On the one hand, I agree that shaking up the situation with China is required. However, what Trump achieved there is, at best, a meager start. In fact, the biggest piece of it is a giant hand-out to Mnuchin’s and Wilbur Ross’s interests and friends in the form of opening China’s financial services sector, for which Trump will no doubt be rewarded. This doesn’t do much for America or American employment.
The US makes almost nothing that China sends here and, even with the fairest trade and trade relationships, never will. See Apple. Instead, the one thing that he helped only slightly and, for all I can tell, probably not at all, was the focus on forced tech transfers and intellectual property theft. But here, also, there will be little to show for that, since it requires a serious amount of monitoring and enforcement. This is hard and extensively detailed work and none of it has proceeded anywhere to where it needs to in order to have an effect. This band will play on, only quieter.
As for Europe, I can assure you that no European will ever buy a Chevy pickup or a Ford SUV. Why? Most Europeans drive cars still and American companies are exiting this space entirely. So the only cars you see on the road are German or Japanese And, when you look at what Europe ships here, it is cars that already without tariffs cost 20%+ more than any built and sold by US companies. In addition, all the major European and Japanese car companies sell or will soon sell most of their cars from US factories. And, they already ship US built cars in the US and to the rest of the world. The change in tariffs between the two will have absolutely no effect.
Even with the facts on the ground now and any “trade barrier” change supposedly forced by Trumps disruption, these are beside the point when trying to increase the size and employment of the US manufacturing sector. US manufacturers very little of what the world wants or would want. And the US has for years fallen further and further behind on its ability to maintain a credible manufacturing sector. The reason for this is the short-termism of the American economic model and the long-held Republican belief in the “free market” and “free trade”. Exhibit A right now is Boeing, although you could also point to GE or our now meager steel industry. Our manufacturing culture is not a culture of excellence and strategic value (thanks to the ideologies cited above). It’s a financial instrument that should only benefit investors.
While the US (and the now inert Republican party) has been on the forefront of combating “mercantilism”, the rest of the world has never stopped believing that trade and the economy should be at the service of the well-being of their own people. The more successful examples (see all of northern Europe and Japan) understand that a great deal of cooperation and a measurable mutual benefit for private corporations and their citizens should be at the center of their model. The best example of this is Germany. You can look down the list of disadvantages and advantages of the US and German economies and societies and only come to the conclusion that the US punches way below its weight in so many ways. Most of all in the well-being of its citizens.
In the end, Trump will have changed nothing. Whether he gets re-elected or after a Democratic president comes into power, the fact remains (even for many Democrats) the US model was good for only a short period, after WWII when there was no competition. Until the US doesn’t look for the problems outside its borders or in its lack of purity in its economic ideology, but looks for them inside its system and they way it practices its version of capitalism, there’s only one way things will continue: down.
