Posts tagged ‘steel and aluminum’

Trade, Tariffs, and North Korea

I have watched the events with President DFF with mixed emotions. Yes there has been steel dumping and there are barriers to trade in many countries, but as many more experience hands have put it, there are better ways than starting a trade war, which of course “will be easy to win.” I guess on a general outlook, world trade and a world economy is where we are and thinking in terms of us versus them no longer applies. We have to find agreements that are win-win, not win-lose or lose-lose which is what happens in a trade war.

But one of the things that struck me in all of this is the union leaders, and not in a good way. Now I believe in unions to balance the power of large companies so labor gets their fair share of productivity gains. But these guys were really out-of-bounds with their parochial focus on their win, everyone elses loss. While they could list how many had lost their jobs, do they really think they are coming back? If steel and aluminum make a come-back in the U.S. it will be in mechanized plants that don’t require those levels of employees. That is just a fact. Aluminum is energy (electricity) driven so it is always going to migrate where cost of electricity is cheap.

The union leaders did what I hate in any discussion, interrupt and talk over the opponent that were raising these issues. They are one issue people who think we can reinvent the 1970s. For most of the rust belt, this will be a big yawn, just like moves to bring back coal. Other means and methods are making coal both obsolete, and not labor intensive so jobs are not coming back. Certainly we should be negotiating trade agreements that help protect and save jobs in the United States, but it is a balancing act. Using a hatchet will just make things worse. For the rust belt, it is time to negotiate agreements both in the U.S. and with foreign trade partners that create new jobs for the future, not old jobs that will just be mechanized to reduce costs.

Union leaders like to raise the national defense argument, what happens if we let these industries go overseas and then they cut us off.  Who would that be again, because a trade war will hurt even China.  There thinking is really last century and not in the real world or looking forward.  Remember TPP (Trans Pacific Partnership)?  I and many others were against it because it reinforce the status quo of growing economic inequality.  But it was the right idea and we need to just fix it, not junk it.  Trade and tariffs are complicated and we have to do what is best for the world economy (while demanding sustainable and environmentally safe practices) if we want to do what is best for us.  That is lost on President DFF who see everything in winners and losers.

Okay, North Korea.  What to make of Kim’s meeting with the President?  Well, in a perfect world it could be good.  However Kim is a tyrant and a murder.  He has starved his people in nation that could be described as a living hell.  He executed his uncle with an anti-aircraft gun.  So now he wants to negotiate.  And we have win-lose President DFF meeting with him.  Now I think the first thing you do is decide what Kim might give up.  I simply don’t believe he will give up his nukes for a promise of no interference in his country.  His nukes are what keeps him safe from a pre-emptive strike.  I could be wrong.  Maybe his nuke program has hit a loggerhead and he needs cash.  But the testing he has done does not indicate that.  So what is there let to negotiate?  What does he want from us and what is he will to give up?  You think President DFF in gathering experts to determine that?

What you really need to worry about is President DFF’s need for a win as reality, the Mueller investigation, and maybe a Blue Wave is coming in November.  Will he do something incredibly stupid.  Quite likely.  These are very dangerous times and I do not believe Kim wants to be Mr. Nice guy.  I hope I am wrong.  If North Korea would give up their nukes, it would be good for the world.  I just don’t think that is what is happening and I don’t think President DFF is smart enough to be at the table.