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Trump the Eradicator
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There is much President Trump does not understand about the outside world. High up on the list is the crucial importance of US trade policy in creating and sustaining the American Empire.

The key to the post-World War II US imperium was granting other nations commercial access to the huge, vibrant American domestic market. This, as much as the highly successful Marshall Plan in Europe, was responsible for stabilizing the world economy and extending US geopolitical power across much of the globe.

I vividly recall when war-ravaged Japan produced only junk and cheap toys. A small town in Japan called ‘Usa’ produced fake Zippo cigarette lighters stamped ‘made in USA.’ Five years later, I was amazed to discover the quality and capability of new transistor radios from an electric company later known as ‘Toshiba.’

Japan’s hard work and determination played a key role in rebuilding that war-ravaged nation, half of whose cities and industries had been fire-bombed into ruins.

But industrial Japan would not have risen from the ashes without access to the American market which consumed an ever-larger share of Japan’s high quality exports.

South Korea and then China followed the same growth curve, responding to America’s insatiable demand for lower cost products. In both cases, the boom in exports sparked rising economic activity in domestic industries and commerce.

Today, large parts of the world economy depend on access to the US market, its primary engine of growth. Canada and Mexico are prime examples. Almost 80% of Canada’s exports go to the US. As a result, Washington treats Canada like a dependency, though most Canadians don’t seem to care.

A major trade war between the US and Canada looms, centered on efforts by Washington to break into Canada’s heavily protected dairy, poultry and swine markets. Amid all the heated exchanges between Ottawa and Washington, there is hardly any mention of improving the cruel treatment and lessening the terrible suffering of farm animals.

What President Trump and his advisors don’t seem to get is that China’s access to Wal-Mart shelves deeply affects its behavior. Profits from China’s exports have been plowed into $1.2 trillion of US treasury instruments, making the Communist People’s Republic America’s leading creditor.

It’s an old canard that nations that trade don’t go to war. Untrue. Just look at Britain and Germany in 1914 or Germany and the Soviet Union in 1941. War, as the bellicose Trump threatens, is quite possible even between major trading partners like the US and China.

Risks of a Sino-US military confrontation over the disputed South China Sea or North Korea remain dangerously elevated. The dangers of war to major industrial powers Japan and China also remain elevated, posing another systemic risk to the world economy.

ORDER IT NOW

Trump’s campaign to return manufacturing to America and repatriate profits held overseas makes good business sense. The ravaging of America’s once mighty industrial base to boost corporate profits was a crime against the nation by unscrupulous Wall Street bankers and short-sighted, greedy CEO’s.

The basis of industrial power is the ability to make products people use. Shockingly, US manufacturing has shrunk to only 14% of GDP. Today, America’s primary business has become finance, the largely non-productive act of paper-passing that only benefits a tiny big city parasitic elite.

Trumpism is a natural reaction to the self-destruction of America’s industrial base. But the president’s mania to wreck international trade agreements and impose tariff barriers will result in diminishing America’s economic and political influence around the globe.

Access to America’s markets is in certain ways a more powerful political tool than deployment of US forces around the globe. Lessening access to the US markets will inevitably have negative repercussions on US exports.

Trump has been on a rampage to undo almost every positive initiative undertaken by the Obama administration, even though many earned the US applause and respect around the civilized world. The president has made trade agreements a prime target. He has targeted trade pacts involving Mexico, Canada, the EU, Japan, China and a host of other nations by claiming they are unfair to American workers. However, a degree of wage unfairness is the price Washington must pay for bringing lower-cost nations into America’s economic orbit.

This month, the Trump administration threatened new restrictions against 120 US trade partners who may now face much higher tariffs on their exports to the US.

Trump is in a hurry because he fears he may not be re-elected. He is trying to eradicate all vestiges of the Obama presidency with the ruthlessness and ferocity of Stalinist officials eradicating every trace of liquidated commissars, even from official photos. America now faces its own era of purges as an uneasy world watches.

(Republished from EricMargolis.com by permission of author or representative)
 
• Category: Foreign Policy • Tags: China, Donald Trump, Free Trade 
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  1. Dnought says:

    The “Made in Usa, Japan” anecdote is an urban myth – in fact it is often used as a prime example when one attempts to define the phrase “urban myth”. The rest of this article also seems to be misinformed and suffers from a poor interpretation of post-war economic history.

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  3. But industrial Japan would not have risen from the ashes without access to the American market which consumed an ever-larger share of Japan’s high quality exports.
    South Korea and then China followed the same growth curve, responding to America’s insatiable demand for lower cost products. In both cases, the boom in exports sparked rising economic activity in domestic industries and commerce.

    But why is that America’s problem? America does not exist to make Asian nations rich.

    Also, Japan might be better off as a poorer nation. Without access to US markets, Japanese economy might have grown more self-sufficient and closer to Asia.
    Japan survived for many centuries without trade with the outside world.

    Japanese trade with the world led to super-rise in the economy, but it also made the Japanese totally dependent on the whims of a nation like the US. Also, Japanese came to adopt unreal expectations about the future. Japan got used to be rich from an ‘artificial’ trading system that couldn’t be sustained forever. If US markets had been closed off to Japan, then Japan would have found ways to survive by doing trade with China and USSR during the Cold War. It would have been poorer, but the expectations and realities would have been closer. Trade with US made Japan too rich too fast, and the Japanese have gotten addicted to the arrangement to the point where they cannot survive without the US.

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    • Agree: Grandpa Charlie
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  4. You need cheaper consumer products as you hollow out your industrial base otherwise no one could afford them (all the good jobs are gone). Isn’t globalization great?

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  5. The trade agreements arbitration “courts” are a threat to any regulation of the economic power structure on behalf of the general welfare. As such, their abrogation was beneficial. Since the US itself has degenerated into an odious hegemonic imperium, anything that weakens it is also beneficial to the general population. Thus, if the author is correct, Trump is benefiting the general public by weakening yankee and globalist power, whether or not it is his intent.

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  6. duglarri says:

    I think there is a common mistake being made in this article, as in a lot of analysis of Trump, in assuming that there is a Trump plan. Trump doesn’t have a plan. He has no ideas. All he has are the incoherent meanderings of a ten-year-old.

    Trump is against everything. He is against international trade, international cooperation, the United Nations, military alliances (like NATO), and science in general. He’s against arms control deals like those with Russia.

    Have we seen anything that he is actually for? He talks about trade deals, but what does a trade deal mean to him? His NAFTA proposals are typical: they are a gangster’s demands, not a negotiation. “We will continue to be allowed to sell to your government, but you won’t be able to sell to ours.”

    Trump is simply breaking every institution, rule, and agreement that he encounters. He’s blandly withdrawing the US from everything the US does internationally – and then equally blandly demanding that the rest of the world respect the US and follow its dictates.

    What his ten-year-old mind fails to see is the contradiction of his staggeringly incoherent “America First”. If America is intent on withdrawing from the world- why should the world not carry on without it? What choice does the rest of the world have?

    Trump is breaking all these things because he is so incomparably stupid, that he has no idea what they are for.

    He’s like a kid ripping the wires out under the floorboards of a jumbo jet. Don’t need this. Don’t like that. While the plane is in flight.

    The risk is- the virtual certainty is- that given time, he’ll pull out something vital.

    And then: down goes the plane.

    Read More
    • Troll: fish
    • Replies: @backwardsevolution
    The plane has been going down for years and Trump had nothing to do with that. As someone said above, the U.S. has been hollowed out and the good jobs were sent overseas. The only people who benefited were multinational corporations, and of course China. There truly was a "giant sucking sound"!

    Trump does have a plan; he is trying to undo this damage. Currently China freely exports her goods into the U.S., but trying to get American goods into China is very difficult. The U.S. multinational corporations have sold the U.S. out. They have handed U.S. technology to China on a silver platter, technology that U.S. taxpayers paid dearly for in terms of research. Talk about "incomparably stupid"! Had China tried to develop this technology on their own, it would have taken them decades to achieve - decades. And the only reason this was done is because it provided cheap labor for the multinationals and made them richer. The average U.S. citizen has not benefited from this arrangement at all.

    Your argument is way off.
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  7. Trump is heir to the greediest, bloodiest, and in many ways, dumbest, regime of the modern era. What he intends, or even can, do to improve it remains to be seen. If the election had gone another way nothing would have been done to change this abyss we have launched ourselves into. What we will resemble after Trump depends largely on how he deals with China: the future power. China wants our markets, yes. Does China need our markets, maybe now it does; but in another decade, maybe not.
    China has pumped money, dwarfing our Marshall Plan by a factor of ten, all over the map including to it’s enemies. Something we refused to do with our WWII allies to our eternal disgrace. Compare our record in hegemony with China’s shorter but less bloody one and make your own New Years prediction of the future.
    http://www.robertmagill.wordpress.com

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    • Replies: @backwardsevolution
    China is grossly in debt. They've been buying up the world with their newly-printed monopoly money.
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  8. KenH says:

    It’s an old canard that nations that trade don’t go to war. Untrue. Just look at Britain and Germany in 1914 or Germany and the Soviet Union in 1941.

    Or the U.S. and Japan up until 1941 where the latter got most of their steel and oil from the former. In the case of Germany and the Soviet Union, there were even Russian trains loaded with goods heading West to Germany when operation Barbarossa commenced.

    These facts don’t seem to stop libertarian types from fervently believing the canard that trade fosters friendly relations and forestalls conflict/war.

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  9. The TPP and TPIP were profoundly destructive and anti-democratic agreements. NAFTA should join them on the garbage heap of history.

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  10. @duglarri
    I think there is a common mistake being made in this article, as in a lot of analysis of Trump, in assuming that there is a Trump plan. Trump doesn't have a plan. He has no ideas. All he has are the incoherent meanderings of a ten-year-old.

    Trump is against everything. He is against international trade, international cooperation, the United Nations, military alliances (like NATO), and science in general. He's against arms control deals like those with Russia.

    Have we seen anything that he is actually for? He talks about trade deals, but what does a trade deal mean to him? His NAFTA proposals are typical: they are a gangster's demands, not a negotiation. "We will continue to be allowed to sell to your government, but you won't be able to sell to ours."

    Trump is simply breaking every institution, rule, and agreement that he encounters. He's blandly withdrawing the US from everything the US does internationally - and then equally blandly demanding that the rest of the world respect the US and follow its dictates.

    What his ten-year-old mind fails to see is the contradiction of his staggeringly incoherent "America First". If America is intent on withdrawing from the world- why should the world not carry on without it? What choice does the rest of the world have?

    Trump is breaking all these things because he is so incomparably stupid, that he has no idea what they are for.

    He's like a kid ripping the wires out under the floorboards of a jumbo jet. Don't need this. Don't like that. While the plane is in flight.

    The risk is- the virtual certainty is- that given time, he'll pull out something vital.

    And then: down goes the plane.

    The plane has been going down for years and Trump had nothing to do with that. As someone said above, the U.S. has been hollowed out and the good jobs were sent overseas. The only people who benefited were multinational corporations, and of course China. There truly was a “giant sucking sound”!

    Trump does have a plan; he is trying to undo this damage. Currently China freely exports her goods into the U.S., but trying to get American goods into China is very difficult. The U.S. multinational corporations have sold the U.S. out. They have handed U.S. technology to China on a silver platter, technology that U.S. taxpayers paid dearly for in terms of research. Talk about “incomparably stupid”! Had China tried to develop this technology on their own, it would have taken them decades to achieve – decades. And the only reason this was done is because it provided cheap labor for the multinationals and made them richer. The average U.S. citizen has not benefited from this arrangement at all.

    Your argument is way off.

    Read More
    • Replies: @Reg Cæsar

    but trying to get American goods into China is very difficult
     
    And pointless anyway. Most of them couldn't afford the stuff at our dollar stores. (Which they make!)

    It's like the old complaint that Japan wouldn't let our cars into their market. We wouldn't have sold any more with their borders open Hong Kong-style. Our compacts wouldn't sell here, let alone in a market with a dozen domestic competitors who understood their roads. For a while there, BMW outsold all US models combined in Japan.
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  11. @Robert Magill
    Trump is heir to the greediest, bloodiest, and in many ways, dumbest, regime of the modern era. What he intends, or even can, do to improve it remains to be seen. If the election had gone another way nothing would have been done to change this abyss we have launched ourselves into. What we will resemble after Trump depends largely on how he deals with China: the future power. China wants our markets, yes. Does China need our markets, maybe now it does; but in another decade, maybe not.
    China has pumped money, dwarfing our Marshall Plan by a factor of ten, all over the map including to it's enemies. Something we refused to do with our WWII allies to our eternal disgrace. Compare our record in hegemony with China's shorter but less bloody one and make your own New Years prediction of the future.
    www.robertmagill.wordpress.com

    China is grossly in debt. They’ve been buying up the world with their newly-printed monopoly money.

    Read More
    • Replies: @bluedog
    And so are we ,so what's your point,the only difference is that China's debt is internal while our is external which puts it a great dis-advantage seeing foreigners hold the debt...
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  12. China is grossly in debt. They’ve been buying up the world with their newly-printed monopoly money.

    They have also been buying up tons of the world’s supply of gold with their monopoly money. If the Yuan is backed by gold say hello to second world status for the US.

    Read More
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  13. bluedog says:
    @backwardsevolution
    China is grossly in debt. They've been buying up the world with their newly-printed monopoly money.

    And so are we ,so what’s your point,the only difference is that China’s debt is internal while our is external which puts it a great dis-advantage seeing foreigners hold the debt…

    Read More
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  14. David says:

    I was really moved by the line about the suffering of farm animals. It made me wonder why he didn’t also mention the price of tea in China.

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  15. anon • Disclaimer says:

    America has valid complaints about its trade relations with Canada. Even between Canadian provinces there are numerous trade barriers.

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  16. @backwardsevolution
    The plane has been going down for years and Trump had nothing to do with that. As someone said above, the U.S. has been hollowed out and the good jobs were sent overseas. The only people who benefited were multinational corporations, and of course China. There truly was a "giant sucking sound"!

    Trump does have a plan; he is trying to undo this damage. Currently China freely exports her goods into the U.S., but trying to get American goods into China is very difficult. The U.S. multinational corporations have sold the U.S. out. They have handed U.S. technology to China on a silver platter, technology that U.S. taxpayers paid dearly for in terms of research. Talk about "incomparably stupid"! Had China tried to develop this technology on their own, it would have taken them decades to achieve - decades. And the only reason this was done is because it provided cheap labor for the multinationals and made them richer. The average U.S. citizen has not benefited from this arrangement at all.

    Your argument is way off.

    but trying to get American goods into China is very difficult

    And pointless anyway. Most of them couldn’t afford the stuff at our dollar stores. (Which they make!)

    It’s like the old complaint that Japan wouldn’t let our cars into their market. We wouldn’t have sold any more with their borders open Hong Kong-style. Our compacts wouldn’t sell here, let alone in a market with a dozen domestic competitors who understood their roads. For a while there, BMW outsold all US models combined in Japan.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  17. “Trump has been on a rampage to undo almost every positive initiative undertaken by the Obama administration, even though many earned the US applause and respect around the civilized world.”

    America’s relative share of a growing world market is shrinking, so the author’s premise is flawed. America has further hobbled itself by things like Obamacare, which has turned a somewhat expensive but quasi market oriented system into an exhorbitantly expensive oligarchy that is sucking American wallets dry of resources that used to go to other market consumption. Other Obama initiatives like TTIP were designed to bludgeon the rest of the world into propping up the stumbling US hegemon rather than have it re-tool to be competitive.

    Trump is on the right track if you believe in actual competition and not hegemony disguised as ‘cooperation.’

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