“On April 12, 1861, rebel artillery opened fire on Fort Sumter, beginning the U.S. Civil War. The war eventually became a catastrophe for the South, which lost more than a fifth of its young men. But why did the secessionists believe they could pull it off?
One reason was they believed themselves to be in possession of a powerful economic weapon. The economy of Britain, the world’s leading power at the time, was deeply dependent on Southern cotton, and they thought a cutoff of that supply would force Britain to intervene on the side of the Confederacy. Indeed, the Civil War initially created a “cotton famine” that threw thousands of Britons out of work.
In the end, of course, Britain stayed neutral — in part because British workers saw the Civil War as a moral crusade against slavery and rallied to the Union cause despite their suffering.
Why recount this old history? Because it has obvious relevance to the Russian invasion of Ukraine. It seems fairly clear that Vladimir Putin saw the reliance of Europe, and Germany in particular, on Russian natural gas the same way slave owners saw Britain’s reliance on King Cotton: a form of economic dependence that would coerce these nations into enabling his military ambitions.”
“Do you remember Donald Trump’s trade war? You can be forgiven for having forgotten all about it, given everything that has happened since; it sounds trivial compared with his effort to stay in power by overturning a fair election. Even in terms of policy while in office, it was far less important than his pandemic denial, and probably less important than his tax cuts or his sabotage of health care.
But the trade war was uniquely Trumpian. His other policy actions were standard-issue Republicanism, but the rest of his party didn’t share his obsession with trade deficits; indeed, he probably wouldn’t have been able to do much on that front except for the fact that U.S. law gives presidents enormous discretion when setting tariffs. Only Trump really considered trade deficits an important issue; and he, er, trumpeted what he called a “historic trade deal” under which China agreed to buy an additional $200 billion in U.S. goods and services by the end of 2021.
Now, Chad Bown of the Peterson Institute for International Economics, who has been the go-to source on the trade war from the beginning, has a final assessment of that deal. And it turns out to have been a complete flop: “China bought none of the additional $200 billion of exports Trump’s deal had promised.”
So Trump was a chump; the Chinese took him to the cleaners. But if you want to do a post-mortem on the trade war, Trump’s haplessness in dealing with foreign leaders is actually a minor part of the story. Far more important is the fact that the shocks we’ve been experiencing since the pandemic began make the Trumpian view of trade look even more economically foolish than it did when he took office.”
“When I was in my 30s, my parents gave me a sweatshirt bearing the words “Global shmobal.” At the time, I was going to many economics conferences; when my parents would ask me what the latest conference was about, I apparently always replied, “Global shmobal.”What I didn’t know at the time was that the global was about to get even shmobaler. In the mid-1980s, world trade had recovered from the disruptions and protectionism of the interwar period, but exports as a share of world G.D.P. were still back only to around their level in 1913. Starting around 1988, however, there was a huge surge in trade — sometimes referred to as hyperglobalization — that leveled off around 2008 but left the world’s economies much more integrated than ever before:
When I was in my 30s, my parents gave me a sweatshirt bearing the words “Global shmobal.” At the time, I was going to many economics conferences; when my parents would ask me what the latest conference was about, I apparently always replied, “Global shmobal.”
What I didn’t know at the time was that the global was about to get even shmobaler. In the mid-1980s, world trade had recovered from the disruptions and protectionism of the interwar period, but exports as a share of world G.D.P. were still back only to around their level in 1913. Starting around 1988, however, there was a huge surge in trade — sometimes referred to as hyperglobalization — that leveled off around 2008 but left the world’s economies much more integrated than ever before: . . . . “
” . . . Hardly any attention was paid to the risks arising from the number of firms that might be involved in making and delivering any given product. The potential loss of revenue if the supply chain failed to deliver goods on time was simply ignored.
The company at the top of a supply chain often has little insight into its suppliers’ suppliers or into the transportation system that connects them. Incident after incident — from the shutdown of the U.S.-Canada border after 9/11 to the earthquake that crippled hundreds of Japanese auto parts plants in 2011 to pandemic-related factory closures in 2020 — has shown long supply chains to be more fragile than imagined. For many firms, the consequences can be painful, even fatal.
And the business risks are not limited to disruption. Famous firms have seen their names tarnished by scandals involving working conditions or environmental practices at obscure companies far down their supply chains. When consumers in Europe and North America, concerned about repression of the Uyghur minority in China, demanded that apparel companies disclose whether their clothing contained cotton grown in Xinjiang province, many companies, well removed from the production process, did not know.
Meanwhile, the ultralarge container ships like Ever Given that have entered the world’s fleet over the past few years have made long value chains even more problematic. These vessels, some carrying as much cargo as 12,000 trucks, steam more slowly than their predecessors. The complexity of loading and unloading often puts them behind schedule, and the sheer number of boxes moved on and off a single ship tangles ports and delays deliveries.” . . .
By Robert Leonard
Mr. Leonard is the news director for the radio stations KNIA and KRLS.
July 26, 2018
A farm near Amana, Iowa.CreditScott Olson/Getty Images
“KNOXVILLE, Iowa — Today President Trump is visiting Dubuque, Iowa, where every year at harvest time, millions of tons of grain come via rail and truck to be loaded onto barges on the Mississippi River and shipped to Mexico, China and much of the rest of the world. Harvest puts coin into the hands of farmers, and they and their communities — indeed all of America — profit. Not this year.
The president is here to trumpet a $12 billion plan to aid American farmers. Why do they need aid? For Iowans, it’s because 33 percent of our economy is tied, directly or indirectly, to agriculture, and Mr. Trump recklessly opened trade wars that will hit “Trump country” — rural America — hardest and that have already brought an avalanche of losses. Indeed, the impact of his tariffs will probably be felt by family farms and the area for generations.
So perhaps visiting Dubuque is the least he could do.
The cost of being shut out of overseas markets for soybeans, beef, pork, chicken and more will be in the billions. Once those markets are gone, they will be difficult to recover. Commodity prices continue to drop, and good weather suggests an excellent crop is in the making, which will drive prices further down.
Brazil is ready to step in with increased soybean production, and China has already shifted its purchasing power there.
via Opinion | Trump Has No Idea What His Tariffs Have Unleashed for Farmers – The New York Times
July 18, 2018 134 查看本文简体中文版查看本文繁體中文版
BRUSSELS — From trade to regulation to security, America’s traditional allies are accelerating their efforts to buttress a global system that President Trump has seemed prepared to tear down.
After months of stunned indecision, they have undertaken a flurry of efforts intended to preserve the rules-based order the United States created after World War II and championed ever since.
The most obvious example came on Monday, the same day a stunned world watched Mr. Trump praise President Vladimir V. Putin of Russia as a competitor after having dismissed Europe as an economic “foe.” A few thousand miles away, in Beijing, the leaders of the European Union and China held a long-scheduled meeting of their own.
In the past, expectations for such meetings were low, given the conflicts on trade and human rights between the Europeans and the Chinese. But while those differences remain, this summit meeting produced an unusual joint declaration and a common commitment to keep the global system strong.
The next day, the Europeans traveled to Japan and signed the biggest free-trade agreement in history, just the sort of deal the Trump administration has criticized.
And on Wednesday, Europe’s top regulator announced a $5.1 billion fine against Google, another strong indication that Brussels is not just fighting to maintain the rules-based trading order, but is also positioning itself as the watchdog of that system.
After months of denial, anger, bargaining and depression, Europe and other parts of the world have accepted that Mr. Trump and his mission of disruption are not going away.”
Source: Europe and Asia Move to Bolster Global Systems That Trump Has Attacked – The New York Times
These days I’m writing a lot about trade policy. I know there are more crucial topics, like Alan Dershowitz. Maybe a few other things? But getting and spending go on; and to be honest, in a way I’m doing trade issues as a form of therapy and/or escapism, focusing on stuff I know as a break from the grim political news.
Anyway, as Britain’s self-inflicted Brexit crisis (self-inflicted with some help from Putin, it seems) comes to a head, it seems to me worth trying to explain some aspects of the economics involved that should be obvious – surely are obvious to many British economists – but aren’t, apparently, as obvious either to Brexiteers or to the general public.
These aspects explain why Theresa May is trying to do a soft Brexit or even, as some say, BINO – Brexit In Name Only; and why the favored alternative of Brexiteers, trade agreements with the United States and perhaps others to replace the EU, won’t fly.
Now, many of the arguments for Brexit were lies pure and simple. But their claims about trade, both before and after the vote, may arguably be seen as misunderstandings rather than sheer dishonesty.
via Opinion | Brexit Meets Gravity – The New York Times