Mr. Trump’s Faux National Security-based Trade Policy (aka ZTE – WTF?)

or, Mr. Trump is a wimp

Mr. Trump was the first in decades to actually implement Section 232 trade sanctions based on alleged national security concerns. These sanctions hit our allies much harder than the Chinese that Mr. Trump asserts has damaged our interests. And yet, when sanctions based on real national security concerns actually threaten to substantively punish a Chinese firm, he flinches.

Why do we need a process (CFIUS, Section 232) if Mr. Trump is just going to rip up the decisions?

Thus far, the trade policies Mr. Trump has implemented have served to degrade — rather than enhance — our national security. Wavering on punishment for ZTE’s violations of previous sanctions and agreements will only further that degradation.

103 thoughts on “Mr. Trump’s Faux National Security-based Trade Policy (aka ZTE – WTF?)”

  1. Moses Herzog

    My strong wager (educated guess) is Prof Chinn had put up with a lot of gunk in his life or “ungarnered flak” or unwarrented cheap shots in his life about being biased to Chinese interests (probably more as a grade school child than anything). Also on this blog in the past, and no doubt on this blog in the future Menzie will have to tolerate loads of it. And yet, when it comes to standing up for American interests as the true “card carrying” American Menzie is, Menzie stands more strong and unyielding than our nation’s current inhabiter of the White House. ZTE is a legit issue to take a stand on, and if nothing else, it could be used as a leverage tool for China’s hacking of America’s intellectual property. And yet what would Trump rather do??? Hurt our friends in Canada, Germany, Japan and elsewhere who have stood together with us over decades. Trump is a sick, deranged individual, an “extreme” narcissist (that may be redundant but the VSG takes narcissism to a whole new level). If this country, America, (slowly becoming more unrecognizable AS “America”) was a mentally healthy place, with a well-read citizenry, it would be people like Donald J. Trump taken off to internment camps and detention centers, not people who actually care about their families and their country.

    1. Moses Herzog

      I would also like to add as an addendum to my above comment, that American Chinese take “friendly fire” and catch severe broadsides on both sides, and it is largely a “no win” situation for American Chinese. As when showing inequities and irrationalities in the international trade situation they are painted as “un-American” and when taking a stand for America on ZTE as Menzie does, he is surely gonna take “artillery fire” from the Chinese contingent. Weathering that, makes Menzie and many American Chinese MORE American than Donald J. Trump will EVER be.

  2. PeakTrader

    It’s a complex carrot-stick/reciprocal/power strategy, which has been very successful, and confused or made talking heads look like fools.

    1. Moses Herzog

      @ PeakIgnorance
      A person gets the distinct impression that after all the false swagger and big talk Trump has done, that if a summit between State Chairman Xi and the "VSG" Trump were held in DC, and Trump walked to center stage between the two podiums, yanked down his trousers to reveal he was wearing fluorescent pink thong panties and stated "I wore these for Chairman Xi tonight" that PeakIgnorance would tell us it was "all part of Trump's psychological chess game which will soon bring the Chinese Politburo to its knees".

    3. pgl

      Actually the strategy was for Xi to say something nice about Trump – which gave Xi exactly what he wanted. Trump is worse than a wimp – he is complete fool. Sort of like you!

    4. sherparick

      Yes, the XI and Kim having definitely made Trump idolators look like fools. As for Trump, I expect a deposit cleared on his Seychelles account.

      1. randomworker

        @Sherparick – word is its $500 million. To a Trump property in development.

  3. Ed Hanson

    Menzie

    You can react anyway you want, but your shooting from the hip has lead to imminent Rosenstein firing, Blankenship winning the primary, now this. It is just a tweet Menzie, and it a part of the style of President Trump of which you have absolutely no understanding, but then again, few do. Let the man be President, his results have been reasonably good, and certainly much better than you imagined. Blog space may be cheap, but Rosenstein, Blankenship and now this is a waste of computer screen.

    1. Menzie Chinn Post author

      Ed Hanson: I take Mr. Trump’s tweets very seriously. Recall this campaign “Statement on Preventing Muslim Immigration”? It was promoted on this tweet. You may be content to have Muslims targeted, and non-US citizen Muslims removed from the country as hateful enemies of the Nation, but I think this was not in the American spirit. I also take his verbal statements (e.g., there were fine people protesting in favor of white supremacy at Charlottesville) at face value as well. You should too.

      1. Ed Hanson

        Menzie

        Of course, take the tweets seriously, they are used for purpose, but you just do not understand nor care to figure what they seriously mean and do. If you ever care to pull back from your exaggerations, I’ll give you a hint, they have nothing to do with white supremacy.

        Take a pill, Menzie, Trump Dilution Syndrome is bad for your health. On this fine day, remember your Mother, and enjoy the life she made possible.

        Ed

        1. pgl

          “you just do not understand nor care to figure what they seriously mean and do.’

          Even Trump does not understand what his tweets mean but you do? OK – then please mansplain to us what his gibberish means.

        2. CoRev

          LIKE

          How much more successful is Trump vs Obama or could have been Hillary? If the measure is promises made and promises kept, then far more so! Get over it!

          I think on Fox News Sunday Pompeo almost gave away the next success story, N. Korea denuclearization. What will happen if that is even marginally successful? Next target? MidEast peace? Global Warming stopped? Us-Russia détente? Adding 8 more years without recession? …(your guess here because you folks have been almost universally wrong)?

          See you in November.

          1. pgl

            Marginally successful denuclearization? WTF? So rocket man gives up one nuke and keeps the rest. You Trumpians are the most gullible peple ever.

          2. CoRev

            Pgl, in trying to be conservative in outlook, I used “marginally successful”. But if you want to use wildly successful, I’m more than happy to agree. Yes, that is what I think Pompeo almost admitted was in the works. We’ll wait and see.

            See you in November.

          3. JBH

            Peace between the Koreas. Unification of the Koreas. Startling economic boom in the North. Like East Germany. Nobel Peace Prize for someone. Wonder who.

  4. 2slugbaits

    Back when Trump was first elected many of us jokingly referred to him as the “Manchurian Candidate” or the “Muscovite Candidate” or the “Siberian Candidate”, etc. It seemed kind of preposterous at the time, but now I’m not so sure that Trump isn’t one of those caricatures. We might have to take seriously the possibility that he just may very well be a Russian mole. It’s not like the Russians haven’t done similar things with other countries, so why should we see ourselves as immune? All this reminds me of something that GEN Wesley Clark (somewhat casually) said on one of those Sunday gabfests over the summer of 2016 before Trump was elected. He mentioned that he was hearing some hushed talk among very high ranking military officers about the angst they were feeling if it turned out that Trump was actually a Russian mole. Some of them were agonizing over the possibility that they’d have to choose between competing loyalties; i.e., the principal of lawful orders issued by civilian control versus their oaths to defend the country against all enemies, foreign and domestic, and the requirement to disobey unlawful orders. If you listened closely to senior military officers you would hear deep concerns over what they should do if Trump abandoned Article 5 under NATO, as he hinted at during the campaign. Two different movies were playing inside the heads of some military brass: “The Manchurian Candidate” alongside “Seven Days in May.”

    1. ilsm

      2Slugs…. the concept of ‘lawful’……. if the generals have not stood up against bombing [based on allegations and two cylinders seen in Douma weeks before the false flag] for Jaish al Islam and the rest of the siding with al Qaeda crazy since 2006, how do you think they would sell to the American people a coup over dropping useless NATO?

      The most dangerous [to the US constitution] concept I see is the feathered princes running the pentagon trough trying to perpetrate in the US what they support the Saudis in Syria!

      US generals with more moral compass than the paymasters, indeed!

    1. pgl

      No we do get Trump – he is that “evil dictator”. But since you kiss his royal rear end, I’m sure your life will be spared. Court jesters often do well.

  6. Not Trampis

    Trump is profoundly ignorant. This was easily understood when he was a candidate.
    Now he is President and gaining advice from people who have expertise he regularly ignores ignores is quite worrying.
    What is not surprising given his level of ignorance is some of his views like on trade is quite left wing. Why some ‘conservatives ‘ support this man is beyond belief.
    What is even more worrying is that apart from Mattis there appears no adults in cabinet not in advisory roles.

    1. PeakTrader

      Many people are ignorant of Trump.

      And, they’ve been much more wrong than Trump.

      Moreover, Trump, has no government experience, e.g. compared to the Clintons or the Bushs, and it’ll take longer to form the team he wants.

      Reagan was called just an actor and totally misjudged by many too.

    2. Moses Herzog

      “Some conservatives”?? He ran on the Republican ticket. Man I wanted to cut you some slack because I thought you were a moderate. How does Menzie attract so many low IQ people here?? It boggles the mind.

  7. Ed Hanson

    Menzie

    Perhaps you would indulge in an informational topic to continue the previous topic “Over 1100 Economists, 15 Nobel Laureates and Republican and Democratic CEA Members Agree.” by making the transcript of the following text available.

    https://www.economistsfortrump.com/

    ed

      1. CoRev

        Menzie, ” Do wonder why nearly one-quarter of the signatories are “emeritus”.” Mebbe because, experience and wisdom gained from age makes a difference in their world views.

        1. pgl

          Weak. The people who signed this really stupid letter will sign anything for Team Republican. Did you bother to read the letter? If you did – you would realize how dumb it is. Oh wait – I’m assuming a reader with an IQ above the teens without having the courtesy of asking what is your IQ.

    2. PeakTrader

      Ed, you know the economists jokes: “For every economist there exists an equal and opposite economist.” Afterall, “Economics is the only field in which two people can share a Nobel Prize for saying the complete opposite.”

      1. pgl

        You would say economics is a joke. But then the rest of us are laughing at you not with you!

    3. 2slugbaits

      Ed Hanson Did you read the text? I have my doubts. The text doesn’t really stand in literal opposition to what the 1100 economists were saying. The 1100 economists were specifically talking about Trump’s tariff. The letter you referenced simply says that everyone would be better off if China relaxed its tariff. I don’t think anyone disputes that. The problem is that’s not the issue the 1100 economists were worried about; they were referring to Trump’s tariffs, not China’s. In fact, a lot economists could probably have signed both letters. Here’s the quote from the letter concerning international trade:

      We believe that reciprocal free trade with lower trade barriers on all sides produces higher overall economic growth and hope that the President’s efforts to negotiate better trade deals, including willingness to re-enter the Trans Pacific Partnership (TPP), will bring about a stronger long-run free trade equilibrium by reducing trade barriers and opening markets that were previously closed to American businesses.

      Who disagrees with that? Reciprocal free trade on all sides produces higher overall economic growth. Duh! Of course, that’s not what Trump’s tariff is. Trump’s tariff puts up a new barrier! And who disagrees with the statement that Trump’s “willingness” to re-enter TPP is a good thing? Nowhere in the letter does it specifically address Trump’s proposed tariff even though it tries to present itself as an alternative to the letter signed by the 1100 economists. It’s a kind of kabuki theater. A letter is crafted in such a way that it is superficially innocent and something that many economists could swallow, but yet is presented as support for Trump’s tariff. If the author’s letter had been honest, then the letter would have explicitly addressed the economics of Trump’s proposed trade tariff. The problem is that Team Trump would have had difficulty finding 10 economists to sign it, never mind 100.

    5. pgl

      Brad’s post can be found here:

      http://www.bradford-delong.com/2018/05/100-economists-this-moronic-and-this-easily-grifted.html

      My comment was:

      This list is the Usual Suspects that would sign anything Republican. Most are not exactly household names with the exception of course being Donald Luskin, Art Laffer, and John Lott. The line that left me on the floor?

      We believe that reciprocal free trade with lower trade barriers on all sides produces higher overall economic growth and hope that the President’s efforts to negotiate better trade deals, including willingness to re-enter the Trans Pacific Partnership (TPP), will bring about a stronger long-run free trade equilibrium by reducing trade barriers and opening markets that were previously closed to American businesses.

      Seriously? They think Trump is a free trader????

      1. dilbert dogbert

        I looked at the list too. I looked for Mary Rosh but her name was not on the list. SAD!

    6. pgl

      The Who We Are part sounds very dishonest to me:

      “We are a grassroots independent group of economists, largely academic, who broadly endorse President Trump’s economic policy agenda. This letter was organized by economists/signatories with no involvement from outside groups/lobbyists unlike several other recent economist letters.”

      OK – a few of the usual suspects here are not even economists. And grassroots? Is that what they ate for breakfast. The usual suspects are certainly not independent. And I want an audit of all 100 to see how many are associated with “outside groups/lobbyists”. Give me a break!

  8. Benlu

    According to China’s news report, the alleged violation by ZTE of earlier settlement agreement(btw ZTE and US) on ZTE’s previous violation of US’s trade sanctions against Iran was concerning implementing that part of the settlement agreement that required canceling payments of bonuses and incentives to some 40 plus ZTE executives. According to ZTE explanation, the company made the mistake of paying the bonuses and incentives but ZTE soon after realized the mistake and took corrective measures and voluntarily informed the US authority of the mistake which US jumped on this opportunity to slap a devastating 7 year ban on ZTE. Trump and team now apparently accepted China’s representation and evidence that such unintentional mistake did not warrant the overkill 7 year ban on ZTE. My guess is that China probably showed some cards on how they intend to hit back with equivalent measures at US corporations if US were to continue ZTE ban.

    1. Steven Kopits

      Is ZTE a threat? If so, it should be banned. If not, the why was it banned to begin with?

      See my comment below.

    2. Steven Kopits

      I see no reason ZTE should be banned for selling equipment to NK and Iran. Fined, maybe.

      On the other hand, if it is a national security risk, then it should be banned. (Bear in mind that US telecoms manufacturers may be considered a security risk in China.)

      Again, though, it highlights the downsides of the claim on the SCS. If China merely leases bases and acknowledges internationally agreed territorial rights, then the ZTE problem is largely diffused. Is China a threat? The SCS says it is, ergo ZTE is also a threat.

      As I have stated before, now for several years, China has to choose between being an aggressive power or a commercial power. It is an expensive proposition to threaten your key customers.

        1. Steven Kopits

          Yes, I saw that, Menzie. But I saw the sanctions justified as resulting from ZTE sales to Iran and North Korea. I wouldn’t destroy a notable Chinese company over that. The point is not to turn China or the Chinese into our enemies. The point is to channel China towards behaviors which the Chinese themselves ultimately appreciate as just and reasonable. We’re are (or more precisely I am) not trying to create walls between the US and China, but rather to integrate China into a well-run, legitimate system of global trade and international relations.

          1. Moses Herzog

            @ “Princeton Boy” Kopits
            Now that a Republican is in the White House, the policy prescription you recommend is a schizophrenic version of handholding and babysitting for the Chinese. Fascinating, to say the least. No wonder you think Xi Jinping is offering unconditional surrender to the Chinese countryside peasants. Steven “Princeton Boy” Kopits, what did you get your 4-year bachelor’s degree in?? I need some comedy today, so I’m dying to know.

        2. Benlu

          I wonder what China thinks about windows, Apple softwares, Cisco routers that are all over China.

    3. Steven Kopits

      Btw, China is facing huge Iran-related risks coming out of the Middle East. Keep in mind, an oil shock with the US as a near net oil exporter is a whole different animal than one where the US imported 60% of its consumption. China now has two aircraft carriers in service. Are they serving China’s legitimate needs to protect its oil imports? Or are they threatening the neighbors? It is very easy to confuse those two motivations, and the results could be tragic.

      Our outlook for oil prices can be found at the link below. I think we can now see an oil shock on the horizon, although its size and timing are yet uncertain.

      http://www.prienga.com/blog/2018/5/14/oil-consumption-as-a-percent-of-world-gdp

      1. Ed Hanson

        Steven

        I’ll leave this comment here rather than at your site. Your chart line oil/GDP gives great information. That information would be enhanced with a world GDP Growth line by giving perspective. It may verge on TMI but recession periods if applicable to the world would help the casual observer. Good Stuff.

        Ed

        1. Steven Kopits

          Thanks, Ed.

          The next oil shock is likely to be different than any since 1973. This time around, the US is likely to be a net oil exporter. Thus, high oil prices will not be offset by a weakening currency; indeed, high oil prices will tend to strengthen the trade balance.

          This will put extraordinary pressure on the coasts, I think (certainly the east coast), where governments are already struggling with poor fiscal management (NJ, CT) and the loss of federal tax deductibility.

          2. Steven Kopits

            Islm –

            You want line 46 tab4a of the STEO, “Total Petroleum and Other Liquids Net Imports”
            https://www.eia.gov/outlooks/steo/

            For 2018 E, net imports come in at 2.6 mbpd
            2019 F is 1.5 mbpd

            By 2020 or 2021, the US should be a net exporter on current trends. Our oil shock forecast is set for 2021 at this point, but the range is still +/- two years on that, depending on contingent events.

  9. Steven Kopits

    The risk to a strategy of ‘shaking things up’ is that it exponentially increases the degrees of freedom in policy, and therefore the processing power necessary to cope with a vastly increased number of alternative outcomes. Moving the embassy to Jerusalem complicates the relationship with the Arab world even as the US has left the Iran treaty and is thereby threatening European countries who fail to conform to US expectations, even though some of these countries face steel tariffs. This easily results in unchecked chaos, or a growing gap between rhetoric and action, such that formal pronouncements are increasingly discounted by friend and foe alike, or both.

    I am all for shaking things up, but prioritizing in the picking of fights is necessary to prevent events from spinning out of control.

    1. dilbert dogbert

      I am also in favor of shaking things up. Just so long as I get to decide what to “shake up”. Money in politics would be where I would start.

      1. Steven Kopits

        There is not enough money in politics. Or more precisely, not enough of your money. You’ve given US politicians $4 trillion to play with every year. How are you paying them? What is their interest? Is it aligned with yours? Are you paying them to do what you want?

        Politicians are not your mommy and daddy. They are your employees, and they will act as they are paid.

        1. dilbert dogbert

          If I had the money to throw at politicians like the Koch Bros, they would be my employees and they would do my bidding. If I liquidated all my assets and gave it to politicians, all I would get in return is letters, emails and phone calls asking for more.

          1. Steven Kopits

            You could own the politicians for a payment of $10 / year. Is that a worthwhile investment, from your perspective?

          1. Steven Kopits

            I am saying that if you want politicians to work for you, you have to

            1. Tell them what you want
            2. Make sure they have the capabilities and authorizations to do what you want
            2. Pay them for doing what you want.

            I am suggesting that if voters are not willing to recognize the value of politicians and pay them accordingly for achieving desired results, then they will be hijacked by people with distinct objectives with cash to throw around.

    2. Ed Hanson

      Steven

      No. the gap between rhetoric and action is shrinking not growing. 20 some years of promises by Presidents with words to move the embassy without action meant growing. An Iran treaty which guaranteed nuclear weapons meant a growing gap between action and words of peace. Withdrawal from the treaty is action and fulfillment of promise, not mere words and less gap. The Korean situation meant nothing but on and off again sanctions followed by payoffs to NK for years. Action closed that gap. The NAFTA renegotiations was the fulfillment of the words of promise. The meaningful and engaged negotiations between the three partners is action, less gap. The tax act reform was fulfillment of the words of promise, action that meant less gap.

      All the above to me says the expectation that international trade and tariff talks is likely to be action not just words. But the world is full of politicians who live by words and shy from action. President Trump is shaking them to the core. So we will see.

      Ed

          1. Steven Kopits

            I agree that conservatism has become associated with a kind of casual cruelty. But the Trump administration has no monopoly on this.

            Economists are even more implicated in their casual disregard for the suffering associated with illegal immigration. To wit, this year we expect 1.1 million attempts across the southwest US border, of which

            – 2,000 – 3,000 will die in the attempt in the desert or Mexican interior
            – 164,000 women and girls will be raped
            – 30,000 migrants will be kidnapped and extorted
            – 200,000 will be robbed
            – 22,000 will be trafficked into forced prostitution or labor
            – 45.000 will be coerced into smuggling drugs (to pay for coyote fees)
            – 100,000 will be incarcerated for an extended period (montha to years)
            – 120,000 will turn around, losing the time and about six months’ wages and suffering a good bit of trauma

            In all, about two-thirds of such migrants will suffer an event which you or I would consider traumatic.

            We can estimate 90% of this is directly attributable to US immigration policy. That is, were we to transition to a commercial system, such predation would drop by 90%. And we know that because we are speaking principally of a black market: Migrants come primarily to arbitrage wage levels, which are $2.50 / hr in Mexico and $10 / hour in the US; thus, US immigration policy has created a black market. Black markets are resolved through legalization and taxation. The associated predation declines typically by 95%, which we know from, say, Prohibition and Repeal. Indeed, marijuana legalization — even as spotty and partial as it is — has reduced drug smuggling across the Mexican border by 84% since 2009. We know all about black markets and how to resolve them.

            I have known all this (except the scale of the pathology) for twenty five years. But I am left baffled: Where is the economics community on this? I have not found a single economist who has argued to legalize and tax, even this is the straight-forward, simple and proven formula for dealing with black markets.

            To what do we attribute the casual cruelty of the economics community? Where is their voice demanding change? Indeed, where is the discussion of the topic at all? I am dumbfounded to the indifference of the economics community — virtually all of whom should know better — to the largest on-going humanitarian crisis in the western hemisphere.

            Right now, you are not standing on the high ground. If you want to speak up, speak up, but don’t lecture when you are complicit in all this. You know how to recognize a black market, just as I do. And you know how to fix one, as do I. And you probably know that black markets bring all sorts of pathology. So you know. Just like I do.

            And as for Trump, with all his problems, he is still our best hope for immigration reform. He actually wants to change something, and the guy understands pay-to-play, which is what legalize-and-tax actually means. That’s why I am dealing with it. Had Hillary or Jeb won, I never would have touched it. But with Trump — with all his limitations — we have a shot.

            So, I encourage you to speak up. Make a difference.

          2. Ed Hanson

            Steven

            I do not accept simplistic claims as the caused of the tragic events of Gaza. No where do you give credit for the disregard of lives left in refugee camps more than 70 years, during which the Arab countries never gave refuge nor resettlement. No where do you give credit for to the fanaticism of the leadership nor the militia and terrorist that, if they could overrun Israel, would make 52 dead look like a Sunday rear ender on the freeway. Do you really think the fanatics want a two state solution? Do you think that Israel is in any manner acceptable to them? Finally, I will let you guess how many of the Hamas higher ups are among the dead. Hint – none, zero, nada. I am sorry that the leadership has intentionally kept any possible economic growth or mobility from those they rule, but they know to have hopeless youths to provide fodder for their evil ways.

            So to answer you, yes it is worth it. Not because of the riot and death, but because the embassy move was just another excuse, not a reason. Where the embassy is situated is Israeli territory. Can not you see that by creating the riot, the fanatical leadership is saying nowhere is Israel, not just where the embassy is now? There is no answer to the problems surrounding Israel, until those who glory in their power and wealth quit using the Arab youth for their own purposes cynically and with little regard.. It is not going to be either the US nor Israel that will make that change. It must come from the other side. Until then, it would be absolutely stupid, as well as counterproductive to tiptoe around the fanaticism.

            Ed

          4. Ed Hanson

            Menzie

            Do I have sympathy for the poor men kept hopeless by those who continue to have power over them, yes. Do I have the sympathy and regard that you show for the tyrannical rulers of Gaza that you exhibit, no. Those rulers know that by sacrificing the innocent, they actually garner support from the likes of you. So I guess because all those who died a horrible death of starvation because others had control of them, you think the best of Stalin.

            As you said Menzie. but this is from me, “I expected nothing less than that view from you.”

          5. CoRev

            Steven, I agree and am appalled by your statement:
            “I agree that conservatism has become associated with a kind of casual cruelty… (appalled because history shows otherwise)

            Economists are even more implicated in their casual disregard for the suffering associated with illegal immigration (agree liberal economists even more implicated and not only for illegal immigration)”

          6. Steven Kopits

            CoRev –

            Re: Casual cruelty

            Fascism, and much of what passes for conservatism is really fascism today, is cruel by its nature.

            Conservatism: “No shoes, no shirt, no service”
            Fascism: “No Mexicans”

            So, with the Mexicans, we are trying to convert a fascist problem into a conservative problem and upgrade the ability of Mexicans to meet conservative requirements. Turns out, it’s actually not that hard. I have to finish a theoretical piece on this, but I’ll have it at some point.

            As for Menzie: Deer in the headlights. Doesn’t know how to respond. He can see the numbers. He knows if I published them I probably did pretty workman-like research. So the numbers are probably right, at least two the order of magnitude. Menzie knows what a black market is, and he knows how we solve them.

            But he can’t grapple with the issue. Absolutely stuck, because standing up for Mexicans takes courage. He has to put some credibility on the line. So, really strangely, Menzie is more willing to see thousands of Mexicans die and suffer unspeakable victimization than to speak up and say, “Well, actually, we economists have a view on this matter.”

            Now, he’s not alone. I am not picking on Menzie because he is somehow unique. He’s just like the rest of the economics community. That doesn’t stop bad things from happening, though.

          7. Menzie Chinn Post author

            Steven Kopits: I haven’t responded because I haven’t read your pieces. I’ve got other things to do at the moment (like grading papers).

          8. Steven Kopits

            You can read my recent work here. https://www.princetonpolicy.com/ppa-blog/

            Illegal immigration as a black market here: https://www.princetonpolicy.com/illegalimmigration/

            The cost to migrants and undocumented workers
            https://www.princetonpolicy.com/migrant-perspective/
            https://www.princetonpolicy.com/migrant-economics/

            The market based visa concept is here: https://www.princetonpolicy.com/market-based-visas/

            I welcome your engagement on this issue. It is an important matter, eminently amenable to policy solutions, and worthy of your support.

          9. CoRev

            Steven, I think you are being way too general in this statement: “Fascism, and much of what passes for conservatism is really fascism today, is cruel by its nature.”

            American conservatives are decidedly different than fascists. Instead of your Mexican subject American conservatives believe in individual rights versus the government dictates of American liberals. Examples? The differences in positions, on speech, religion, guns, and borders (immigration).

            So I can not agree with your view and surely not your examples.

          10. Menzie Chinn Post author

            CoRev: Hmm. Until Mr. Trump disavows those “fine people” who carried torches in the night chanting “blood and soil”, I’m going to be skeptical that American conservatism is not now largely exactly what Steven characterized it as.

          11. CoRev

            Menzie, disavows??? https://www.cnn.com/2016/03/03/politics/donald-trump-disavows-david-duke-kkk/index.html
            Maybe an even handed disavowal understanding is needed. https://www.washingtonpost.com/opinions/obamas-risky-embrace-of-occupy-wall-street/2011/10/19/gIQA2pQf1L_story.html?noredirect=on&utm_term=.868dd5399aa6
            Or maybe democratic disavowal of antifa, Black Lives Matter, occupy Wall Street and the many other Soros funded groups is needed? Haven’t seen it yet.

          12. Menzie Chinn Post author

            CoRev: Nice try, but I’m looking for a disavowal of the “very fine people” on both sides comment, at Charlottesville. Not disavowal of David Duke and KKK.

            Truly, give it up. The documentation that Mr. Trump is a racist is so comprehensive as to be overwhelming.

          13. Steven Kopits

            CoRev –

            Let me finish my conservatism v fascism piece, and then we’ll have a framework of analysis to discuss.

          14. CoRev

            Menzie, as usual you ignored the report or move the goal posts. He did disavow your specific phrase:
            ” Trump excused anyone marching in Charlottesville who were not neo-Nazis or white supremacists. “Those people were also there, because they wanted to protest the taking down of a statue Robert E. Lee,” he said. “Many of those people were there to protest the taking down of the statue of Robert E. Lee. So this week, it’s Robert E. Lee, I noticed that Stonewall Jackson’s coming down. I wonder, is it George Washington next week? And is it Thomas Jefferson the week after. You know, you really do have to ask yourself, where does it stop?”

            He offered that there were “very fine people on both sides” of the protests Saturday and insisted not everyone marching alongside the swastika banners and chanting anti-Semitic and white separatist chants was bad.”
            We already know that it will be insufficient for your sensibilities. ” You know, you really do have to ask yourself, where does it stop?” Only after he is gone, then if a democrat is elected, Trump will be blamed for everything. We already have a history of that with Bush.

            Steven K OK, let me know when it is finished. We have different backgrounds and may be of different eras, so it should be interesting to review.

          15. Menzie Chinn Post author

            CoRev: As usual, I don’t see a direct quote from Mr. Trump himself saying something to the effect “*I* disavow my previous remark about “fine people” on both sides…”

            You are seriously trying to foist upon us the point that Mr. Trump is *not* racist? Really, give it up.

        2. ilsm

          Gaza/West Bank,

          If the perpetrators were Alawite, or Shi’a there would be stand off bombings, coordinated with Russia, drone atackss and regime change planning………

          Why I refuse to pay for “news” from anyone with a pay wall including Bloomberg.

        3. CoRev

          Menzie, I almost fell off my chair laughing with you using the Clinton “the meaning of I(s)” defense. Why would you use the racist argument? Used so often it loses its meaning, and appears to be a last ditch argument?

  10. Steven Kopits

    I think we should be talking about Argentina, if only to reprise the on-going pathology of that country.

  11. Steven Kopits

    We should also be talking about Italy, and whether populism is merely the final stage of a democracy’s collapse.

    1. pgl

      The deal of course is for Trump’s cronies and rocket man’s cronies to make tons of money are U.S. foreign direct investment in the North Korean economy. The swamp was not drained – it got a lot deeper and has moved into the North Korean economy.

      1. Steven Kopits

        That would actually be huge progress, pgl. A North Korea taking in investment and doing business, corrupt or not, would be big progress.

        1. pgl

          I see -more of our New York City funded diverted from fixing our subways so Trump’s friends can make money in another Communist nation. I do not call that progress.

          1. Steven Kopits

            Interestingly, I have tried some local lobbying to see if we could bring the 7 line from Grand Central all the way out to Secaucus and possibly the Meadowlands shopping complex, as an alternative to constructing two new tunnels to 34th St Penn Station.

            Penn Station does not really permit NJ commuters to access the east side Manhattan job market, as the cross town commute is both awkward and time consuming from 34th St. (ie, one stop up to 42nd St and then walking or the S shuttle to Grand Central). The 7 line to Secaucus would bring allow NJ commuters access to Grand Central with only 5 stops (Union City [new], Port Authority [new?], Times Square, Fifth Avenue, Grand Central).

            The Meadowlands shopping complex has gone through some three rounds of bankruptcy and is currently under construction. This mall, save for Met Life Stadium (Jets, Giants), sits largely alone in the Meadowlands. It has no natural constituency, and its failure looks highly probable in the current retail environment.

            Were the 7 line brought out to the Meadowlands, it could serve as part of the New York retail and residential market. One could imagine 10,000 condos or apartments there, only six stops from Grand Central. The vast parking capacity of the facility could also be used for car commuters parking there and taking the 7 to NY on weekdays. (Going to NY from NJ has become an expensive exercise: By train, $6 parking + $30 RT + $6 subway = $42 RT / person. Take the family, and you are comfortably $100 just to access Manhattan, much less do anything there. By car: $13 NJ Twp, $15 tunnel toll; $40 parking; $10 gas, so almost $80 just to pack the kids in the car and take them to Manhattan, before doing anything. With the 7 line: $8 gas, $12 NJ toll, $20 parking, $6 subway ticket RT, so for a family of four: $60 anywhere in Manhattan, without the torture of the Lincoln Tunnel.)

            One could also relocate some of the Port Authority Bus Terminal functions to the Meadowlands complex, thereby helping insure a constituency for the complex and taking pressure of an overloaded 42nd St terminal and the Lincoln Tunnel.

            https://en.wikipedia.org/wiki/American_Dream_Meadowlands

        2. noneconomist

          What are the chances of Nike opening a factory there? Hey, NK third graders! Get your resumes ready. You may have jobs soon.

          1. pgl

            Nike does not own factories. All production outsourced to 3rd party vendors. So if North Korea wants to set up shoe factories, Nike will provide the designs for the right price. But remember all profits accrue to tax free Bermuda.

          2. noneconomist

            We can expect minimum age for full time employment to be established … at 10? With benefits, of course.

      2. dilbert dogbert

        I think NK will get most investments from China. The US is too undependable.

        1. pgl

          China is doing a lot more foreign direct investment right now than anyone else. Gotta to use their savings somehow!

  13. Bruce Hall

    SMH. The thread of comments never really addresses Menzie’s point about Trump flinching on a national security issue. Regardless, I sought some perspectives outside of the comment thread and came across a reasonable postulation here: http://www.businessinsider.com/trump-china-zte-reverse-agricultural-tariffs-2018-5

    What is boils down to is two heavyweights who have danced around the ring feinting jabs and after three minutes have gone to their corners to cool off.

    Life’s but a walking shadow, a poor player
    That struts and frets his hour upon the stage
    And then is heard no more: it is a tale
    Told by an idiot, full of sound and fury,
    Signifying nothing.

    In this case, perhaps “tariffs” should be substituted for “life”.

    1. 2slugbaits

      Bruce Hall Continuing with your boxing analogy, the judges would have to score this round for China on points. Even taking the story at face value, US consumers end up worse off than they were before Trump started this fight. It all began with Trump’s threat of tariffs on aluminum and steel, which had little effect on the Chinese but a big effect on US consumers, our Euro trading partners, Canada and Mexico. China then retaliated with its own tariffs. So at the end of the day we end up exactly where we were when Trump announced the aluminum and steel tariffs and before China retaliated. All parties would have been better off if Trump had never started this fight. Oh, and along the way Trump has managed to damage national security because of the ZTE components which have a history of being used by the Chinese to compromise US military and industrial security. And this is supposed to be an example of the Great Deal Maker’s skill??? This is Trump’s idea of how to “win” a trade war? The guy is clueless. Once again the only folks coming out ahead are the kleptocrats at ZTE and the corrupt owner of The Trump Organization, which is getting $500M from the Chinese for an investment project in Indonesia.
      https://thinkprogress.org/white-house-chinese-financing-trump-project-violate-constitution-76456a21225a/

      Even Shakespeare can’t prettify this ugly pig.

      BTW, I believe I did address the national security issue head-on. Way up at the top of this thread you will find my comment referencing the serious national security concerns that high ranking officers at the Pentagon had (and likely still have) about Trump.

      1. Bruce Hall

        2slug, no doubt that ZTE is part of a much larger Chinese technology war against the U.S. It’s difficult to get a clear picture of what is happening regarding the many moving pieces of the Chinese-North Korean-Iranian (add Russian to the mix) alliance and what, if any, concessions Trump may be getting (beyond agricultural tariffs) with regard to North Korea and Iran.

        Given the deviousness of those governments, it’s hard to imagine Trump accomplishing much with his “bargaining”.

        It’s understandable why the DoD doesn’t like any latitude given China and ZTE. There is a whole arm of the military dedicated to stopping the nefarious activities of China, Russia, Iran, North Korea, etc. cyber attacks: http://www.cybercom.mil/ . I wonder if the Pentagon will lift the stop-selling order on ZTE products and military bases? The ban on selling those products is more symbolic than anything else, but it would be in line with the military’s overall objectives.

  14. 2slugbaits

    Bruce Hall the Chinese-North Korean-Iranian (add Russian to the mix) alliance

    Good to see that you included Russia in the mix. They’ve been kind of the forgotten factor in all this. Just yesterday the Iranian and Russian foreign ministers met to discuss the US leaving the nuke deal. I’m sure Russia will be more than happy to cozy up with Iran. And Russia has been a quiet partner with North Korea. For example, the rocket engines used by the North Koreans were of a Russian, not Chinese design. Russia has very good strategic reasons for wanting to prop up the Kim regime. And if Kim does decide to hand over his nukes (highly unlikely!), then I would expect he’d send them a very short distance to Vladivostok.

  15. Barkley Rosser

    Steven has noted that one of the reasons ZTE was being hit was for its sales to Iran. So far I am seeing few commenting on the extreme hypocrisy of Trump letting ZTE off the hook under this circumstance, while in the wake of his withdrawal from the JCPOA he has his aides ordering European companies not to have any dealings with Iran or face being shut out of the US market.

  16. Benlu

    http://digg.com/2018/zte-trump-explained

    “Last month, officials said ZTE had violated its agreement with the United States because it didn’t punish senior management for having violated the sanctions. Instead, the Commerce Department said, ZTE paid them bonuses and lied about it. As punishment, the department forbade American technology companies from selling their products to ZTE for seven years.

    That means no Qualcomm chips or Android software for its phones, and no American chips or other components for its cellular gear. Analysts estimate that four-fifths of ZTE’s products have American companies.”

    1. Menzie Chinn Post author

      Bruce Hall: Yes, I saw this. This is why there is a set of bipartisan measures in Congress to modify the CFIUS process. I told my students to read this CRS report. By the way, CRS is the Congress’s think tank– many of their studies are online, and I recommend all people to read these studies if available (as opposed to Breitbart, ZeroHedge, etc.). Many are here.

      My international trade course website is ungated — see here. (Think of this as a positive externality of the State of Wisconsin funding higher education — not that the Governor appreciates it).

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