Do I have to do one of these every day? Apparently so. I should have known before I got started down this path.
I usually avoid commenting on published opinion pieces. That’s because opinion pieces are just that, somebody’s opinion. And this blog is titled Skeptical Analysis. That’s what I do here. I do analysis of stuff, and analyzing somebody’s opinion is sort of like slicing Jello. OK. Bad metaphor. But you get the idea.
The reason I’m commenting on this opinion piece is where it appeared. Yes, it’s from The Wall Street Journal. You know, The Wall Street Journal, currently under the protective wing of arch conservative Rupert Murdoch. That’s cool. Murdoch’s World is a safe place for a pro-business, anti-liberal news outlet. Which is what makes this piece interesting:
President Trump meets with Shinzo Abe on Friday, and one subject is sure to be trade. The Japanese Prime Minister may be too diplomatic to say it, but someone should tell Mr. Trump the damage that his trade policies are already doing to the rural and farm-state voters who put him in the White House.
Yes, President Trump, recently elected in broad conservative victories last November, is catching flak from possibly the most conservative print outlet in the country. So, what gives?
I’m guessing what happened is Donald Trump, the darling of the far right, is not viewed as a true conservative by America’s conservative base. American conservatives have a number of deeply-etched policies, including:
- Small government
- Fewer government restrictions on business
- A strong military
- Fiscal responsibility
- Low taxes
Add to that fewer restrictions on gun ownership, anti-abortion, promotion of Judeo-Christian religious teachings, and you have a winning strategy with conservative voters. The problem is, although Donald Trump mouthed all of these in his campaign, he added a bit of crazy not seen in American politics since Joseph McCarthy, over 60 years ago. For Trump, the Republican headwind was fierce. One by one conservative Republican candidates denounced him, save one, and one by one he demolished them. In November the crazies won, and now mainstream Republicans are frightened. Here is a President who, while spouting the party line, is lurching dangerously close to the brink of catastrophe. American business is going to be hurt.
What the WSJ piece says [there is no by-line, this is apparently from the WSJ editorial board] is that Donald Trump’s protectionist policies are bound to do something similar to what the American protectionist policies 90 years ago did. In those days trade dried up, factory output went unsold, workers were fired and could no longer purchase factory goods, factories closed in a cycle that culminated in the worst ever economic distress in this country’s history.
In this case the issue is not factory output, but farm products. The United States is a major agricultural exporter of food. The WSJ item provides a pair of graphics to illustrate.
First is a short list of farm exports. The table indicates 77.3% of American cotton production is exported, not consumed in this country. Add to that 71.9 % of the tree nut (especially walnuts and almonds), 52.4% of rice (eat your heart out, PRC), 50.6 of wheat, and more. Farm products are definitely a significant contribution to this country’s balance of trade.
So, whom do we not want to piss off? Who are the people gobbling up our farm products and who could possibly retaliate by doing their shopping elsewhere? The table shows Canada is our biggest customer. Hey, they are just beyond a border almost without bridges, and their short growing season is not amenable to many of the farm products they require. Next comes the PRC. This is the most populous nation on the planet, and they are unable to feed themselves. The PRC is a major exporters of manufactured products to the United States, and their agricultural imports, again, help ameliorate the current trade imbalance we have with them. And Mexico! Mexico, close behind Canada and the PRC, is a major customer, which Donald Trump’s planned policies will likely piss off to the tune of $17.7 billion a year.
The WSJ concludes, in the face of the Schlemiel-in-Chief’s wildest expectations, free-trade is a boon to American business.
The bigger political picture for the Trump White House is that U.S. agriculture is already struggling amid a strong dollar and declining export volumes. Net farm income dropped 15% to about $68 billion last year, the lowest since 2009, according to the Agriculture Department. Unless Mr. Trump wants to compensate with more taxpayer subsidies, the best way to boost incomes is to let farmers sell in more markets, not fewer.
One reason the U.S. benefits from free-trade deals is that America has among the lowest import barriers on earth (5% average for agriculture), so new agreements tear down levies abroad and open new markets. President Trump should consider that reality before escalating on trade—and betraying the Farm Belt voters who are relying on him to bring growth and opportunity.
Is Trump about to renegotiate NAFTA, even strangle it? Despite what many of his supporters have screamed for, and he has repeatedly promised, President Trump is likely to incur less than gentle opposition from a Congress that has to face angry voters every few months. Farmers, who rallied for Trump all last year, who joined in on shouts of “Lock Her Up!” may soon be shouting “Shut Him Down!”
The drama is not over. Keep reading.