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Trade Deals - Like Everything Else - Are Immutably Subject to Human Nature
Lions for Lambs
Commercial trade between people and peoples - is subject to what everything else on the planet is subject: human nature.
Much of what one should know about human nature - could have been learned in high school. Life - is high school on steroids.
Life has cliques - just as high school did: Jocks, geeks, nerds, spazs, etc. You may have different group names - but not different group types. And these personality types - channel people from the cradle all the way through life.
You’re born a certain way - and life will inexorably catch up and catch on.
They say politics is Hollywood for ugly people. But both Hollywood and DC are populated by representatives from all those high school groups - and they view the world through these respective prisms.
Look at perpetual lech Hollywood mogul Harvey Weinstein. Think that guy was dating cheerleaders in high school? Not a snowball’s chance in the warmest of all places.
So Lech Weinstein made a ton of money and accumulated a ton of power - and began abusing the heck out of it. Pervertedly enacting his revenge on the beautiful women of the world - who never before gave him the time of day.
James Lane Allen wisely noted: “Adversity does not build character, it reveals it.” I would say great wealth and power do the same. Which leads us to Lord Acton wisely noting: “Power tends to corrupt - and absolute power corrupts absolutely.” Weinstein got very powerful - and revealed himself to be very corrupt.
Trade deals - are deals between political people. People in many instances - who have risen to positions of tremendous power. You have Type A-Pluses - going head-to-head with Type A-Pluses.
They got there - by knowing how to push every available button to achieve every single advantage. They don’t give up an inch - unless and until they absolutely have to do so. And even when they do - they have usually set themselves up to gain a related foot elsewhere.
International trade negotiations between major nations - are clashes of titans. And the United States of America - the world’s largest economy by far, for decades - should have the gods themselves negotiating on its behalf.
We are the best - we should be represented by the best.
Except for decades, we’ve sent lambs to lay down for these lions. Deal after deal, year after year, decade after decade.
The resulting global market is - from a US perspective - an unmitigated disaster.
Which is what Type A-Plus-Plus now-President Donald Trump has been saying…for decades. During a much-ballyhooed 1988 appearance on “The Oprah Winfrey Show,” Trump said:
“I do get tired of seeing the country ripped off….I do get tired of seeing what’s happening….How we’re really making other people live like kings while we’re not….I think people are tired of seeing the United States ripped off.”
Asked by Winfrey about running for president, Trump demurred. But said if he did run "I can’t promise you everything - but I can tell you one thing. This country would make one hell of a lot of money - from those people that for twenty-five years have taken advantage. It wouldn’t be the way it’s been - believe me.”
That was thirty years ago. On trade - nothing changed in the intervening decades. If anything - it’s gotten worse. We kept making the same sorts of awful trade deals Trump was then decrying. Which only added loops and density to the Gordian knot - Trump is now attempting to cut.
What’s a Gordian knot?:
“(A) legend of Phrygian Gordium associated with Alexander the Great. It is often used as a metaphor for an intractable problem (disentangling an ‘impossible’ knot) solved easily by finding a loophole or thinking creatively (‘cutting the Gordian knot.’)”
Trump’s thinking can be deemed creative - simply because he is the first person in decades to actually identify the problem.
What have decades of bad trade deals contributed to our Gordian knot? Some lowlights:
China is stealing $600+ billion per year of our Intellectual Property (IP). This has gone on for years and years - about which the US has done nothing. This massive theft preempts actual trade deals for IP - you can’t sell what is stolen - and should be addressed in a trade context.
China imposed a 25% tariff on cars - ten times our 2.5% car tariff. (Until Trump shamed them into reducing it to 15%.)
Canada still imposes an inconceivable 270% tariff on dairy.
And thankfully, Trump has every aspect of the massive trade imbalances on his radar:
“‘Ultimately that’s what you want, you want tariff free, no barriers, and you want no subsides because you have some countries subsidizing industries and that’s not fair,’ Trump said. ‘So you go tariff free, you go barrier free, you go subsidy free.…’”
To what barriers does Trump refer? Again from Oprah ’88:
“We let Japan come in and dump everything right into our markets….They come over here, they sell their cars, their VCRs – and they knock the hell out of our companies….It’s not fair trade. If you ever go to Japan right now and try to sell something - forget about it, Oprah, just forget about it. It’s almost impossible. They don’t have laws against it - they just make it impossible.”
To what subsidies does Trump refer?:
“There are more than 100 countries that sell sugar on the global market. Brazil controls 41% of that entire market. Thailand controls almost 10%.
“Two countries - control half of a market of over one hundred participating countries.
By the way: The U.S….isn’t in the top fifteen. ‘Climate’ you say? We’re too chilly to produce enough sugar? Ummm…The Netherlands is #10. Yet another example of global government impediments to our exports.
“So how do Brazil and Thailand dominate the market? Government subsidies.
“Brazil’s government subsidizes its sugar…to the tune of more than $4 billion per year.
“Thailand’s government subsidizes its sugar…to the tune of nearly $2 billion per year.
“So Brazil can charge $4 billion per year less on the global market - and Thailand $2 billion per year less.
“And they dominate the market. Shocker.”
How does the world’s largest economy allow two comparatively-tiny nations - to poison the trade well to this massive a degree?
By not sending A-Plus personality types to negotiate for us.
By sending lambs to lay down - rather than lions to roar.
And the Type A-Pluses we’ve been facing - have been pressing for maximum advantages. Again, and again, and again, and….
Trump is currently attempting to cut the awful Gordion trade knot he’s been handed.
To finally rid us of the massive imbalances in tariffs, limits and subsidies to which we have been subjected.
But really - to which we have subjected ourselves. Because we’ve acted like it’s all we deserve.
Trump is attempting to heal all of these wounds - which have mostly been self-inflicted.
Trump should be given time and latitude - since he was about the only guy who for decades decried the Gordian knot at all.
This first appeared in Red State.