How Are the Self-Proclaimed Economic Savior’s Policies Doing?
How surprised will we be if it turns out that Trump’s main policy achievements just aren’t working out? And how much more might we be that the shortcomings of the presidential platforms peak just before the next election campaign gets traction?
Until now, the power of economic achievements in employment, in spurring American industrial growth and economic standing in the world have been the president’s impersonal measuring stick of achievement in the White House.
Of course, that has paled next to cries of anti-immigration motifs, resounding “Lock ‘er up” calls about Hillary Clinton and insistence on “no collusion” by the president about his presidency. Along the way, surely, he credits himself with taking on China through tough tariffs, taking on Iran and North Korea through tough economic sanctions and taking on Democrats and the media just to keep his hand in non-stop campaigning.
But above all, those elements of the economic strategy – protectionist tariffs toward fairer trade deals, cutting regulations and taxes, and reducing trade deficits in pursuit of “America First” have come to best reflect the Trump deal-based governing strategy.
But now, a year and some after the start of all of them, we’re seeing interesting developments:
The Commerce Department said this week that despite two years of America First-ism, the U.S. merchandise trade deficit is getting worse rather than better. After all the fuss about the tax cuts, it turns out that corporations benefited, not workers.
And while joblessness is at an all-time low, the economy turns out to be churning out many more jobs at the bottom end of the skills market than middle-class jobs. Wages still lag, city centers are still rotting, infrastructure projects are still crumbling, public housing is still in trouble.
Oh and then there is this massive debt resulting from unpaid for tax cuts.
At the border, the Trump protectionist approach appears to be not working, as the monthly immigration numbers attest.
On top of that, North Korea is reported to be rebuilding its temporarily shut missile-testing facilities, the Europeans are pulling themselves apart, China and Russia are being openly more adventurous militarily in their spheres and the Middle East remains an unsolved maze.
Quite apart from the Trump under pressure of myriad simultaneous criminal and ethics investigation, there is the emerging truth of Trump’s actual governance.
Of all of it, the trade policy has been a centerpiece for the president himself. Through aggressive use tariffs, Trump has promised to reset all that is wrong with Chinese trade, to rebalance trade deficits with South Korea, Japan and Europe, and wildly expand foreign sales to places like Saudi Arabia.
Now we learn from the actual figures that the trade deficit with foreign countries has hit $892 billion in merchandise trade, the largest in the nation’s history. The deficit is $419 billion with China alone, even in the midst of a pressured negotiation to reset trade relations.
Commerce’s final 2018 trade report, delayed by the partial government shutdown, showed that the United States bought far more in foreign goods than it sold to customers in Africa, Asia, Europe and North America. When services are figured into the results, the totals are still much worse than two years ago. Again, all this matters to me because Trump has made it such a central measure for success.
As The Post said, “It has been evident for months that Trump was not shrinking a trade gap that he calls ‘unsustainable’ and that he says represents a major transfer of wealth from Americans to foreigners. Over the past year, even as he imposed tariffs on foreign-made solar panels, washing machines, steel, aluminum and assorted goods from China, imports roared ahead of exports.” It adds, “The president begins his re-election drive with a core campaign promise unfulfilled — and with a recent flurry of economic research showing that his embrace of tariffs is damaging the U.S. economy.”
There are lots of explanations, including a continuing shortfall in national savings, the success of the U.S. dollar against other currencies, the desirability of products produced overseas as compared with soybeans and coal, pushed by American interests.
If talks with China are successful, there will be an agreement to buy much more agricultural products from the United States. Still, some warn, that may well come at the expense of loss of similar sales to other countries. U.S. farms and factories have a limited ability to sharply increase output to meet a sudden increase in Chinese orders.
The president has tariffs on steel and aluminum and has threatened to apply them to imported cars and car parts.
The president often boasts about how much money the U.S. government is reaping from tariffs. “Billions of dollars, right now, are pouring into our Treasury,” he told the Conservative Political Action Conference last week. How that translates into benefits for you and me is unclear.
The biggest opponent that governing Trump has may be Trump himself.