their peers/near peers internationally.
US workers being second to none in efficiency, productivity, and quality is pretty bold.
An effective argument could be made to show that there could be a tiny bit of hubris there:
http://reports.weforum.org/global-competitiveness-report-2015-2016/the-global-competitiveness-index-2015-2016/
That stuff is important. But I reckon innovation creation/execution is important(er).
And that's the secret sauce that has allowed the US to take a punch and stay in the fight.
Trapper John
02-01-2017, 06:50
Flagg [QUOTE]An effective argument could be made to show that there could be a tiny bit of hubris there[/QUOTE
Yes there is :D An effective motivator sometimes.
BTW, thanks for the well researched posts.
Flagg [QUOTE]An effective argument could be made to show that there could be a tiny bit of hubris there[/QUOTE
Yes there is :D An effective motivator sometimes.
BTW, thanks for the well researched posts.
No worries!
If you get a chance check out an ex-Air Force fella named Steve Blank who became a really big shot in Silicon Valley: www.steveblank.com
And there's two awesome ex Army fellas working with him:
Joe Felter(ex one of YOU guys )
Peter Newell( ex Rapid Equipping Force)
Collectively, they're running the h4di.org program.
They're all about building an innovation insurgency growing pretty much throughout every domain Defense, diplomacy, government, and private sector.
Spending time with those 3 guys a few weeks back right before the Inaugeration I can only describe the vibe of th4 group they got together as what it must have felt like when the US made the decision to go to the moon and everyone rolled up their sleeves.
https://www.youtube.com/watch?v=68NXH4Nmbvk
OK, here is an even better view of zero safety regulation hot forging.
It is incredible how these guys will maneuver so close to red hot steel.
frostfire
02-01-2017, 20:35
Not one of those items, or a hundred of a thousand others required by US laws
and regulations, make the product stronger, faster, more fuel efficient.
But they all cost money, a lot of money, that must be added to the cost of a
product they do not improve..
True, but a PR nightmare (and lawsuit $$$) from negligent workplace safety can negate stock prices, growth, and so on.
FWIW, I used to work as an enforcer of those requirements for the government. Yes, I did leave when I saw we were shooting ourselves in the foot. However, I disagree with productivity at all cost either. The genesis of OSHA stems from such practice.
I am excited if indeed Trump can bring manufacturing back to the US. Heck, I might return to engineering again. However, I think the perception blue collar labor being less than a (useless) bachelors degree should change as well. Lest we will be forced to admit zillion immigrants to fill manufacturing slots
Badger52
02-04-2017, 20:20
With much focus on Pacifica & Oceana, POTUS' Ambassador-select to the EU seems to already hold the view of many. Europress seems to be reluctant to do other than wring hands, but he spent a few interesting minutes with that "evil" RT.
https://www.rt.com/op-edge/376314-trump-ambassador-eu-brussels-malloch/