BY FROMA HARROP
Nuclear threats by North Korea frighten us and terrify South Koreans, who could suffer devastating losses in a conflict. But Donald Trump apparently sees the crisis as an occasion to threaten South Korea’s economy, as well as its leadership’s manhood.
First he accused South Korea of “appeasement” for wanting to negotiate with North Korea. Then he talked of ditching America’s free trade agreement with the country.
By the way, Trump campaigned on his willingness to talk to North Korea’s bizarre leader. He called Kim Jong Un “a pretty smart cookie” and said he’d be “honored” to meet him.
As for trade with South Korea, the U.S. has a $28 billion trade deficit on goods but an $11 billion surplus on services. South Korea is also a major market for many U.S. ranchers, farmers and manufacturers.
Reportedly, none of the president’s advisers involved in Korean policy wanted to drag trade into this volatile situation.
As for South Koreans, they worry that Trump is “kind of nuts,” according to a former State Department expert on the region.
Blustering about a trade war with a key ally in a dangerous confrontation is insane. What’s it about? It could reflect a sadistic impulse to exact pain when people are down. It could be an exercise in “base” cultivation, stoking the uninformed belief that free trade is a kind of foreign aid, a one-way street benefiting foreigners at the expense of Americans. It could be he has no idea what he’s doing.
Whatever. Many factors fuel trade deficits. They do not equal “losing.”
About 60% of America’s imports are for intermediate goods. These are things that go into final Made-in-USA products. For example, shared auto production with Mexico lowers the finished U.S. vehicle’s price. This helps higher-skilled U.S. workers compete globally.
Rather than coolly renegotiate the North American Free Trade Agreement to America’s advantage, Trump is making this country look ridiculous and weak. It’s Canada that is demanding higher labor and environmental standards. That would include stopping a member from cutting its commitment to address climate change to attract investment. [Who could that be?]
Mexico has joined Canada in standing firm against an American proposal to set a minimum amount of U.S. content to qualify for tariff-free access. And Mexico says it’s ready to walk out on the talks.
Incoherence reigns. Former U.S. Trade Representative Robert Zoellick notes that in its NAFTA negotiations, the Trump Administration is “pressing for provisions from the TPP that Mr. Trump denounced.”
The Trans-Pacific Partnership was created to help its 12 members better compete with China. You’d never have known this from the simple-minded populism, both left and right, that turned TPP into the enemy of the American worker. The thinking went: TPP has something to do with Asia. China is in Asia. Chinese imports are putting American factories out of business.
But China was not a member. TPP would have let America write the trade rules. Trump took this country out of TPP, and now China is writing the rules – and other countries are making their own deals.
No trade accord is perfect. Even the best ones hurt some domestic workers. The remedy for them is to secure the social safety net, especially guaranteeing health coverage, and retraining.
And what is the remedy for Trump’s unhinged trade policies? Go around them.
The U.S. Constitution places most authority over trade with Congress. The Republican Congress’ failure to accomplish much of anything thus far does not instill confidence in its ability to handle thorny trade issues.
But at the very least, lawmakers could, in Zoellick’s words, “block Mr. Trump’s crackup.” They should know that tweets don’t kill.
– Froma Harrop’s columns appear regularly in The Oklahoma Observer