An Urban's Rural View

More Trade Thoughts From a "Clown" and "Dufus"

Urban C Lehner
By  Urban C Lehner , Editor Emeritus
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A New Yorker cartoon a few years back showed a deeply depressed blogger lying on a couch next to a bearded psychiatrist. The shrink is saying, "Let's try focusing on your posts that DO receive comments."

As a blogger myself, I empathize with what has driven this man into psychoanalysis. It's every blogger's dread -- the nagging fear, fueled by lack of comments, that nobody cares about what he's posting. The blogger wonders, "Is anybody even reading me?"

That's why, to this blogger at least, even sharply critical comments are better than no comments at all. In a comment on my previous blog post (https://www.dtnpf.com/…), KBenson called me a "clown" and a "dufus." To which I say, "Thank you, KBenson, for caring enough to comment." It's no fun being called names but it beats being ignored.

As the comment was personally abusive, DTN Editor-In-Chief Greg Horstmeier asked me if I wanted it deleted. I said no. I had my say, let readers have theirs. Instead of deleting, Greg wrote his own comment, making the excellent point that disagreements on issues, even strong disagreements, are perfectly appropriate, but personal attacks are problematic.

As best I can tell, KBenson's beef with me is that I am not a fan of "today's realignment of foreign trade policy." It's true. I'm not.

In the post to which he took such exception I wasn't so much objecting to what Trump is trying to accomplish -- the realignment -- as to his scattershot way of going about it. But I also have reservations about the realignment itself, so let me take this opportunity to explain them.

For starters, I don't think it's good for farmers and ranchers. The Trump team's mantra is that they'll be better off in the long run -- short-term pain for long-term gain. Problem is, the pain is real and immediate while the gain is speculative and potentially years off. This trade-policy "realignment" is surrendering to competitors from South America and Australia markets that took Americans decades to conquer. Our competitors having supplanted us, we won't automatically regain our competitive position after new trade terms are agreed. It could take years to rebuild America's strong position in China's soybean market or Japan's beef market, to cite but two examples.

Trump's assumption that he can bring a lot of factories back to the U.S. strikes me as unrealistic. He can bring some, to be sure -- especially automated plants that don't employ a lot of people. For labor-intensive manufacturing, U.S. wages are simply uncompetitive. If we levy such prohibitive tariffs that Chinese-made goods become too dear, the factories are more likely to move from China to Cambodia than to Canton, Ohio.

Trump is right to be focused on China but wrong in thinking the problem China poses is how much it sells to us. The problem is how little China buys from us -- the obstacles it erects to Americans, including American agribusinesses, trying to sell to China and, in particular, its extortion of American technology as a price of doing business there. Imposing 25% tariffs on Chinese goods does nothing to solve the real problems in the U.S.-China trade relationship.

Trump's supporters say the tariffs are just negotiating ploys, aimed at giving him leverage to force concessions. I don't doubt Trump sees them that way. But he's misjudging China's rulers.

Anyone familiar with China's history and culture knows the likelihood of them capitulating to foreign pressure is small. The Chinese people's resentment of their country being humiliated by foreigners is too strong. Bowing to pressure would be political suicide, even for an authoritarian regime. China certainly won't bow quickly. Meanwhile, the impact of these tariffs on farmers and other exporters is very real.

Trump's disdain for multilateralism doesn't get as much attention as his tariffs, but it is in many ways as big a problem. He has pulled out of the Trans-Pacific Partnership, threatened to undo NAFTA and suggested he'd like to exit the World Trade Organization. He envisions a world in which all trade deals are bilateral, thinking that in any bilateral negotiation the U.S. will have more leverage.

But the multilateral trade architecture that previous U.S. presidents going back to Harry Truman labored to build is not only more efficient economically. It's also more conducive to maintaining world peace.

The multilateral agreements that prevailed when Trump became president weren't perfect, to be sure. An American effort to reform some of them would have been welcome. Instead, Trump is whacking away at them, trying to take us back to the more dog-eat-dog era before the world wars.

I would defend to the death KBenson's right to speak out on behalf of this realignment of trade policy. I cannot join him in supporting it.

Urban Lehner can be reached at urbanize@gmail.com

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Comments

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Urban Lehner
10/1/2018 | 2:54 PM CDT
Thanks, Lance. I share your hope. The Communist Party has tried to deflect public unhappiness with economic troubles by playing the nationalism card, which means constant reminders of the humiliations of the past and constant assertions that when the U.S. makes trade demands, it's really just trying to keep China from rising to its rightful place in the world. I share your hope that the recovery will be easier than feared, but it's only a hope.
Lance Woodbury
10/1/2018 | 1:42 PM CDT
Urban, thanks for going in-depth with your thinking. I visited China in April and was struck too by "The Chinese people's resentment of their country being humiliated by foreigners is too strong" and wondered what it might mean for the US as we headed into trade disputes. An easy recovery from markets lost will hopefully be better than I fear...