Labor folks: Do we really want to get on this bandwagon?

Coalition for a Prosperous America

CPA -- a pro Trump protectionist biz coalition -- with significant labor participation from the Industrial Union Dept and the Teamsters.  

If you stick with protectionism as labor's primary trade policy, half yr base falls into Trump's pocket -- and the pockets of labor's hangmen.

For Immediate Release
March 22, 2018
Click here to view online

CPA Praises President Trump's Efforts to Tackle China's Economic Aggression

Washington. The Coalition for a Prosperous America (CPA) strongly supports President Trump's announcement of new efforts to defend the US economy against economic aggression from China. Specifically, President Trump will take three key steps that CPA views as crucial toward revitalizing America's industrial strength: Impose tariffs on $50 billion of Chinese products manufactured through stolen technology and intellectual property theft; restrict the purchase of US firms and technology by government-owned Chinese companies; pursue a World Trade Organization (WTO) case against Beijing's use of forced technology transfer on US companies.

CPA Chair Dan DiMicco said, "It's extremely encouraging for America's domestic manufacturers that President Trump, along with Peter Navarro, Robert Lighthizer, and Wilbur Ross, are willing to stand up to such brazen bullying. Chinese companies have shamelessly hacked key US technologies and stolen proprietary US technology for nuclear power generators, solar cells, Internet software, and Internet hardware. It's unacceptable that these products subsequently enter the US market and disadvantage scrupulous American companies and their workers who play by the rules."

Michael Stumo, CEO of the CPA, said, "Beijing has committed the largest theft in world history through its systematic technology transfer strategy. Over $350 billion per year is lost to forced technology transfer. A substantial portion of the technology underpinning China's government-owned companies was forcibly taken from US firms. This is economic aggression, and it must be confronted in order to preserve America's cutting-edge industries and future jobs."

Past administrations have attempted years of economic dialogue with China to resolve issues of trade cheating, forced technology transfer, and intellectual property theft. But Chinese firms continue to hack America's leading companies and steal proprietary technology. Beijing has also demanded that US firms manufacture in China, and required the transfer of key technologies at coercively low prices, in exchange for short-term market access. 

In 2017, China racked up a record $375 billion trade surplus with the United States. Stumo explains that the Trump Administration's action on tariffs, investment, and trade enforcement is critical to defending against China's ongoing aggression. 

"This a bold but necessary first step," said Stumo. "China has been caught with their hand in the cookie jar many times, and the president is saying 'Enough is enough.' Beijing will inevitably try to deflect criticism by responding with trade actions. But the US holds a clear advantage since our consumer market is the key driver of China's growth. The administration will likely evolve its response to limit undue retaliatory harm. But Beijing has left us with little recourse after twenty-odd years of brutish behavior."

Stumo adds that the use of tariffs should be recognized as a longstanding method to enforce global trade rules. 

"Tariffs are a necessary resort in this case," said Stumo. "They should be combined with a concerted industrial strategy and management of the dollar exchange rate to make American goods more competitive both at home and overseas. As President Trump responds to evolving retaliation threats, our farmers and ranchers should be protected from retaliation with the full force of the US government."

CPA has long been concerned by China's purchase of critical American technologies. Stumo says that Beijing has perfected the art of "weaponized investment," with China's government-supported companies systematically acquiring US firms and technology. Beijing also imposes coercive licensing requirements on US companies. The result is an ongoing erosion of America's competitive standing in advanced technologies.

Said DiMicco, "Many US firms are required to sign licensing agreements with Chinese companies at low prices as a condition of selling there. It's a devil's bargain, and it means the US surrendering long-term technological viability for short-term market access. But it's not a recipe for our economic survival."

CPA believes President Trump's actions are long overdue, noting the loss of millions of good-paying manufacturing jobs over the past two decades. CPA and its members stand ready to support the administration as it embarks on such a critical course for the US economy.

Added DiMicco, "This is about the future of our country. President Trump is right to act now against China's wanton attacks. We have to do this if we want to preserve a strong economy for our children."

Paola Masman
http://www.prosperousamerica.org/

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John Case
Harpers Ferry, WV

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Recovery Radio:INdications -- Recovery Radio reviews the INDICATIONS of Addiction

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Blog: Recovery Radio
Post: INdications -- Recovery Radio reviews the INDICATIONS of Addiction
Link: http://recovery.enlightenradio.org/2018/03/indications-recovery-radio-reviews.html

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Recovery Radio:INdications -- Recovery Radio reviews the INDICATIONS of Addiction

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Post: INdications -- Recovery Radio reviews the INDICATIONS of Addiction
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Should-Read : A very nice paper indeed: J. Vernon Henderson, Adam Storeygard, Tim L. Squires, and David N. Weil : The G... [feedly]

Should-Read : A very nice paper indeed: J. Vernon Henderson, Adam Storeygard, Tim L. Squires, and David N. Weil : The G...
http://www.bradford-delong.com/2018/03/david-weil-agricultural-trade-and-base-covariates-the-base-covariates-are-malaria-and-ruggedness-our-agricultural.html

Should-Read: A very nice paper indeed: J. Vernon Henderson, Adam Storeygard, Tim L. Squires, and David N. Weil: The Global Spatial Distribution of Economic Activity: Nature, History, and the Role of Trade: "We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average area 560 square kilometers...

...Nearly half of the variation can be explained by a parsimonious set of physical geography attributes.... Geographic characteristics... two groups... agriculture... trade.... Agriculture variables have relatively more explanatory power in countries that developed early and the trade variables have relatively more in countries that developed late.... Two technological shocks occur, one increasing agricultural productivity and the other decreasing transportation costs.... Agglomeration economies lead to persistence in urban locations. In countries that developed early, structural transformation due to rising agricultural productivity began at a time when transport costs were still relatively high.... When transport costs fell, these local agglomerations persisted. In late developing countries, transport costs fell well before structural transformation... [so] manufacturing agglomerated in relatively few, often coastal, locations....

The base covariates are... malaria and ruggedness.... Our agricultural covariates... temperature, precipitation, length of growing period, land suitability for agriculture, elevation, and latitude... 14 biome indicators.... Five trade variables... distances... to the nearest coast, navigable river, major lake, and natural harbor...

 -- via my feedly newsfeed

Trump’s tariffs: The dangerous pull of the status quo in trade debates [feedly]

Trump's tariffs: The dangerous pull of the status quo in trade debates

http://jaredbernsteinblog.com/trumps-tariffs-the-dangerous-pull-of-the-status-quo-in-trade-debates/

By Jared Bernstein March 19 at 6:00 AM 

Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of 'The Reconnection Agenda: Reuniting Growth and Prosperity'.

President Trump's tariffs are upsetting on at least three levels.

First, although exemptions will dampen their negative effect, they are bad policy. Second, they are a frightening reminder that any human barriers between Trump's instincts and economic policy is weakening. Third, the establishment's reaction to them is a reminder that too many powerful people remain mired in the status quo that helped get us into this mess.

On the policy, the simple reality is that because there are so many more jobs in which steel and aluminum are inputs rather than outputs, the tariffs could end up hurting more workers than they will help. Also, retaliation.

On the absence of insulation from Trump's worst ideas and prejudices, congressional Republicans revealed, early on, their unwillingness to buck their leader, regardless of whether he was implicitly endorsing violent white supremacy, fiscal falsehoods or scattershot tariffs. If anything, their cowardice only appears to be growing.

But it is the third aspect on which I'd like to focus today: the ongoing status quo bias, particularly regarding trade policy. This denial not only helped deliver Trump unto us in the first place. Now, the tariff debate reveals that the D.C. punditry still resist updating their long-held denial of the downsides of globalization. In so doing, they ironically exacerbate the risk to globalization's future.

Trade and globalization often pose a riddle to outsiders who observe this debate: Elites love it, but for everyone else — well, it's complicated.

Simply put, most working-class Americans like trade's price effects and dislike its wage effects. They like everyday low prices — but everyday low wages, not so much. To be clear, trade is but one among many forces putting downward pressure on the wages of those in certain sectors (which then spills over to other sectors), but most elites heavily discount the negatives.

To be clear, like most economists, I believe those benefits in the aggregate outweigh the costs. But that is where much nuance is warranted.

The main reason for the benefits of trade is that when countries specialize in producing the things they do best, they can enrich themselves and their trading partners. This result ("comparative advantage") holds even if country A is more efficient than country B at producing both steel and corn. If, relative to us, Mexico has to give up more corn to produce more steel, we will both end up better off if we sell them corn and they sell us steel.

That is broadly true and the source of much global growth. But it does not for a moment speak to the question of winners and losers. Another widely accepted trade theory — the Stolper-Samuelson model — predicts unequivocally, and common sensibly, that the workers in sectors that complete with imports will face lower earnings.

As trade economist Dani Rodrik recently wrote (his italics), Stolper-Samuelson "predicts that low-skilled workers are unambiguously worse off as a result of trade liberalization." Rodrik stresses that this result — that increased trade creates losers — is not a special case of this particular model. "It is the implication of a very large variety of models … redistribution is the flip side of the gains from trade. No pain, no gain. This is standard economic fare — familiar to all trade economists … even if not voiced too loudly in the public."

Instead, those in power justify their denial by maintaining beliefs like these:

"Since we're almost always at full employment, anyone displaced by trade will soon get another great job." First, we've been at full employment only about 30 percent of the time since 1980. Second, a non-college-educated worker displaced from a high-value-added, union job is very likely to end up worse off.
"Since trade generates net gains, the winners will compensate the losers and still come out ahead." Except for not only do the winners fail to do so, they use their winnings to buy the politicians and policies to further protect and enhance their winnings.
Ignoring "place effects," in that those hurt by globalization are often geographically concentrated. As we've seen, this one has, um, some challenging political implications.
Downplaying the way some of our trading partners have managed their exchange rates in ways that boost our trade deficit and destabilize our financial markets.

If these effects were in play, we'd see real wage stagnation for non-college-educated workers; decline in labor's share of national income; declining unionization; longer and more robust supply chains; lower and more stable inflation; more international capital flows; more financial bubbles; and larger trade deficits.

Of course, we've seen all of that — though again, unbalanced trade is but one factor. For example, union coverage was declining before trade took off.

Usefully, the wrong assumptions ticked off above show the way forward. On behalf of all workers, not just those displaced by trade, we must press for full employment to create upward pressure on wages. Winners must compensate losers (we have a Trade Adjustment Assistance program, but it reaches too few workers, and its benefits are paltry), which implies the need to quickly repeal and replace Trump's efforts at upward redistribution through the tax code. We must target left-behind places with direct job-creation programs; we must write trade deals that enforce disciplines against trading partners seeking unfair advantage through currency management (Dean Baker and I had more to say about this agenda recently on this page).

But before we can do all that, and before it's too late, on behalf of at least globalization, if not democracy itself, we must shake off the status quo bias.

 -- via my feedly newsfeed

The Real Reason for Trump’s Steel and Aluminum Tariffs [feedly]

Feldstein on the tariffs

The Real Reason for Trump's Steel and Aluminum Tariffs
https://www.project-syndicate.org/commentary/trump-steel-tariffs-targeting-china-by-martin-feldstein-2018-03

The Trump administration's proposed tariffs on steel and aluminum imports will target China, but not the way most observers believe. For the US, the most important bilateral trade issue has nothing to do with the Chinese authorities' failure to reduce excess steel capacity, as promised, and stop subsidizing exports.

 -- via my feedly newsfeed