Sam is an investor in semiconductors and has a thread on the topic. She was very upset from the beginning because Trump's tackling of China might disrupt supply chains that had built up over many years. She had a vested interest in preserving the status quo.
You are right that I invest in tech companies, including semiconductor companies. You are wrong about the reason why Trump's actions vis a vis China upset me. I do not and did not have "a vested interest in preserving the status quo". I object strongly to China's mercantilist practices and their demands of partnerships and technology transfers from companies setting up shop in China as well as their blatant theft of IP. I believe, though, that Obama's approach to dealing with these problems in a multilateral way through TPP and working with the EU would have been a far better way of dealing with those things. Indeed, Trump's methods are bound to fail. I do not think that Trump's tariffs are "beautiful", and indeed the way he uses them and the threat of even more of them is disgraceful and one of the important reasons why there has been an economic slowdown around the world.
TPP took many years to complete because it included the reduction and even the elimination of many tariffs between the 12 Pacific Rim signatories and it also included labor and environmental baseline standards as well as IP protections that everyone agree to meet. If the US had joined it, it would have included many of China's biggest trading partners and, combined with EU countries, would have created a large bloc of countries that could have confronted China with demands that they stop those practices that everyone disagrees with.
According to the Congressional Research Service, TPP "would be the largest U.S. FTA by trade flows ($905 billion in U.S. goods and services exports and $980 billion in imports in 2014)". Including the US, the signatories represent roughly 40% of global GDP, and one-third of world trade.
The original TPP contained measures to lower both non-tariff and tariff barriers to trade,[11] and establish an investor-state dispute settlement (ISDS) mechanism.[12][13]... Many observers have argued the trade deal would have served a geopolitical purpose, namely to reduce the signatories' dependence on Chinese trade and bring the signatories closer to the United States.[24][25][26][27]
more at en.wikipedia.org
If the US had been part of the deal, China would have been cut off from making side deals with the other signatories. As it is, China is not only making bilateral side deals, they are part of negotiations with those same countries plus a few others to create a still larger trading zone which will have reduced tariffs and which will exclude the US:
The world’s largest trade deal could be signed in 2020 — and the US isn’t in it
Published Mon, Nov 11 20196:18 PM ESTUpdated Tue, Nov 12 20196:55 AM EST
Yen Nee Lee
Key Points
- A group of 15 Asia-Pacific countries is aiming to sign the Regional Comprehensive Economic Partnership, or RCEP, in 2020.
- The mega-deal started with 16 countries but India decided not to join the trade pact over concerns that it would hurt domestic producers.
- The urgency to conclude RCEP increased after U.S. President Donald Trump pulled his country out of another major free trade agreement, the TPP.
After more than six years of negotiations, more than a dozen countries in Asia Pacific are now aiming to sign what would be the world’s largest trade agreement in 2020.
The deal, called Regional Comprehensive Economic Partnership or RCEP, involves all 10 countries from the Association of Southeast Asian Nations (ASEAN) bloc and five of its major trading partners: Australia, China, Japan, New Zealand and South Korea.
Together, the 15 countries make up close to one-third of the world population and global gross domestic product, according to a Reuters report. That’s larger than other regional trading blocs such as the European Union and the United States-Mexico-Canada Agreement, or USMCA.
[....]
Those six other countries — Australia, China, India, Japan, New Zealand and South Korea — already have standalone free trade agreements with ASEAN. Coming together under RCEP would boost commerce across the group by lowering tariffs, standardizing customs rules and procedures, and widening market access especially among countries that don’t have existing trade deals.
All 16 countries started negotiating RCEP in 2013, when talks for another major trade pact — the Trans-Pacific Partnership or TPP — were underway. Given China’s absence in the then U.S.-led TPP, which was slated to be the world’s largest trade deal, many observers considered RCEP a way for Beijing to counter American influence in the region.
In 2017, however, U.S. President Donald Trump pulled his country out of the TPP and slapped punitive tariffs on several U.S. trading partners for what he said were unfair trade practices.
In particular, the U.S.-China trade war has hurt many Asian exporters by reducing demand for their goods and slowing down growth. The urgency to conclude RCEP increased after all that.
“RCEP was hard fought, but a choice made easier by the calculation that Asia needed to push back against protectionism even as the United States chose that path,” academics from the Australian National University wrote in a report.
continues at cnbc.com
Trump is an idiot. He is China's and Russia's best friend by isolating the US from the rest of the world. His "America First" policies threaten American influence and power in the world long term. It is sad to me that you, Kate, can't see that this is happening. I could write much more about the article to which you are responding but won't right now, this post is already long enough. But it is spot on in its critique of this deal. |
