Is President Trump really going to set forth an "America First" trade policy, or was it all talk? Please vote. Stay for the links and the haiku.
Four months into the so-not-normal presidency of Donald Trump and the liberal world order is still intact, albeit with the loss of the Trans Pacific Partnership. That deal, which actually might well have corrected many of the complaints of NAFTA critics, would have been killed by Hillary Clinton, too.
In the campaign, Trump said America was getting a raw deal and promised to dump the trade status quo. Among his vows was to build a wall at the Mexican border (and make Mexico pay for it), withdraw from NAFTA or radically renegotiate it, and slap hefty tariffs on China. Little of this has happened yet, aside from a vague notification on wanting to discuss NAFTA with Canada and Mexico.
Indeed, Trump has broken many campaign promises (e.g. that Medicaid and health coverage would be protected). The trade “deal” with China, as Larry Summers remarks below, is a “nothingburger.” But in a White House marked by disdain for competence and under siege by legal problems, who knows what’s next? Washington, as the nation’s most trade-vulnerable state, has major skin in the game.
One more wild card: From antagonizing allies to blurting secrets and denying climate science, Trump is already undermining American leadership in the world. He can leave the existing structures mostly intact and still leave America adrift as China continues its ascendancy.
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What do you think?
This Week’s Links:
• Health care and how markets work | The Baseline Scenario
• Trump’s ‘China deal’ is only a good deal for China | Larry Summers
• Some reflections on Japanese monetary policy | Ben Bernanke
• The return to sprawl is more about supply than demand | Justin Fox
• Trucking and blue-collar woes | Paul Krugman
Today’s Econ Haiku:
More slow GDP
Seems secular stagnation
Dogs the GOP