To say the G7 meeting yesterday was not a success is to deal in understatement. What the meeting underscored are rifts in the G7, particularly between the US and perhaps Italy, and the other members over the status quo in international trade. President Trump’s position yesterday was that he was willing to sign onto a free trade agreement that involved zero tariffs. He wasn’t willing to sign onto an agreement that disadvantaged sectors of the American economy. Disagreement over the issue, but in particular Trump being gravely offended by Justin Trudeau’s existence, led to Trump refusing to agree to the G7 communique.
This caused John McCain to take umbrage:
To our allies: bipartisan majorities of Americans remain pro-free trade, pro-globalization & supportive of alliances based on 70 years of shared values. Americans stand with you, even if our president doesn’t.
— John McCain (@SenJohnMcCain) June 10, 2018
Today, South Carolina Senator Lindsey Graham was on This Week with aging Clintonista muppet George Stephanopoulos and both the G7 and John McCain’s response to Trump were discussed.
Via The Hill:
“The [Sen.] Bernie Sanders [I-Vt.] element of the Democratic Party doesn’t stand for free trade. Hillary Clinton said she would get out of the Trans-Pacific Partnership if she had become president. There is a movement in our party that Trump’s seized that got him the nomination, and eventually became president of the United States,” Graham continued. “So I’m not so sure a majority of Americans believe that globalization and free trade is in our interests,” he continued.
“I believe that. John McCain believes it, but the reason we’re having these problems here at home, Brexit, Italy, there’s a movement all over to look inward not outward and I think it’s a mistake, but I’m not sure most Americans agree with John McCain and Lindsey Graham.”
I can only speak for myself, but I think that Graham is correct. While Americans support free trade, they don’t necessarily support globalization. The backlash to the H-1B visa program and of outsourcing technical or business support jobs to call centers outside the US is just the tip of the iceberg. And free trade to many Americans doesn’t mean the same thing that many of our elites mean when they use the phrase.
I know tariffs don't work but why does Canada have these tariffs?
57.8% Barely Seed
49% Durum Wheat
18% Table Linen
Why did Canada create "ingredient strategy" tariff in 2015?
To protect those important industries and curb US imports.
— Charles V Payne (@cvpayne) June 7, 2018
Yesterday, Axios had a great article on this very subject and addressed why an issue that people thought had been settled since Al Gore lectured Ross Perot on the Smoot-Hawley Tariff and the NAFTA was ratified by the Senate.
The Axios piece it titled Why Trump lit the fire.
The biggest key to understanding Trump’s dogmatism on trade is that even as he switched political parties and changed his views on issue after issue, his one consistent stance over 40 years is that other countries are “ripping off the United States” in trade deals, as he put it in 1987.
This is the one thing the president really believes, with his protectionist roots going back to the union-friendly environment where his father, Fred, courted Democratic pols.
On the campaign trail, Trump’s messages on trade resonated with millions of American workers who felt cheated by globalization and low-cost competitors like China. They hooked into Trump’s promises to hit back against these countries.
I am in sympathy with a lot of points made by Navarro. Free trade is free trade. It means that if we allow you to export without tariffs, we expect to be allowed to export without tariffs. If we are not allowed to, in the case of Canada, protect our domestic steel and aluminum production, you are not allowed to protect domestic dairy farmers. This is not an economic argument. This is an argument based on mutual respect. I think Trump had it exactly right when he said yesterday that the world has been using us as a piggy bank, or, more accurately the big weak fat kid who gets his lunch money taken away so the school bullies can by cigarettes and condoms.
And there is also a strong element of elitism in the push for globalization and free trade, as currently defined. The people pushing it, like the Chamber of Commerce, are doing it in service of the pursuit of personal wealth, not because it is actually good for America or Americans. The Chamber has been the driving force behind the open borders movement and they are, 99 time out of 100, opposed to enforcing existing immigration laws. Why? Because cheap labor, expendable labor, labor that has no legal standing in US courts, is preferable domestic labor. And what is the impact on our society if we pursue an economic strategy based solely on services? How do we deal with a large portion of the population who will not only be unemployed but will actually be unemployable? And how do we adapt to the hammer blows of globalization and free trade when they are compounded by automation destroying the livelihood of many Americans and, unlike in previous eras, replacing it with nothing.
Graham is right. Navarro is right. The mass of voters, in many countries, are seeing that free trade and globalism really isn’t helping them. In fact, for every cheap TV that is available at WalMart, there is a loss of wages and economic mobility.
Working people aren’t stupid. The know a really bad deal when they see one. And, as Graham pointed out, it isn’t just Trump supporters that see it. Progressives see it. Mainstream Democrats see it. And here and in Europe, people are voting accordingly.
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