Monday, 3 July 2017

Trump "Overrules" Cabinet, Prepares To Unleash Global Trade War

While one of Trump's recurring campaign promises was that he would "punish" China and other key US trade counterparties if elected, for taking advantage of free-trade by imposing steep tariffs and duties on foreign imports to "level the playing field", the President's stance changed drastically after the election, U-turning following his amicable meeting with China's president Xi Jinping in March, but mostly as a result of pressure by his ex-Goldman advisors to keep existing trade arrangements in place and not "rock the boat."

Now, all that may be about to fall apart.

According to Axios, behind the constant media scandals, "one of the most consequential and contentious internal debates of his presidency unfolded during a tense meeting Monday in the Roosevelt Room of the White House" where with "more than 20 top officials present, including Trump and Vice President Pence, the president and a small band of America First advisers made it clear they're hell-bent on imposing tariffs — potentially in the 20% range — on steel, and likely other imports."
In other words, Trump - true to his campaign promises - is set to launch a global trade wars after all, one where then main country impacted would be China, however the collateral damage would extend to Canada, Mexico, Japan, Germany and the UK.

And what may be even more striking is that Trump overruled his cabinet, as "the sentiment in the room was 22 against and 3 in favor — but since one of the three is named Donald Trump, it was case closed." Axios adds that while "no decision has been made, the President is leaning towards imposing tariffs, despite opposition from nearly all his Cabinet."

This is being labelled as a trade war but it's the right thing to do. The US outsourced its industrial capacity to China along with the jobs. Trump is trying to reverse what happened.

Each country around the world should be looking to be self sufficient, as much as possible, where you trade for items you don't have or trade for unique luxury items/brands. This is about jobs and having money circulate within local economies. If you take outsourcing/efficiency to an extreme where EVERYTHING is made overseas 'because it is cheaper' then what sort of high value work will people do within their own countries ? (Note that even high tech/high value industry can be outsourced).

[Posted at the SpookyWeather blog, July 3rd, 2017.]

No comments: