NDN Blog

Three Things We Need To Do Now To Protect Our Elections In 2020

This essay originally appeared on Medium.

Despite how front and center Russia’s significant campaign to influence the 2016 elections has been in our politics these past few years, little has been done to ensure it doesn’t happen again in 2020. No major bill addressing foreign interference has passed the Congress, the strategy of the United States government remains opaque at best, and of course our President has still not accepted that Russia did intervene last time. This lack of action comes despite the US intelligence community giving repeated warnings about Russia and other nations trying again in the 2020 election; and in recent weeks FBI Director Wray has been loudly raising the alarm about an unprecedented rise in cyber-attacks happening now against American interests. Given how late we are to taking action — the election began three months ago, twenty candidates are actively campaigning for President and voting begins in January — there are three things which the nation’s political leadership should prioritize and make happen in the coming months:

Require Paper Ballots And AuditsFirst and foremost: make sure every state uses unhackable paper ballots and conducts mandatory post-election risk-limited audits of votes (something currently required in Colorado, Rhode Island, and Virginia). Getting this done by the November 2020 elections is going to require swift action, strong leadership from the Administration and Congress, and federal resources. Our current system of leaving election security up to the states, with no minimum mandatory standards, isn’t an adequate response to the reality of the threat today. The simple truth is without paper ballots and audits we have no way of knowing whether our election results have been altered. The lack of leadership from the White House on this fairly straightforward issue has been profound, and dangerous.

Protect Federal Candidates From Cyber Attacks/Hacking And DisinformationWhen it comes to protecting political candidates for federal office from the kind of activity we saw in 2016, the candidates and their political party campaign committees are essentially on their own. The Department of Homeland Security just isn’t yet in this business, and the extraordinary turmoil we are seeing at DHS now will make it far less likely a real program will emerge in the coming months. The cyber protections that federal elected officials receive in their official capacity as Senators and House Members do not extend to their campaigns or private activity, nor does it extend to candidates who are not yet elected. Essentially, it’s up to the candidates and campaigns to protect themselves — even though few politicians are cybersecurity experts — from Russian, Chinese, Iranian and North Korean government hackers and disinformation campaigns.

A series of things must be done here to address these emergent challenges. First Congress should work with DHS to establish a clear and transparent process for information sharing and technical support at the very least with the six federal party committees — the RNC, NRSC, NRCC, DNC, DSCC and DCCC — who can then extend similar services to each of their campaigns. Next each party committee should add a Vice Chair for Cyber Security to oversee these efforts and a Chief Security Officer to ensure the Committee’s access to the technical knowledge required to truly protect our candidates. The strategy for how each Party Committee approaches their responsibilities in these areas should be public, perhaps on their FEC filings; and robust programs with modern tools, fulsome information sharing and extensive training should be funded and executed.

The two offices that provide cyber security for Congress, the Senate Sergeant at Arms and the House Chief Administrative Officer should be given additional authorities and resources, including the ability to help extend protections to the political and private communications of Senators and House Members. Congress should also make counter intelligence and cyber security training mandatory for all principals and staff, and this training should be conducted at least annually as the threats, tactics and tools are always evolving.

Candidates Should Enter Into A Pact To Forgo Use Of Illicit Campaign TacticsOne of the great dangers facing the US in the coming years is that the kind of illicit tactics used by the Russians — hacking, weaponization of stolen information, extensive use of fake accounts and inauthentic amplification — becomes commonly used by domestic actors here in the US against one another. It is vital that responsible leaders of both parties come together and commit to forgoing the use of these kinds of tactics in our democracy.

Many European political parties have signed on to a pledge to forgo these kinds of illicit tactics in their May elections. The Democratic Party State Chairs of the four early primary states — Iowa, New Hampshire, South Carolina and Nevada — have expressed support for the idea of the Democratic Presidential candidates entering into a binding pact with one another committing to forgo the use of a wide range of these tactics. Encouragingly, all of the Democratic candidates up and running in late February agreed to forgo the use of stolen or hacked material in the 2020 elections, a tactic central to how Russia influenced our election last time. It is a good first step but much more must be done.

As an advisor to the Democratic Congressional Campaign Committee in the 2018 elections, I supported both extensive cybersecurity security and countering disinformation operations run by the Committee. We worked with the social media platforms to take down illicit activity, and reported cyber intrusions to the FBI. But at no point did we work cooperatively with anyone else in the federal government. The systems for information sharing, joint learning, training and tool evaluation simply aren’t there yet. We were on our own, as are the campaigns and party committees of both parties this election cycle.

Simply put, we are not ready. The country hasn’t taken the kind of commonsense steps to protect ourselves that we should have taken after Russia’s historic attack on the nation in 2016. The kinds of things I describe above should have happened in 2017 and 2018, and been up and running on January 1st, 2019. They didn’t happen — but they should now. While there are many things which can be done to protect our elections (like the Honest Ads Act and DETER Act, and of course HR1) to me these three steps are the most important and achievable in the coming months. I urge our candidates, elected leaders and the Trump Administration to step up and work together to get them done as soon as possible.

WTO Strikes A Legal Blow Against Trump's Tariffs

On Friday, the WTO issued a series of rulings that struck at the core legal justification for Trump's steel and aluminum tariffs. The administration had argued that countries can impose tariffs based upon their own interpretation of national security interests, and that whether there actually is a legitimate national security concern can't be arbitrated by international trade courts. In a case not directly involving the United States but clearly aimed at Trump's tariff policies, however, the WTO ruled that countries can't simply impose national security-based tariffs for any reason at all, but instead can only impose them when there are unexpected war-related dangers requiring urgent action that involve interactions between sovereign states. This ruling significantly weakens the arguments that Trump had used to justify the tariffs. They have been imposed upon economies including Canada, Mexico, and the European Union, which clearly don't present "unexpected war-related dangers" (and Mattis in 2017 even said the tariffs weren't needed by the US military for any defense-related activities). Furthermore, US steel and aluminum manufacturers have lost business to private foreign companies, and the vast majority of nations affected do not provide state support to their steel and aluminum industries, so Trump's tariffs also don't involve direct interactions between sovereign states.

As NDN has long argued, Trump's tariffs instead represent an extraordinary abuse of Presidential power, and their imposition violates both US and international law. This ruling only reiterates that the tariffs do not serve a legitimate national security interest, and Congress must now act to rescind this latest violation of Presidential authority. You can read more about NDN's work challenging Trump's tariffs here, and find recent Congressional action towards reining in the tariffs here

Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.

NDN Applauds The Progress Made Towards Reining In Trump's Tariff Authority

NDN applauds the progress we've seen this week towards challenging the President's whimsical use of tariffs to achieve his trade objectives. We're pleased that the New Democrat Coalition's Trade Task Force sent a letter on Wednesday urging the President not to impose auto tariffs on our close trading partners, and are also pleased about the more vocal opposition to these tariffs now coming from Republicans as well.

NDN has already endorsed the Bicameral Congressional Trade Authority Act and the Automotive Jobs Act, both of which would put constraints on the President's tariff authority. We continue to believe that the President's frequent and routine invocation of national emergencies as a justification to put tariffs on our closest allies is an extraordinary abuse of President power and should be more forcefully challenged by Congress.

Related Writings: 

Congress Should Warn The President Against Levying Tariffs On Europe - 3/21/19 - The hostility shown by the President and his family towards Europe this week has reinforced the need for Congress to send a clear message to Trump that if he chooses to put tariffs on European goods there will be consequences for his Presidency and his agenda in Congress.

NDN Supports Bicameral Tariff Bill - 2/8/19 - NDN is pleased to endorse and support the Bicameral Congressional Trade Authority Act of 2019, legislation which provides critical Congressional oversight on the President’s ability to use national security as a justification to impose tariffs on our close trading partners.

Trump's Tariffs Are A Growing Threat To The American, And Global, Economies - 11/28/18 - US growth expectations have fallen, manufacturing and agricultural firms now face higher costs and weaker demand, and the trade deficit has surged. With a President unwilling or unable to grasp the risks of a broader trade conflict, it is up to Congress to challenge Trump far more directly on his reckless trade policies.

Iowa, Trump, and the Politics of Globalization/Tariffs - 10/12/18 - Trump’s trade policies are hurting the Iowa economy. His tariffs are unpopular there, and his party is performing badly in the fall elections. Some thoughts on what this means for the Democratic presidential race starting soon. 

Invite: Th, May 16th - NDN's "Patriotism, Optimism"

Over the past year or so Simon has been making a big argument about the past and future of the center-left in America.  Called "Patriotism and Optimism," it makes the case that America is not in decline and is in fact doing as well as it has in any point in its history. It is meant to be an explicit rebuttal to the core argument Trump is making about America and its decline, an argument which is malevolently selling America and its people short every day. 

This primary way this argument has made itself into the world is through a 45 minute long Powerpoint deck, which has been seen in dozens of showings over the web and live in person to policy makers here in Washington and around the country. Our next showing of the deck will be Thursday, May 16th from 12:00pm to 1:15pm at our new offices at 800 Maine Avenue SW, Washington, DC. Lunch will be served. You can RSVP for the event and learn more here. For background before the showing, feel free to check out some related readings below.

Key Background Readings On "Patriotism and Optimism"

The Case for Optimism: Rejecting Trump's Poisonous Pessimism, Simon Rosenberg, Medium, 6/2/17. In an essay that originally was published on Medium, Simon argues that the great rationale of Trump's Presidency  –  that America is in decline – simply isn't true, and must be challenged more forcefully.  This is the piece that spurred the creation of the presentation. 

Chin Up, Democrats, Simon Rosenberg, US News and World Report, 1/20/17. In his column Simon argues that Democrats should have pride in their historic accomplishments and optimism about the future of their politics. This one is very relevant to the presentation itself. 

A Center-Left Agenda for the Trump Era - Simon Rosenberg, US News and World Report, 12/9/16.  In the early days after Trump's election Simon layed out a possible agenda for the Democrats centering on prosperity, security, shoring up the American led liberal order and ambitiious efforts to reform our political system. 

Additional Readings

Some Thoughts On the Caravan - By Simon Rosenberg, Medium, 10/24/18.  The Caravan, composed of 7,000 poor, unarmed, mostly Honduran Central Americans, poses no threat to the US, and illegal border crossings continue to be way down. Some thoughts on what Democrats should do to respond to Trump's farcical attacks and terrible policies.

Are We Better Off Under Trump? The Short Answer Is No - By Simon Rosenberg and Chris Taylor, NDN, 10/18/18.  Most measures of the US economy are worse today than when Trump took office. Worse still, the President’s policies have made it very challenging to manage the next recession or global economic downturn.

Challenging Trump's Tariffs - An Ongoing Series - By Chris Taylor, 10/17/18.  In a new series challenging Trump's tariffs, we argue that the President's trade policy is illegal, recklessly ignorant, damaging to the US economy, and historically unpopular. Congress must step up and rescind them in the coming months. 

Trump's Immigration Strategy Is Failing - By Simon Rosenberg, NBC News, 8/6/18.  Almost nothing the President has done on immigration and the border has worked; expect more extreme policies as the elections approach. 

Congress Must Debate The Weakening of Global Order - By Simon Rosenberg, NBC News, 5/10/18.  Few presidents have inherited a world or a nation in which more was going right. Trump seems determined to undo it all.

The Pernicious Politics of Oil - Simon Rosenberg, US News and World Report, 12/16/16.  Petro-powers are challenging the global order, and the next president seems uninterested in stopping them.

An Enduring Legacy: The Democratic Party and Free and Open Trade - Simon Rosenberg, Huffington Post, 1/24/14.  The global system created by Presidents FDR and Truman has done more to create opportunity, reduce poverty and advance democracy than perhaps any other policies in history. 

Trump Is More Like Maduro Than Any Democrat

This essay originally appeared on Medium.

In recent months, the Republican Party has toyed with a new electoral strategy heading into 2020: accuse Democrats of becoming radical leftists opposed to free markets and democratic institutions, and argue that they want to transform the country into something similar to the Maduro regime in Venezuela. In February, for example, Trump delivered a speech in Miami accusing his political opponents of wanting to impose Venezuelan-style socialism on the United States, while Press Secretary Sarah Sanders in March said that “Democrats are harassing the President to distract from their radical agenda of making America a socialist country.” The strange dynamic of this argument, however, is that the picture it paints of Democrats’ supposed economic unorthodoxy and disdain for the rule of law is far more reminiscent of Trump himself.  More so than any US President in the modern era, Trump has derided the American market-based economic system as robbing Americans and destroying US jobs, all the while trampling on the rule of law and seeking to intimidate his political opponents.

Let’s drill down a bit on the ways Trump is more like Maduro than any Democrat here in the US:

Anti-Market Economic Policies, Picking Winners and Losers - Trump has overseen what has become the most anti-market economic policy of any President in the postwar period. First, his unprecedented attacks on the global trading system have directly weakened the competitiveness of innovative American firms in an attempt to prop up his favored industries. The steel and aluminum tariffs have increased costs to automakers like Ford and GM by over $1 billion, and have led to aggregate job losses of over 400,000 net jobs. And have the tariffs led to the end of unfair trading practices against American steel and aluminum manufacturers? No, because the vast majority of those US imports come from Canada, the EU, and Mexico, all of whom haven’t engaged in dumping or subsidies to their domestic steel and aluminum producers. Trump’s tariff strategy is no different from if he enforced punitive taxes on American automakers and then gave government handouts to the steel and aluminum industries. Indeed, as a result of his tariffs, much of the agricultural industry is now reliant on government subsidies to stay afloat as their export markets have dried up.

Second, in his Miami speech Trump derided the Venezuelan government for its “power to decide who wins and who loses.” And yet Trump consistently interferes in the market and attempts to leverage government power to intimidate firms that he doesn’t like and help companies that he does like. Trump attacked GM’s decision to scale back US production as a result of elevated raw resource costs, and threatened to cut off GM’s access to completely unrelated electric car tax credits that are available to all US automakers. He threatened to unilaterally increase the shipping rates that the US Postal Service charges to Amazon, in an attempt to harm Amazon and Washington Post owner Jeff Bezos. Furthermore, Trump attempted to force electrical grids across the country to buy coal- and nuclear-generated electricity, even if the grids didn’t want to use those sources because they were more expensive. And just last month, he tried to pressure the Tennessee Valley Authority into buying more expensively priced coal-generated electricity from several firms that were owned by friends of the President. Time and again, Trump has refused to allow competitive markets to function, and instead has turned to the socialist strategy of using state power to advantage his allies and harm his enemies.

Third, Trump has overseen the most fiscally irresponsible budget in the modern era, at a time when the strong US economy requires the least fiscal stimulus. Orthodox economics says that debt-financed stimulus should be done during economic downturns and then deficits reduced during subsequent economic booms, so as to maximize the efficiency of borrowed money and reduce the debt burden on future generations. Trump has done the opposite of this. With unemployment under 5%, his tax cut and increased spending have sent deficits surging from 3.1% of GDP in 2016 to a projected 4.2% this year, negating much of the progress that Obama made in reducing it from 9.8% in 2009 to 3.1% in 2016. This level of budget deficit during good economic times is unprecedented in the United States. Indeed, since the end of the Second World War, the three largest budget deficits as a % of GDP while unemployment has been under 6% have been Trump’s deficits in 2017, 2018, and 2019 (projected). Similarly, disregarding fiscal sustainability has been a hallmark of the Maduro regime, which ran budget deficits of 20% of GDP and 15% of GDP in 2015 and 2014 that have played a major role in the country’s current hyperinflation.

Repudiation of Democratic Institutions – The area in which Trump might resemble Maduro the most is in his contempt for the rule of law and democratic checks and balances.  Maduro and his predecessor Hugo Chavez gained absolute power in Venezuela through state take-over of the free press, packing the independent judiciary with their own loyalists, transferring the power of the elected legislature to the executive, and imprisoning their political opponents. If those authoritarian actions sound familiar, it is because they are similar to the steps Trump has tried to take to consolidate his own power (albeit in a system with far greater checks to such abuses). Trump has attempted to delegitimize the free press as the “enemy of the people” in the eyes of Americans, applauded criminal assaults against journalists, threatened to disband specific courts that have made rulings he opposes, threatens almost weekly to lock up his political opponents, and used a blatantly made up national security emergency to bypass the elected Congress to build his border wall. In each of these ways, the actions of the Maduro regime to consolidate power are echoed by Trump in his attempted actions and rhetoric, while it is the Democratic Party that has taken the mantle of defending democratic institutions in the United States.

Furthermore, the President has attacked the independent governmental institutions that help manage the economy when they take actions that Trump doesn’t like. When the Federal Reserve was raising interest rates in a way that Trump thought would hurt his approval rating, he launched the most vocal attacks on the Fed of any President in decades. Meanwhile, Trump’s newest appointee to the Fed, Stephen Moore, is likely the most blatantly political figure appointed to the central bank in recent memory. In December 2018, Moore wrote an op-ed titled simply “Fire the Fed”, and he has consistently called for Fed Chair Jerome Powell to resign. Finally, Trump and his advisors have constantly attacked the Congressional Budget Office for supposedly making up economic data to hurt Trump, even though there is no evidence whatsoever of this activity. Major elements of Maduro’s economic policy in Venezuela have included a takeover of the central bank to dramatically increase monetary stimulus for political gain (leading to hyperinflation) and the packing of the independent statistical agencies with loyalists who doctored data to increase Maduro’s popularity. Here, Maduro seems much closer to Trump than to the Democratic Party.

As the 2020 election approaches, Republican attacks on the Democratic Party and its candidates as socialists and Venezuela-lite will undoubtedly escalate. But for all of their condemnation of anti-market and authoritarian impulses in Venezuela, their man in the White House is the greatest embodiment of such sentiments in modern American history. As is so common with Trump, this new line of attack is simply an attempt at misdirection from the real economic achievements of Democrats and Republicans over the past generation. Contrary to the arguments portraying Democrats as scary socialists, the Democratic economic approach has actually produced far better results than that of Republicans. Since 1989, four times as many jobs have been created annually while Democrats have been in the White House than when Republicans have been. Similarly, median income has on average fallen under Republican Presidents while it has risen under Democrats, and the budget deficit and uninsured rate have on average increased under Republicans while they have declined under Democrats. If Republicans want to find a party that has mismanaged the economy and adopted increasingly authoritarian ideas, they should look in the mirror.

Congress Should Warn The President Against Levying Tariffs On Europe

We are at the point now where Congress should send a clear message to President Trump that if he chooses to put tariffs on European automobiles and other goods in the coming weeks there will be consequences for his Presidency and his agenda in Congress.   Given the struggles Europe is having with Brexit, its upcoming May elections, and a slowing economy, launching tariffs at this particular moment would be rightly interpreted in Europe as an unnecessary and reckless hostile act and do grave and lasting damage to America’s relations with our closest historic allies.  Additionally, as we’ve written elsewhere, the President’s repeated evocation of emergency powers to levy tariffs without the approval of Congress is a dangerous abuse of Presidential power and should no longer be tolerated by leaders in either party. 

Events of the last few days have made this kind of aggressive action by Congress far more urgent.  First, the President’s son, Don Jr, penned an op-ed in a UK newspaper attacking Prime Minister Theresa May for her ineffective management of Brexit during perhaps the most consequential week of this sorry saga.  An extraordinary step, the op-ed demonstrated a willingness by the President’s family, and perhaps his government, to take dramatic action outside of all traditional diplomatic protocol to hasten the breakup of the European Union.  Second, the President has used remarkably hostile language about Europe in recent days, most notably in this exchange with the Irish Prime Minister at the White House last week.   With the Irish Prime Minister sitting next to him, the President said about Europe: “We are going to do something that’s pretty severe economically.  We are going to tariff a lot of their products coming in.” 

The formation of the European Union was one of America’s most successful and important post war projects.  In April, Europe and the United States will be marking NATO’s 70th Anniversary, and in May, Europe will be holding elections for representation in the European Parliament.  This should be a time to be celebrating our historic alliances and partnerships, not attacking them.  And at a broader level, Congress must now, as best it can, not just work to counter or mitigate the damage the President is doing to our nation and its interests, but to prevent it. 

While we believe anything the House and Senate do should be very aggressive, at the very least they should give serious consideration to two bills currently in Congress: the Bicameral Congressional Trade Authority Act of 2019, sponsored by Senators Toomey (R-PA) and Warner (D-VA) in the Senate, and Reps. Kind (D-WI), Panetta (D-CA), Gallagher (R-WI), and LaHood (R-IL) in the House, and the Automotive Jobs Act, sponsored by Reps. Sewell (D-AL) and Upton (R-MI). The Bicameral Congressional Trade Authority Act provides critical Congressional and Department of Defense oversight on the President's Section 232 ability to use national security as a justification to unilaterally impose tariffs, while the Automotive Jobs Act requires the federal government’s International Trade Commission to study the economic impact of auto tariffs before they can be implemented by the President.

With all of the warning bells ringing for the American and global economies, and our alliances with key trading partners, it is time now for Congress to engage and directly challenge the President on his irresponsible tariff policy.

Growing Recession Risks Could Make Trump Even Less Stable

In recent weeks, new challenges have emerged to the conventional wisdom that the US economy is largely doing fine. Growth is projected to significantly decelerate this year, with first quarter growth seen at only 0.4% by the Atlanta Fed and 0.9% by Goldman Sachs. Manufacturing output, a key leading indicator of economic activity, has fallen significantly over the past six months, and four major manufacturing indicators (ISM PMIMarkit PMIPhilly Fed, and Empire State Fed) now show US industrial activity at its lowest level since late 2016. Finally, the most widely trusted recession indicator in the financial markets - the yield curve - is now at its flattest level (indicating its highest recession probability) since 2008, and the NY Fed's recession model shows a 24% chance of recession in the next 12 months, an alarming reading considering that over the past 40 years there has always been a recession within 12 months when the model has reached 28%.

An economic downturn, accompanied by a loss in confidence in the economy among the public, could significantly harm Trump's chances in 2020. While the President continues to have the consistently lowest first term approval rating in the post-World War 2 period, it has been kept above disaster territory by relatively strong approval of his economic management. For example, March's Ipsos poll showed his net approval at -13, but his net economic approval at +6. If such a downturn were to happen, therefore, the bottom could easily fall out on his Presidency, and a serious primary challenge could be undertaken against the President. As a result, as the economy continues to weaken, we'll likely see a more unstable and increasingly erratic Trump, who will try ever harder to please his base with even more reckless policies in an attempt to hide the slowing economy.

Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.

With Growth Slowing, Trump Releases A Budget Devoid From Reality

This morning, the Trump administration released their budget request for 2020 and with it their economic projections for the next decade. Unfortunately, the document reads more like a Trump rally speech than a serious piece of economic literature, and contains projections at odds with virtually every independent analysis. The budget forecasts growth of 3.2% in 2019, even though the Fed, CBO, IMF, and every major bank (Goldman Sachs, JP Morgan, Morgan Stanley, and Bank of America for example) all project that 2019 growth will be 2.5% or less (the average 2019 projection for those seven organizations is just 2.2%). Even more implausible, Trump's budget forecasts that growth will stay at 3% and above through 2023. In reality, the IMF projects that US growth will be closer to 1.4% in 2023, while the CBO forecasts a growth rate of 1.7% in 2023. The administration's fiscal daydream doesn't stop here though. Much of the growth boost in 2018 came from sharply higher budget deficits that boosted aggregate demand (the deficit of 3.9% of GDP in 2018 was the largest deficit when unemployment was under 6% since 1950). Trump's budget, however, sees a budget deficit of 3.7% of GDP by 2023, compared to the CBO's current estimate of 4.6% in that year. What the administration is saying, then, is that they will have double the rate of growth in 2023 compared to CBO projections, while also having less fiscal stimulus than the CBO anticipates (stimulus that would presumably be necessary on an even larger level to achieve anywhere near 3% growth). 

Above all else, today's budget request is a desperate attempt to rewrite the economic narrative of the Trump presidency. Growth is slowing, not rising, and will likely hit its potential rate of 1.8% by 2020. This means that the President's promise that his tax cut would create sustainable long term growth above 3% was a lie. In addition, the budget deficit will continue to grow to unprecedented levels when outside of a recession (and indeed, the deficit for the first four months of FY 2019 is already 77% larger than the first four months of FY 2018). Trump's promise that his tax cut would pay for itself and that he'd balance the budget within his first term in office? Another lie. So far in Trump's presidency, growth has been strong because of a large fiscal stimulus that, while having little effect on long term growth and blowing up the deficit, increased short term growth. Now that the stimulus is wearing off, however, the reality of Trump's poor economic policies is becoming clear, something that could be politically disastrous for him in 2020. 

Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.

Time For Congress To Directly Challenge Trump's Tariffs, Pass Bicameral Bill Reining In His Tariff Authority

Today's extremely poor job growth data reinforces the trend also echoed this week in Europe that we are heading for a sharp deceleration in economic activity and a potential recession.  The Atlanta Fed now sees only 0.5% growth in Q1, while Goldman Sachs projects a growth rate of just 0.9%. On top of that, manufacturing output, a key leading indicator of growth and a major priority for the President, has fallen sharply in recent months and is now at its lowest level since November 2016. 

Much of the blame for this significant deceleration lies at the feet of Trump's reckless trade policy, which has seen new tariffs imposed on over 20% of all US imports. This policy has led to a significant deceleration of global growth, including a near recession in the euro area, as well as a loss of key demand markets for US manufacturers and farmers. All told, the tariffs have led to thousands of US jobs being lost and have contributed to the recent declines in the stock market. 

As a result, removing Trump's tariffs is a key growth imperative for the US economy. This reinforces the need for Congress to more forcefully challenge Trump's trade policy, particularly the illegal national security authority Trump has used to unilaterally impose tariffs. One important way we recommend doing this is the Bicameral Congressional Trade Authority Act of 2019, sponsored by Senators Toomey (R-PA) and Warner (D-VA) in the Senate, and Reps. Kind (D-WI), Panetta (D-CA), Gallagher (R-WI), and LaHood (R-IL) in the House. The legislation provides critical Congressional and Department of Defense oversight on the President's Section 232 ability to use national security as a justification to unilaterally impose tariffs on our close trading partners.

Challenging the President on his trade policy is especially important in light of his new rent-seeking "plan" to charge our NATO and East Asian allies the full cost of US troops deployed in their countries plus an extra 50% premium. This idea is nothing short of extortion of our close allies, and if enacted would shake the transatlantic alliance to its core. If the President also unilaterally imposes auto tariffs on the European Union, a move likely to push the euro area into recession, the transatlantic alliance could witness a very rapid, and potentially fatal, unraveling. These moves can only be seen as intentionally trying to destroy the alliances that have created decades of peace and prosperity around the world. It is our belief, therefore, that directly challenging Trump's ability to impose these tariffs is a critical part of the fight against illiberal authoritarianism both at home and abroad.

With all of the warning bells ringing for the American and global economies, it is time now for Congress to engage and directly challenge the President on his reckless tariff policy.

Related Writings:

Trump's Trade Deal W/China Looks Toothless, 2019 Growth Stagnates - 3/6/19 - The potential trade deal with China looks likely to only increase some purchases of US goods, while doing little to reduce Chinese structural trade abuses. Meanwhile, the trade war has led to a large deceleration in US growth, while stimulus from the tax cut has weakened significantly.

Trump's European Tariffs Would Weaken The US Economy And The Transatlantic Alliance - 2/14/19 - Auto tariffs on the EU would destroy thousands of US manufacturing jobs, raise car prices across the country, and weaken our alliance with our European partners. Congress must act to challenge this looming trade war.

NDN Supports Bicameral Tariff Bill - 2/8/19 - NDN is pleased to endorse and support the Bicameral Congressional Trade Authority Act of 2019, legislation which provides critical Congressional oversight on the President’s ability to use national security as a justification to impose tariffs on our close trading partners.

Trump's Tariffs Are A Growing Threat To The American, And Global, Economies - 11/28/18 - US growth expectations have fallen, manufacturing and agricultural firms now face higher costs and weaker demand, and the trade deficit has surged. With a President unwilling or unable to grasp the risks of a broader trade conflict, it is up to Congress to challenge Trump far more directly on his reckless trade policies.

Iowa, Trump, and the Politics of Globalization/Tariffs - 10/12/18 - Trump’s trade policies are hurting the Iowa economy. His tariffs are unpopular there, and his party is performing badly in the fall elections. Some thoughts on what this means for the Democratic presidential race starting soon. 

Trump's Trade Deal W/China Looks Toothless, 2019 Growth Stagnates

In pursuing his trade war with China, Trump promised American workers and farmers that the tens of billions of dollars lost from reduced export access and higher costs would be made up by a comprehensive deal that dealt with the structural advantages China gave to its own industry. In recent weeks, however, it has become increasingly likely that a potential trade deal with China will not do that, and instead will only involve some increased purchases by the Chinese government. The New York TimesWall Street Journal, and CNBC all report that any language in the deal requiring changes to China's intellectual property or industrial subsidies will likely be too vague to have any real effect, and will have few mechanisms for enforcement. This represents a startling defeat for the President. If Trump only wanted an increase in US exports, he could have simply signed the TPP trade deal on his first day in office, which was projected to increase US exports by over $350 billion annually by 2030 (compared to at most an additional $200 billion in annual exports to China under this deal, although even that would be offset by fewer exports elsewhere due to the resulting appreciation of the US dollar). Instead, he has significantly weakened both the US and global economies for gains that could have been accomplished two years ago. 

Furthermore, while fourth quarter GDP came in above expectations at 2.6% (but still below the White House's "long term projection" of 3%, less than a year after the tax cut), early projections for 2019 growth show a significant reduction in growth. The Atlanta Fed sees only 0.5% growth in the first quarter of 2019, while the New York Fed and Goldman Sachs both project 0.9% growth. These growth downgrades come on the back of new data showing that in February manufacturing activity fell to its lowest level since November 2016. Trump's economic policies are largely responsible for this economic slowdown. His trade policies have led to a significant deceleration of global growth as well as a loss of key demand markets for US manufacturers and farmers, both of which have reduced US exports and production. In addition, his tax cut has now clearly failed to lift business investment as was promised by the administration. Non-defense capital spending today is at a lower level than it was in May 2018, and business investment has grown at an annualized average of 4.4% over the past two quarters, compared to a quarterly annualized average of 6.3% in 2017 before the tax cut was enacted. NDN has written a series challenging Trump's reckless trade policy for its harmful effects on the US and global economies, which you can find here. As well, you can read NDN's work detailing how the overall Trump economy has underperformed the strong Obama economy of 2015-16 here

Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.

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