Nobody knew international trade could be so complicated

[Econoline]

Yeah, it's from Paul Krugman...but I'll bet that even Lord Jim would agree that Krugman knows more about basic economics and international trade than does "President" Trump...

• Is anything ever going to happen on trade, Trump’s signature issue other than immigration? As Matt Yglesias notes, so far almost nothing has. Bloomberg tells us that companies are back to the usual business of moving jobs to Mexico, after a brief hiatus — unclear whether there was any real pause, or just a pause in announcements, but in any case CEOs seem to have decided that NAFTA isn’t under much threat.
  
  True, Trump is tweeting threats about the China trade, and maybe something big will happen after Mar-a-Lago. But that gets us to the question, is Trump actually in a position to pursue the trade issue in any serious way?
  
  My answer is probably not — except as a move taken out of political desperation.
  
  The starting point for any such discussion has to be the observation that during the campaign, when Trump talked trade, he had no idea what he was talking about — no more than he did on health care, or taxes, or coal, or …. Specifically, Trump seemed to have two false ideas in mind:
  
  1. Existing trade agreements are obviously and bigly unfair to the United States, putting us at a disadvantage.
  
  2. Restricting trade would be good for America and bad for foreigners, so the threat of protectionism gives us lots of leverage.
  
  Now, reality: if you look for the obvious giveaways in NAFTA, which the US can demand be redressed, you won’t find them. NAFTA brought down most trade barriers between us and Mexico; there wasn’t any marked asymmetry. In fact, since Mexican tariffs were higher to start with, in effect Mexico made more concessions than we did (although we were giving access to a bigger market.) China is a bit more complicated — arguably the Chinese effectively evade some WTO rules. But even there it’s not obvious what you would demand from a new agreement.
  
  Oh, and China currency manipulation was an issue 5 years ago — but isn’t now.
  
  What about the effects of protectionism? Leave aside Econ 101 gains from trade, and let’s just talk about business interests. The fact is that modern international trade creates interdependence in a way that old-fashioned trade didn’t; stuff you export is often produced with a lot of imported components, stuff you import often indirectly includes a lot of your own exports. Here’s the domestic share of value added in transport equipment:
  When we buy autos from Mexico, only about half the value added is Mexican, with most of the rest coming from the US — so if you restrict those imports, a lot of U.S. production workers will be hurt. If we restrict imports of components from Mexico, we’re going to raise the costs of U.S. producers who export to other markets; again, a lot of U.S. jobs will be hit. So even if you completely ignore the effects on consumers, protectionist policies would produce many losers in the U.S. industrial sector.
  
  And Trump can’t ignore consumer interests, either; if nothing else, Walmart employs 1.5 million people in America, i.e., 30 times the total number of US coal miners.
  
  So any attempt on Trump’s part to get real about trade will run into fierce opposition, not from the kind of people his supporters love to hate, but from major business interests. Is he really ready for that?
  
  So far, at least, the Trump trade agenda, such as it is, has involved tweeting at companies, telling them to keep jobs here, then claiming credit for any seemingly job-creating actions they take. And that got him a couple of favorable news cycles. In practice, however, it means little or nothing. And even tweet-and-photo-op policy seems to be fading out: companies that might have wanted to help Trump puff himself up a couple of months ago are likely to be a lot less accommodating to Mr. Can’t-Pass-A-Health-Billl, with his 36 percent approval rating.
  
  All of this suggests that on trade, as on everything else substantive, Trumpism is going to be all huffing and puffing with very little to show for it. But there is one observation that gives me pause — namely, Trump’s growing need to find some way to change the subject away from his administration’s death spiral. Domestic policy is stalled; the Russia story is getting closer by the day; even Republicans are starting to lose their fear of standing up to the man they not-so-secretly despise. What’s he going to do?
  
  Well, the classic answer of collapsing juntas is the Malvinas solution: rally the nation by creating a foreign confrontation of some kind. Usually this involves a shooting war; but maybe a trade war would serve the same purpose.
  
  In other words, never mind economic nationalism and all that. If Trump does do something drastic on trade, it won’t be driven by his economic theories, it will be driven by his plunging approval rating.

[Gob]

Oh god, you're going to give rubato an erection.

[Lord Jim]

but I'll bet that even Lord Jim would agree that Krugman knows more about basic economics and international trade than does "President" Trump...

So does Lulu...

And she's the dumbest of our three Chihuahuas...

[Econoline]

Oh god, you're going to give rubato an erection.

Just remember: Krugman won a Nobel Prize without any help from rubato, and couldn't care less what rubato thinks of him.




ETA: Seriously, Jim...give it a read. I have a feeling you'll probably (mostly) agree with this one.

[Lord Jim]

All of this suggests that on trade, as on everything else substantive, Trumpism is going to be all huffing and puffing with very little to show for it.

Wow, it takes a real econ brainiac to predict that one...

Who would ever have guessed?

[Joe Guy]

Not really on topic but after reading Econo's introduction, I decided that from now on I shall call that guy occupying the Oval Office, "Resident Trump".

[RayThom]

Or, as Jimmy Kimmel calls Lord Dampnut, "The Celebrity Appresident."


Edited: It's Kimmel, not Colbert.

[rubato]

The fact is that with respect to international trade agreements economists across the political spectrum agree with Krugman ( and Thoma and DeLong &c). Only very very stupid and ignorant people think that trade has caused all the woes of the world. It has not.

This has been a settled question ever since the law of comparative advantage of David Ricardo.


yrs,
rubato

[Burning Petard]

Not ALL the woes in the world. But our president (at least during the campaign) was worried about the TERRRRRIble trade deals we have with Mexico, China and Germany. I am sure the president was informed by Ms Merkel, that we have no deals with Germany; it is with the EU. And the president possibly knows now that NAFTA includes Canada (but that is only a possibility) About China, he is probably still trying to work out new deals for his own brand.

snailgate

[Lord Jim]

Yeah, it's from Paul Krugman...but I'll bet that even Lord Jim would agree that Krugman knows more about basic economics and international trade than does "President" Trump...

I started a thread about this several months ago...

With an OP piece written by George F. Will; far better written and researched then this superficial drivel written by Krugman:

viewtopic.php?f=3&t=16889&p=223111&hili ... de#p223111

The Hack Krugman is not fit to wipe George Will's...

uhh, glasses...

Krugman won a Nobel Prize

Yeah, well so did Jimmy Carter, Mohamed El Magooadai, and Al Gore...

Sometimes a nobel prize ain't what it used to be...

[Burning Petard]

Last week sometime Stephen Colbert riffed on the announcement that the president's daughter was now an official federal employee and the press release on this said she was to be the president's eyes and ears. Wonderful, said Colbert--now he just needs to find someone to be his brain.

Today in the NY Times someone seriously makes that suggestion:

https://www.nytimes.com/2017/04/01/opin ... egion&_r=0

snailgate