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Negotiating, Away!

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Wall Street is cheering as trade talks with China progress. A full-on trade war may be averted. Is this reason to celebrate?

While it’s always good to avoid any kind of war, there is still reason to be concerned. Two very different nations with different economies still have to come to some kind of terms over the long haul. More to the point, it’s not about the differences in the economies but different approaches to very basic aspects of being a nation-state, including law.

Leaders sitting down and working out a deal seems like a good thing. But as always, the nature of the deal itself is very important.

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Trade Deficits – Bad?

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The nearly permanent US trade deficit is getting a lot of attention. Surely, it’s a bad thing to send so much money outside the US when it could be providing jobs to American workers, yes? The problem largely goes without saying, and is never actually discussed.

But are trade deficits really that bad? As with most things in economics, the short answer is no but the long answer is yes. Let’s discuss.

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Cooperation, Not Combat

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The trade war with China accelerates as the Trump administration’s latest tariffs have been matched. Talks have broken down, and Trump seems to think that the taxes are paid by China, not US consumers. He’s not going to back down anytime soon.

Where does it stop? If the end goal is an even trade between the two nations, it’s not actually possible to accomplish it this way – unless it drops to zero. There are systemic problems in world trade generally and China specifically which create this issue that can and must be worked out. A competent administration would do that hard work and create a world that is much more even all around.

But no, we’d all rather just bully our way to prosperity or something.

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“Winning” A Trade War?

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When things become chaotic, the need for original sources on the ground becomes even more important. Without direct accounts of what’s happening everything comes down to some kind of spin applied at a distance. Writers don’t always deliberately set out to misinform, but a world changing constantly is a world where information at a distance is probably outdated at best.

The problem with original sources is that they can be very hard to understand. Leaving aside other languages and pretending that google translate can handle that adequately, everyone has a different perspective. Every culture has its idioms and biases. Some things simply do not translate well.

Here is just one example of a “nearly original” source and how to read it.

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Destruction, Creative or ???

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In the area of foreign policy, is Trump just plain crazy, or crazy like a fox? Is this random flailing bent on isolating America, or is it creative destruction which tears up the old deal before dictating a new one?

Everyone in America has their opinion now. But so, too, do the leaders of foreign nations who have to deal with it. Europe seems to think that Trump is an idiot for smashing the old alliances, and that’s understandable. China, on the other hand, is much more wary that they are dealing with a more serious and permanent change.

There are very good reasons for this.

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