Trump

Trump’s Tariffs Will Do Lasting Economic Damage If Not Opposed

(This is the third essay in a series challenging Trump’s tariffs)

By: Chris Taylor

Much of Trump’s trade policy has been centered on his idea that trade wars are easy to win and will lead to quick re-negotiations of trade agreements. In his mind, therefore, the use of false justifications to sidestep Congressional oversight and a refusal to engage in real economic analysis would not be a problem, because the tariffs would be quickly and painlessly rescinded once the trade agreements were revised. Two months into the trade war, however, the opposite has come true. Our trading partners have not come to the table, but instead have imposed painful retaliatory tariffs on US industries already reeling from higher import prices. With no end in sight, Trump’s tariffs have done significant damage to the economic health of the country, and they threaten to permanently harm the competitiveness of American workers.

First, Trump’s tariffs have harmed industries that rely on imported products, predominately steel and aluminum, as inputs for their own products. Heavy manufacturing companies, such as equipment producers Caterpillar and John Deere, have reported a drop in earnings of almost 10% since the tariffs took effect, as steel is the industries’ largest raw material cost and Trump’s tariffs have increased its price by 25%. Small manufacturing businesses have felt the largest negative impact, because they don’t have the economies of scale to cushion a significant increase in costs. Lawn equipment producers in Indiana have been forced to cut 40% of their workers, nail manufacturers in Missouri have axed 15% of their workforce, and television-manufacturers in South Carolina have closed their plants. The construction industry, which employs over 7 million mostly blue collar workers, has in particular been harmed by Trump’s trade wars. Tariffs on steel and aluminum alone are estimated to cause the loss of 28,000 construction jobs as the raw materials and heavy equipment used in the construction process have become significantly more expensive. All told, the non-partisan Trade Partnership group estimates that Trump’s $22 billion in steel and aluminum tariffs alone will cause a loss of 179,000 jobs in manufacturing and services, far outpacing the estimated 33,000 job increase in steel and aluminum production.   

Second, Trump’s tariffs have led to the imposition of retaliatory tariffs on US exports by China, Canada, and the European Union. The agricultural industry, whose exports are heavily affected by Chinese demand, has been hit particularly hard, with the prices received by American farmers for soybeans falling over 16% to decade-long lows and prices for hogs and corn falling by 15%. In Iowa alone, farmers could lose $630 million as a result of losing export access to foreign markets if Trump’s tariffs stay in place. Trump himself has conceded that his tariffs are harming agriculture, which led him to provide a $12 billion bailout to struggling farmers. Even this significant amount (over $14 for every $100 of imports affected by the tariffs) isn’t enough to stop the damage from reciprocal tariffs, however. The US Chamber of Commerce estimates that bailouts to cover losses from retaliatory tariffs for all US industries would require an additional $27.2 billion in funding, of which $7.6 billion would affect automobile manufacturers and $9.6 billion other manufacturing industries. Rather than save US manufacturing, the trade wars are destroying jobs and creating bailout-dependent industries.

Finally, Trump’s tariffs are having a significant impact in an area often missed in the political discourse: business investment. For investors at home and abroad trying to invest their capital, the loss of export access for US industries and the extremely volatile policy environment in Washington has acted as a severe roadblock to investment in new factories and infrastructure. Net foreign direct investment (the level of investment coming into the country minus the level leaving the country) fell by 37% from the first quarter of 2017 to the first quarter of 2018. From January to May 2018, Chinese net investment in the US was actually negative $7.8 billion, meaning that more investment funds left the US than entered, in the midst of a 90% drop in Chinese investment into the US in 2018.

It is abundantly clear that Trump’s tariffs have been damaging for the US economy: fewer jobs, struggling companies that require government bailouts, and an exodus of investment spending. This lack of economic success mirrors the difficulty that the Trump administration has had in keeping its promises of an economic “revival” for the economy as a whole. In the 18 months since Trump became President, 300,000 fewer jobs were created than in President Obama’s last 18 months in office. Even worse, real average wages declined by 0.2% from July 2017 to July 2018, weakening Trump’s claim that his $1.9 trillion tax cut would help the middle class.

In particular, President Trump was elected to office on a message of creating economic opportunities for those left behind by this new age of globalization. By most metrics, however, he has failed to meaningfully improve the living standards of these “forgotten Americans”. In fact, from July 2017 to July 2018, 35.4% of counties that voted for Trump in 2016 actually lost jobs on net, compared to only 19.2% of counties that voted for Clinton. Trump’s tariffs have further harmed the economic opportunities of these people who most supported the president. In the Rust Belt, manufacturers from the auto to the household appliance industries have lost significant consumer bases and earnings, forcing them to lay off thousands of workers, while farmers across the Midwest are seeing their profit margins turn negative as prices for their crops plummet. The hardest hit groups haven’t been white-collar workers in coastal cities, but instead manufacturing, construction, and agricultural workers in states that voted for Trump.

Furthermore, the effects of the trade wars won’t go away anytime soon, even if the tariffs are rescinded. Domestic manufacturers and farmers have seen their export consumer bases eroded by cheaper foreign competition as a result of the tariffs (for example, Brazilian and Canadian soy bean exports to China that aren’t subject to reciprocal tariffs). These consumer bases take decades to build up, and their loss means that even when the tariffs are rescinded, US workers will have less access to foreign export markets for years to come, if at all. Indeed, Chinese officials have begun to say that American agricultural exports will be fully replaced by other countries’ exports, even after the tariffs are rescinded.

The first and second essays in this series argued that Trump’s tariffs were illegal and based upon utter ignorance by the President. Beyond that, the tariffs are enacting large costs onto average American workers, particularly those that were promised better economic opportunities by Trump during the 2016 election.  Congress must act to rescind these tariffs, before US manufacturers and farmers permanently lose out on the 86% of global demand that is outside of the United States.

TrumpRussia and the Weakening of American Democracy

As the gravity of Trump's historic betrayal of our nation weighs further upon us this week, NDN firmly plants itself in the camp that believes those of us in the center-left should be making the issues around Trump and the GOP’s degradation of our democracy front and center in American politics. Whether it is Trump Russia, the attacks on a free press, unprecedented official corruption and malicious lying, restricting people’s ability to vote, illegal gerrymandering and racial discrimination, the stealing of a Supreme Court seat or Congress’s unwillingness to hold hearings, use CBO scores, conduct de minimus oversight or other abuses of their power the issue of the modern GOP’s abandonment of its commitment to democratic norms is a grave threat to our understanding of what a democracy is and should be.

Proud patriots here in the US will be working to renew and repair our democracy for years if not decades to come. This will become one of the central responsibilities of those who will serve in elected office, and we should begin this conversation with the American people today. It borders on recklessness to leave these tasks to Robert Mueller and the courts, as history has shown that even in strong democracies like ours there is no guarantee these institutions can withstand a sustained assault from an autocrat and his enablers in the legislature.

Still have doubts that Trump colluded, coordinated, conspired, partnered with Russia in 2016? Read this thread. It is no longer in doubt. 

For more on NDN’s views on these matters be sure to check out our vertical, Renewing Our Democracy.

- Simon Rosenberg, Nov 2017

Invite: Thur, Nov 9th - Protecting Our Elections and Politics from Interference

The very openness of American society is being exploited by foreign actors to further their own political ends. To offer up some ideas on what can be done we will hold an event next Thursday, November 9th in the Rayburn House Office Building. Headlining the conversation will be Rep. Adam Smith (D-WA), ranking member of the Armed Services Committee, and primary author of a bill designed to counter Russia’s rising global ambitions, the “Fostering Unity Against Russian Aggression Act of 2017.”

In addition, we have assembled a trio of thought leaders in this emerging space for what will be a spirited discussion. Joining us are:

Amb. Karen Kornbluh, Clinton/Obama Administrations – Karen will talk about the new information landscape facing modern democracies (bio).

Tim Chambers, Dewey Digital – Tim will also talk about the new information landscape but with a particular focus on tackling the challenge of malicious social media bots (bio).

Greg Miller, OSET Institute – Greg will discuss ways we can fortify and modernize our elections infrastructure (bio).

Simon Rosenberg, NDN – Simon will moderate and offer closing remarks (bio).

This important conversation will take place on Thursday, November 9th in Rayburn House Office Building Room 2456 and run from 10:30 to noon. You can RSVP here.

This event is free and open to the public. All are welcome. Feel free to send this invitation on to others you think might be interested. Seating is limited and first come, first served.

Further Readings

As background reading for the event, be sure to check out the following:

Bringing Transparency and Accountability to Online Political Ads, Karen Kornbluh, Council on Foreign Affairs, 10/30/17. The internet makes it easy for political ad buyers to obfuscate their donors and handlers. Despite the challenges, there are significant steps that Congress and social media platforms can take to improve transparency.

A Primer on Social Media Bots And Their Malicious Use In U.S. Politics, Tim Chambers, 9/13/17. This new, compelling paper by long time NDN collaborator Tim Chambers explains what bots are, looks at their malicious use in US politics and offers some ideas on what to do about it in the days ahead. 

Critical Democracy Infrastructure, OSET Institute, September 2017. OSET addresses the criticality of the technology infrastructure of election administration and operation.

Column: Make ACA Sign-Ups an Annual Civic Ritual

Today, US News published Simon's latest column, “Make ACA Sign-Ups an Annual Civic Ritual.”  An excerpt –

.....Somewhere around 1 in 12 Americans of any age – about 25 million people – get their health insurance and health care through provisions of the Affordable Care Act. The annual period to sign up for insurance starts on Nov. 1, and it is critical that responsible members of both political parties – but particularly Democrats – commit time and resources to help people sign up this year.

Why is this so important? Because, remarkably, President Donald Trump's administration has taken a series of dramatic steps to make it harder for his fellow citizens to sign up under the health care law this year. It has cut the enrollment window to sign up from 12 to just six weeks, and is spending far less money marketing the enrollment period to the public (TV ad spending is dropping from $100 million to $10 million). Regional directors in the Department of Health and Human Services were told not to participate in outreach events and administrators will take down healthcare.gov on most Sunday mornings during the already shortened enrollment period. It is likely that without a significant push by office holders, community leaders, health care providers and regular citizens, millions of Americans could miss the deadline this year and end up without insurance. It is hard to believe that our government is taking such aggressive steps to make it harder for American citizens to get affordable care – but it is so. And those of us who believe in the ACA, as the law is known for short, should do something about it.

To continue reading, please refer to the US News link. You can Simon's previous US News columns here.

Trump is right to be worried about Arizona (and Texas too)

When Donald Trump returns to Arizona tomorrow, he is returning to a state that is now among the most important Presidential battlegrounds in the country.

Though it was not heavily contested by the Clinton and Trump campaigns in 2016, a combination of Trump’s structural weaknesses with Hispanic and Millennial voters and the growing share of the vote in Arizona of both these groups have made this state far more competitive than it has been in the past. Some background, and data:

Arizona now a large, core Presidential battleground state. Of the 15 expanded 2016 battleground states (AZ, CO, FL, GA, IA, ME, MI, MN, NC, NH, NV, OH, PA, VA, WI), Arizona was Clinton’s 11th best (losing by a margin 3.5% points). Clinton performed worse in NC (3.7), GA (5.2), OH (8.4) and IA (9.1). Arizona has more Electoral College votes (11) than 6 of these battlegrounds – WI (10), CO (9), IA (6), NV (6), ME (4), NH (4) – and almost as many as VA (13) and NC (15).

Arizona is trending Democratic. In an election that swung 1.8 % points from 2012 towards Trump, the GOP margin slipped in AZ from 9.1% points in 2012 to just 3.5 in 2016. This 5.5 point shift was the 3rd largest shift towards the Democrats of any medium to large state in 2016, only outpaced by CA (7.0) and TX (6.8). According to the 2016 exit polls, 18-29 year olds went 53-35 for Clinton and 18-44 overall went 49-39. Non-white voters, making up a quarter of the electorate, and growing rapidly, went 61-31 for Clinton. This number could clearly get much worse for Trump and Rs given Trump’s embrace of a politics seen as anti-immigrant and anti-Latino.

Arizona a sign of continued Democratic gains in the “Latin Belt.” While much attention has been given in recent months to the Rust Belt, it is important to also pay attention to what I call the “Latin Belt” – AZ, CA, CO, FL, NM, NV and TX – states with large, growing Hispanic/Latino populations. The slow migration of these states from Nixon/Reagan Sunbelt Republican states to more competitive and even now Democratic states have been one of the most important demographic stories in American politics in recent years. This region includes the 3 biggest states in the country and has 29% (153) of all the nation’s Electoral College votes. According to 538, it will add another 7 Electoral Votes in 2024 due to reapportionment.

As recently as 1984, all of these states voted Republican. All but California voted Republican in 1988. Florida remains a contested battleground. New Mexico has moved solidly into the Democratic column. Colorado (4.9) and Nevada (2.4) gave Clinton two of her four biggest margins of victory in the battleground. The remaining two – AZ and TX – moved dramatically towards Democrats in 2016.

As I wrote prior to the election, it is possible that Texas joins Arizona as a new Presidential battleground in 2020. Texas has among the highest Millennial and Hispanic share of population of any state in the US, comparable to the shares of each of these fast growing and Democratic-leaning groups in true blue California. Trump did very poorly with both of these groups in 2016 – losing 18-29s 55-36, 18-44s 49-43 and Hispanics 61-34. In a recent Texas Tribune/UTexas poll Trump’s job approval was 43-51, one of the most dramatic drops of approval he has seen in any state (TT/UT poll has similar findings as the Gallup poll referenced here).

While Trump should be comforted that he won Texas by 9 points in 2016, if Texas sees a shift in 2020 comparable to its 2016 shift of 7 points Texas could indeed join Arizona as a new Presidential battleground.

Trump’s Presidency Has Been Hostile To The Southwest/Border Region In Ways Which Are Already Causing Him Problems – While focused like a laser beam on the industrial north, Trump’s Presidency has been hostile to much of the Latin Belt, the southwestern/border region in particular. The demonization of Mexico, the border wall, the renegotiation of NAFTA, the anti-Hispanic/anti-immigrant /intolerant stances are controversial and difficult positions for him in a region of the country with many recent immigrants and which has deep cultural and economic ties with Mexico.  According to the exit polls, 2016 Presidential voters in Arizona choose legal status over deportation by 76-18 (higher than the nation), and opposed a border wall 51-45.  A new poll just released in Arizona has Trump at a dangerously low 42-55 approval, and a clear majority opposing a possible Arpaio pardon. 

I warned the White House about misunderstanding these politics in a recent US News column, "Steve Bannon Meet Russell Pearce." 

It should be instructive that among the most important opposition to Trump in both parties is coming from this region of the country. Senators Flake and McCain have become perhaps Trump’s most important GOP opponents in the US Senate, and Gov. Jerry Brown, Sen. Kamala Harris and Rep. Ruben Gallego have become nationally recognized leaders of the Democratic opposition.

Whatever Trump does in Arizona tomorrow – pardon Arpaio, endorse Flake’s GOP primary challenger – he returns to a core 2020 battleground state that appears to be slipping away from him and more broadly, the Republican Party. He is right to be concerned.  Whether what he does tomorrow in Arizona helps or hurts him remains to be seen.

Note: Earlier this year Simon did a longish interview with Phoenix's KJZZ 91.5 on Trump, Arizona and immigration.    

Our Most Important Battle - Please Support the Good Work of NDN Today

Dear Friends,

For more than a decade now NDN has helped our elected leaders and policy makers better understand the big changes sweeping America and the world. We’ve helped lead ongoing conversations about demography, technology and media, globalization and its related geopolitics for over a decade now. Along the way we’ve had some inspiring victories and accomplished some important things. But no time in our history feels as important as today and these early days of the new era of Trump.

These past few months we’ve been heads down, helping create early understandings about what exactly we and the world are dealing with. We wrote early on about Trump’s worrisome and potentially treasonous relationship with Russia; his unprecedented corruption and willingness to ignore long held Democratic norms; his dramatic reluctance to align himself with the West and its values; his reckless economic policies and betrayal of the voters who elected him; and his inhumane immigration crackdown. In each of these areas NDN has made early and sustained contributions to creating a better understanding of what was indeed happening.

But it has not all been about Trump. We’ve offered a series of pieces about the future of the Democratic Party; about the need for Democrats to embrace their sound economic stewardship over the past generation as the critical first piece of the development of a new and compelling agenda; about the need to let the Democrat’s generational wheel turn and a new wave of promising leaders to step forward; about the need to be patriots now not partisans; and about the urgency of Democrats to assume responsibility for the global order built by previous generations of Americans and work to both modernize and preserve it for our kids and theirs. We can’t beat something with nothing as has been said, and we are also trying to do our part to help ensure what comes next for the center-left is even better than what we’ve had.

So, yes, we’ve been busy. But that’s what we are here for, and why we need your support today. There is a lot of work to be done. And your support is what makes it all possible. I hope you will step up with a contribution of whatever amount makes sense – $25, $50, $100, more. As you know well it is the generosity of our community that makes all this cutting edge and impactful work possible.

So please do give today. We don’t have a grassroots army or compelling television ads. But we do have years of experience, resilient keyboards and powerful insights – and those too have their place in our current and extraordinary struggle. Your support will ensure the good work just keeps on coming at this critical time.

Best,
Simon

On Trump's Meeting w/Lavrov Today: Time To End The Appeasement of Russia

This morning we released the following statement to the media and our community: 

When President Trump meets with Vladimir Putin’s most senior aide at the White House today, it is essential that the President use this time to raise concerns about Russia’s rising ambitions on the global stage. Among the issues that should be on the agenda:

• Russian interference in the elections and internal politics of the United States and Europe
• Russia’s violation of the INF nuclear treaty (link)
• The imperative of returning Crimea to Ukraine, and cessation of its adventurous military operations in the region
• Rising Russian support of the Taliban in Afghanistan (link), and escalation in Libya (link)
• Russia’s establishment of a military installation in Nicaragua (link)
• And of course, the need for Russia to stop propping up Syria’s murderous dictator, and prolonging the Syrian Civil War

“While Americans should be very concerned about Russia’s intervention in our election last year on behalf of Donald Trump, what is far more worrisome is President Trump’s unwillingness to challenge Russia’s rising ambitions on the global stage since becoming President” said NDN President Simon Rosenberg.

“In another age we would call President Trump’s early approach to Russia “appeasement.” Today, President Trump has an opportunity to demonstrate to the American people that he is capable of standing firm against this rising global threat from a newly ambitious Russia. His failure to raise these matters with FM Lavrov and demand a change in Russia’s course would send a signal to the world that America supports Russia’s newly aggressive stance. Such an approach is of course unacceptable, and would give additional fodder to those who have been argued that Trump can be friends with Putin or be President of the United States - but he cannot be both.”

Update: So the meeting happened.  Lavrov brought along Ambassador Kislyak, thought to be the chief Russian spymaster in the US.  These two men helped lead the Russian campaign to elect Trump.  And Our President met with them without any other American in the room - no translator, no press, no national security council staff.  Just Putin's top aide, and the Russian spymaster in the US.  How Kislyak was allowed into the Oval Office is beyond comprehension.  And of course the White House's read out of the meeting was milquetoast, and neglected to mention Kislyak's presence.  And of course did not mention anything about the ongoing Russian interference campaign in the US or in Europe.  Pure, clear, mighty appeasement it is. 

Update: So I took to Twitter and elaborated on this piece a bit.  Well worth your time.  Biggest issue in American politics today. 

"No Normal Time" - A Special Note from Simon

Dear Friends,

Some days it is important to note just how unusual, and pernicious, American politics has become. Sally Yates’ testimony today reminds us that our President and his allies are under an unprecedented investigation for treason and active collusion with a hostile foreign power. The House passed ACHA and its emerging budget strategy is an extraordinary betrayal of everything Donald Trump campaigned on; would do clear, measurable harm to tens of millions of Americans in order to give tax cuts to the wealthiest among us; and as Paul Krugman argues today in the New York Times represents a degree of direct lying about policy that is also unprecedented in modern American history. More stories of rank and unprecedented corruption by the Trump family once again dominate our headlines this morning. And just this morning our President took to Twitter to discuss golf and once again give clumsy cover to the Russian attack on the American homeland (and French, German and many others) last year. These things are not normal, or okay.

While there is good news out of France this morning, we cannot forget just how extraordinary this moment in American politics is. There is no “business as usual” option here, a sense that things will somehow settle down to something resembling “normal politics.” This is why we’ve so aggressively advocated that Democrats start to make these matters – the appeasement of Russia, the corruption, the epic malevolent lying, the denigration of democratic norms – front and center in their negotiations with Trump and the GOP. We cannot segregate off traditional policy considerations from these broader areas of concern as doing so will be in its own way a form of appeasement and acceptance.

We also have recently advocated that the RNC be challenged to take far more aggressive steps in combating the reoccurrence of foreign attempts to influence our elections that FBI Director Comey predicted will come. The RNC and thus the entire Republican Party and all of its members played a significant role in mainstreaming the Russian operation in the US last year, and were thus critical to its success. This shameful legacy needs to be confronted by the current leadership of the RNC, and steps taken to work with willing Democrats to create a united political front against foreign interference in our elections.

These are no ordinary times. History tells us that in times like these many well-intentioned people will fail to understand how extraordinary the moment is, and to allow wishful thinking to overwhelm good sense. We in America don’t have a lot of experience with this kind of politics, so perhaps it is understandable. But let me be as clear as day – this organization will not stop challenging those in power to meet this worrisome moment head on and with force equal to what is coming at us. Creativity, strategic thinking and good old fashioned courage are required now. And we are going to do our part in making sure that America comes out of this time stronger, wiser and more just than before. We hope you will continue to partner with us in these consequential days ahead to assure that it is so.

Best,

Simon

Monday, May 8th 2017 From Washington, DC

Video: Simon joins Fernand Amandi, Roger Stone on Trump's first 100 days

NDN President Simon Rosenberg joined WIOD's Fernand Amandi and Roger Stone to discuss the first 100 days of Trump's Presidency.  It is well worth watching.  

Backgrounder: Budgets, Health Care and Trump's Great Betrayal

With attention returning to budgets and the US economy, NDN has assembled some of our work on these matters over the past few months.  We hope you find these analyses helpful.  

Trump's Tax Plan is Aimed at the 2018 and 2020 Elections, Not U.S. Competitiveness, Rob Shapiro, NDN.org, 4/26/17. Trump's claims that damage from higher deficits will be minor compared to the benefits for US competitiveness, economic efficiency, and tax fairness are nonsense, and the real agenda here is the 2018 and 2020 elections.

Release: Still no 2017 budget from GOP, or proposal from White House, Simon Rosenberg, NDN.org, 4/26/17. While the President’s revenue outline today is a late but welcome development, it cannot be given serious consideration outside the eventual full budget proposal that is usually submitted to Congress in February.

Trump puts foreign investors first by supporting the Republican tax plan, Rob Shapiro, The Hill, 3/28/17. Rob weighs in on the very real problems of the House GOP's proposed border adjustment tax.  

Trump's Great Betrayal, Simon Rosenberg, NDN.org, 3/23/17. President Trump is pursuing policies deeply at odds w/his pledge to help every day Americans. It should become known as "The Great Betrayal."

Column: 5 Ways Trump Could Stop Obama's Expansion, Simon Rosenberg, US News & World Report, 3/23/17. There just isn't a lot of justification for the market's optimism that Trump's economic policies - Maralagonomics - will keep the Obama expansion going.

Memo: In A New Global Age, Democrats Have Been Far Better for the US Economy, Deficits, and Incomes, Chris Murphy and Simon Rosenberg, NDN.org, 2/21/17. In a new memo NDN finds that over the past generation of American politics Democrats have been far better for the economy, deficits and incomes. 

Steve Bannon, Meet Russell Pearce, Simon Rosenberg, US News & World Report, 2/21/17. If history is a guide, Trump's efforts to institutionalize xenophobia and ramp up immigration enforcement could disrupt businesses, hurt the US economy and tear apart families. The blowback could be significant and cause lasting damage to his Presidency.

If you would like to read more of Rob's other recent work, be sure to review our backgrounder, "Rob Shapiro on the Economy."

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