Japan and the E.U. hit back at Trump with major free trade agreement

In Trump’s insignificant little mind he is a master of “the deal,” but his alleged prowess in “dealing” with America’s international trading partners is proving to be a significant detriment to nearly every industry in the United States. That fact was manifest in grand fashion when as expected, Japan and the European Union signed a major trade agreement that is as much a slap in Trump’s bloated orange face as it is going to be an economic benefit to the nations involved – nations that will not include the United States.

President Barack Obama, and this nation’s leading economists, manufacturing industries and corporate leaders, were avid supporters of the Trans Pacific Partnership (TPP) because it allowed America to dictate its own economic destiny. The concept of America ever being able to dictate, or control, its own economic destiny died the day of Trump’s poorly attended inauguration. That is the day when reality sunk in that a know-nothing television celebrity intended to “make America great” by abandoning hard-fought trade agreements negotiated solely to benefit American industries. That reality prompted America’s trading partners to begin seeking new trade agreements without the isolationist-minded United States’ involvement; the Japan and the European Union agreement is a result of Trump’s plan to make America great by isolating it from the rest of the world.

The agreement signed last week is the culmination of negotiations that began exactly one year ago during the so-called G20 economic summit in Hamburg Germany. Those negotiations were a direct result of Trump unilaterally withdrawing America from the TTP and coupled with his campaign pledge to force Canada and Mexico to renegotiate the North American Free Trade Agreement (NAFTA).

It is noteworthy that just the threat of America reneging on its NAFTA agreement prompted Mexico to initiate its so-called “Plan B” and begin negotiations with other nations eager to supplant America’s powerful agriculture sector. Those negotiations have yielded agreements that benefit Mexico and several other nations at the expense of America’s agriculture sector; the new EU-Japan Economic Partnership Agreement (EPA) deals an additional blow to American farmers.

The new EPA drastically reducesmost bilateral tariffs including high Japanese duties on EU products and EU tariffs on Japanese automobiles.” The European Commission projects that the EPA will eliminate roughly $1.2 billion in tariffs for EU exporters and “double the amount for Japanese companies.” Because of Trump, American exporters will be at a major trade disadvantage because they are now “isolated” from the “free-trade zone” the countries making up around 30 percent of the world’s GDP now enjoy. As noted by Bob Bryan writing for Business Insider, “The EPA is the just the latest in a series of liberalizing agreements that have been initiated or formalized by major economic powers around the world;” all while Trump is isolating America and antagonizing the country’s allies and trading partners as a matter of course.

That isolationism and protectionism Trump champions is also one of the reasons the EPA was signed in a very public way. Japanese Prime Minister Shinzo Abe and European Council President Donald Tusk were forthright in telling the rest of the civilized world why they acted decisively without American participation. Mr. Tusk said:

This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order. We are sending a clear message that we stand together against protectionism.”

Prime Minister Abe also leveled some criticism Trump’s way and rightly asserted that Japan and the EU were taking the lead in international trade that America once enjoyed. Mr. Abe said:

“While protectionism is spreading in the world, Japan and the European Union will take the lead as flag bearers for free trade.”

It bears repeating, ad nauseam, that America is being left out of more and more free trade deals due to Trump. While the imbecile in the White House consults his own moronic mind on international trade, the world’s other “major economic powers” have been negotiating similar deals to the EPA over the past year or so.  It is true that some of the deals were in the works prior to Trump, but the loss of America’s leadership prompted the rest of the world to expedite their commitment to free trade and eliminate the barriers like those Trump is erecting on America’s trading partners.

This EPA deal is not the EU’s only foray into international trade as the new world leader. The EU is in the process of ratifying “a landmark agreement with Canada” and “pursuing deals with Mexico, Australia, and the so-called “Mercosur;” a trading bloc made up of Argentina, Brazil, Paraguay, and Uruguay. The EU is also in talks with China that recently “lowered tariffs on products including vehicles and launched talks with the EU to build a stronger trade relationship;” all while Trump is doing everything in his power to decimate America’s trade relationships with ill-advised unilateral tariffs.

In fact, last Monday, China and the European Union economic leaders issued a rare joint statement reiterating their dedication “to resisting protectionism and unilateralism, and making globalization more open, balanced, inclusive, and beneficial to all;” except for America with its isolationist malcontent incapable of comprehending the benefits of participating in, much less leading, a global economy.

It is unclear how much damage to America Republicans and their corporate funders are going to allow Trump to single-handedly inflict on the nation’s economy before they say enough. He has created a disaster for the agriculture industry with idiotic immigration policies, tariffs, withdrawing from the TTP and just threatening to balk on America’s commitment to NAFTA. And the downstream damage to American manufacturers due to tariffs on steel and aluminum is going to be significantly devastating. All the while, Trump’s supporters who are the first casualties of his isolationism maintain their undying support for him. It is almost certain they will continue their support even as they lose their livelihoods and suffer higher prices due to Trump’s tariffs.

It is a travesty that although America is a powerful economic force, it ceded its global leadership to other nations like Japan, Canada, China, and the European Union simply because Trump fails to recognize the benefits of globalization and the value of free trade. The bigger travesty is that Trump’s supporters, those who are already feeling the effects of his isolationist and protectionist policies, will continue supporting him for two overriding reasons unrelated to international trade; he pledge to make America white and Christian.

Image: South China Morning Post

Trump Is Singlehandedly Decimating America’s Agriculture Sector

If Donald Trump has a reputation in business, it is as a crooked operator who bilks his creditors, investors, contractors, and suppliers alike and files bankruptcy at about six or seven times the rate most people get a divorce. Trump brought that notorious business acumen to the Oval Office and has already put the hurt on American agriculture with an ill-advised threat to pull out of the North American Free Trade Agreement (NAFTA). As reported here about a month ago, just the uncertainty of Trump’s intent for NAFTA has cost the American agriculture industry dearly as Mexico rapidly resorted to its “plan B” and made fabulous deals with several other reliable nations and markets. The losers, as usual, are some of Trump’s staunchest supporters and the rest of the population that will suffer the consequences of an isolationist malcontent in the White House.

It has been a couple of months since Trump pulled out of the Trans Pacific Partnership (TPP), but now the already struggling agricultural sector has another reason to mourn the idiot in the White House. The massive 12-nation trade agreement was set up to be extremely friendly, and highly profitable, to American agriculture because it covered “a whopping 40 percent of the world’s economy.” Since expanded agricultural trade and elimination of tariffs for American products was hard fought, and won by President Obama, for American farmers the Trans Pacific Partnership was a lifeline.

The agriculture sector hailed President Obama’s efforts, and success, at giving American farmers their long sought after chance to eliminate tariffs imposed by nations in the TPP. Those tariffs restricted “the onetime breadbasket” of the world from selling its meats, grains and dairy products to massive importers of agricultural products such as Japan and Vietnam. Now, those products are going to be sold by many other nations that comprehend the benefits of “free trade” sans “punishing tariffs” and eagerly grabbed the TPP lifeline for their agricultural sector.

With an isolationist fascist and incompetent business failure in the White House, that “lifeline” for America’s farmers vanished faster than America’s “already struggling agriculture sector.” The only positive in this horrendous news is that the “struggling agriculture sector,” a huge Trump support group, will suffer before the rest of the population; but they still continue to support him because he pledged to make America white again. According to a report in Politico, even farmers who are scared to death their businesses are set to succumb at the hands of a notoriously inept businessman in the White House still support Trump.

Trump’s incredibly boneheaded stunt of pulling out of the world’s biggest trade deal is being described as  “a double hit on most agricultural producers,” and one in particular is a prime example of what happens with an isolationist moron in the White House.

In Eagle Grove, Iowa, the trade deal promised an increase of $10 billion in agricultural output over the next decade according to conservative estimates by the U.S. International Trade Commission. It is noteworthy too that the $10 billion figure is “an increase” in output that means a monumental increase in income, jobs and profits.

Now, those “increases” will not materialize because of Trump and it portends even more damage than just losing a projected $10 billion and the jobs it would deliver. Not only did Trump’s decision to withdraw from the trade pact wipe out American farmers’ ability to sell their goods to the 11 other nations making up 40 percent of the Earth’s economy with no tariffs, it virtually eliminated America’s agriculture sector as a global competitor.

It opened the floodgates for “rival exporters” such as Australia, New Zealand and the European Union to negotiate even lower tariffs with importing nations. Add to that a recently announced extraordinarily enormous trade agreement between the European Union and Japan and it doesn’t look promising for America’s struggling agriculture sector; especially after President Obama negotiated phenomenally good deals for American producers. Trump’s screw-up created greater competitive advantages for several other nation-producers over American agricultural exports. America’s farmers should expect even more bad news in the coming months, if not weeks, as the rest of the world stops needing American agricultural products.

According to a Politico analysis, the remaining 11 countries still in the TPP are actively engaged in a stunning 27 separate trade negotiations with each other; including with other major trading powers in the Pacific region like China and massive blocs like the EU. Those 27 deals without the United States range from exploratory negotiations to deals already signed and awaiting ratification. And, because of Trump, seven of the most significant deals that would have been extremely beneficial for America’s agriculture sector have been concluded without U.S. participation or inclusion since Trump withdrew America from the substantial trade agreement five months ago. Anyone in, or remotely connected to, the agricultural sector should be horrified at what their white hero did to their families, their industry, and their means of income.

One North Carolina-based family pork and poultry business made a huge investment in processing plants in anticipation of an equally huge return due to TPP favoring America’s farmers. Now Ron Prestage says, “I’m scared to death;” and he should be.  Mr. Prestage said his family already started digging the wells and moving dirt for another new processing plant and he fears they may have gone “beyond the point of no return on the new plant.”

According to an agricultural economist at Iowa State University, Dermot Hayes, the idea of farmers and the agriculture sector making big investments based on an epic “free trade” deal is not just normal; it is a good and savvy business investment. Mr. Hayes said in referring to the Prestage operation and other pork-industry investments, “At the time those investment decisions were made, the U.S. had never turned down a free trade opportunity.

Of course the United States has never had a self-professed genius with no interest or knowledge of international trade in the White House either, so maybe Trump shafting the agriculture sector was unexpected; especially from his staunch supporters in the agriculturally rich Midwest.

Mr. Hayes noted that the livestock industry in particular had “in its sights a future of expansion amid soaring export growth.” But with Trump withdrawing from TPP, all of that expansion and soaring export growth “has pretty much disappeared.”

It wasn’t just the livestock industry that harbored the highest expectations on the back of President Obama’s hard work.

Most in the industry expected a boom from exports as a result of TPP, with continued strong sales made possible by NAFTA.”

In one growing and highly profitable market for American farmers producers were set to expand sales of organ meat and other items not easily sold domestically, because Vietnam was completely eliminating its tariffs on American products altogether under TPP. It is why “free trade” is beneficial for all the party’s involved – no or low tariffs are a dream scenario for exporters but not acceptable to a “no-account business genius” like that imbecile Trump.

Now, because there is an idiot in the White House, those tariffs, like every other nations’ tariffs, remain in place for American agricultural products because the United States ruled by dumb Don is not interested in “free trade.” Unfortunately, a growing number of countries are not interested in any kind of trade with America for one good reason; they have already negotiated and signed trade agreements with many other reliable and fair trading partners.

Trump’s record in business is littered with broken and bankrupt companies due to his so-called “renowned business acumen,” and now the record can add America’s agricultural sector among the pile of Trump’s destruction. And in case any American thinks that because they aren’t farmers Trump’s handiwork will not affect them, wait until they have to pay $10 to $15 for a tomato out of season and then watch America’s agriculture industry go bankrupt; all because they supported a corrupt con man who promised to make America white again.

h/t Politico