Monday, July 23, 2018

Will Congressional Republicans Suffer From Trump's Disastrous And Pig-Headed Trade Policies?


In the last post, we looked at how Republican chances to hold onto Congress continue to collapse, largely because of who leads their party. That post was about his failures in regard to Russia. But the trade war he's provoked might be much worse for the GOP. Politico reporter Megan Cassella pointed out the bad timing of his trade policies and how they will be impacting consumers as they head to the polls. "Market analysts, industry experts and economists warn," she wrote, "the economic fallout of the president’s tariffs could peak around election time."

A few weeks ago we focussed in on how Trump is inadvertently helping Democrat Phil Bredensen win the open Tennessee Senate seat and how his trade war could change Iowa's House make up from 3 Republicans and one Democrat to 4 Democrats.

Cassella posits that "Trump's trade wars could become a major political drag for Republicans, with job losses and price increases piling up just as voters head to the polls in November. Trump jolted markets once again early Friday when he said he’s prepared to impose penalties on some $500 billion in Chinese goods regardless of the consequences that might ensue, economic or political."
[M]arket analysts, industry experts and economists warn that the economic fallout of the president’s tariffs-- those that are already in effect and those he’s threatening to impose-- is only going to intensify over the coming months and could reach a peak around election time.

“We’re already hearing complaints now from companies, so by the time we get to the midterms, you’re going to be hearing governors, mayors, Congress complaining about jobs, about cost increases, about problems,” Carlos Gutierrez, the former Commerce secretary under President George W. Bush, told POLITICO. “The question is: Will that be strong enough to offset the idea that we have to get tough on our trading partners, and that our jobs are being stolen overseas?”

It takes months for most consumers to feel the impact of tariffs, but as the fall approaches, everything from groceries to appliances could start to cost more at major retailers across the country. Democrats could use these price increases as a political cudgel against Republicans in swing districts as they try to take back control of Congress.

Trump has so far suffered little political blowback for his tariffs and trade threats, saying that he is simply following through on promises he made during the campaign to crack down on trading partners, even close allies, and put America first. Since March, he has imposed blanket tariffs on nearly all imports of steel and aluminum and placed penalties on $34 billion in goods from China, a total likely to increase to $50 billion next month and into the hundreds of billions later this year.

In return, countries have retaliated with tit-for-tat duties on everything from U.S. agricultural goods to Kentucky bourbon and Harley-Davidson motorcycles, aiming to sway top Republican lawmakers by hurting constituents in their districts.

But Trump and his party could soon begin to face consequences as companies in the coming months start reporting lower earnings, reassessing their supply chains and holding back on investment, all of which will begin to ripple throughout the economy and could lead to a slowdown or full-blown recession, experts say.

If all of the tariffs that have been proposed take effect, they would bring down long-run U.S. GDP by 0.47 percent-- about $118 billion-- in the long term and cost more than 364,000 jobs, a new analysis from the Tax Foundation shows. The International Monetary Fund also warned this week that trade tensions could cut global output by some $400 billion by 2020, and that the U.S. is "especially vulnerable" to effects of an international slowdown.

Price increases would vary by product, ranging anywhere from a few cents on a can of beer or soup to around $6,000 on a family car, if the administration moves forward with auto-specific tariffs it has threatened.

Even if Trump doesn't move forward with any additional duties, the uncertainty caused by his policies and rhetoric is leading some companies to begin pulling back investments in research and development. They're afraid that if they develop products for foreign markets, those markets might no longer be accessible to them in six months or a year.

The agricultural industry has been particularly vulnerable: Countries like Mexico have begun to diversify their import markets by buying more corn and soybeans from Brazil instead of the United States, in an attempt to reduce their dependence on a country that could erect new trade barriers at any time based on the president’s whims.
How's this going to go over in swing districts in Iowa, Michigan, Minnesota, Wisconsin, Florida, Tennessee, Kentucky...?

Trump is playing game of chicken with President Xi Jinping of China. Xi knows exactly what's happening here in November and he's not likely to give Trump a way out of the mess he's created. Political leaders in the EU, Canada and Mexico all hate Trump and are all eager to see him take a big fall. So... unless Trump can suddenly made some kind of deal with a couple of small fascist governments like Hungary, Saudi Arabia and the Philippines, Republicans in Congress are going to increasingly get blamed for being Trump enablers.

This kind of research by PEW (below) shows that Trump-- in swing districts like Mimi Walters (R-CA), Bruce Poliquin (R-ME), Don Bacon (R-NE), Cathy McMorris Rodgers (R-WA), Andy Barr (R-KY), Jeff Sessions (R-TX), Dave Brat (R-VA), Mia Love (R-UT), Erik Paulsen (R-MN), Pete Roskam (R-IL), every New Jersey Republican, Steve King (R-IA) and dozens more-- will be an albatross around the necks of House candidates perceived as rubber stamps, enough to swing elections towards Democrats.

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At 11:03 AM, Anonymous Anonymous said...

"Democrats could use these price increases as a political cudgel against Republicans in swing districts as they try to take back control of Congress."

But they won't! Their owners won't like them barking without being commanded.

And don't expect groups like farmers to turn against Trump. They would let him burn down their crops and slaughter all of their animals if it would hurt all of those these flown-over hayseeds hate with a passion. Some have already said he remains their leader if their incomes get hit. Former Harley Davidson workers still support him anyway. And so on.

Today's "democrats" are the embodiment of William F Buckley's signature statement about conservatives regardless of their perceived position on the spectrum. They are standing athwart recent history and loudly yelling "STOP!". To mangle a metaphor, these "democrats" consider themselves too politically big to fail.

The answers are staring them in their upturned faces. Bernie showed them how to appeal to people and raise lots of money. Ocasio-Cortez showed them how to campaign - and win. But those who control the Party continue to demonstrate that they would rather lose elections than lose campaign contributions from the wealthy. They would rather lose support of the working people than to lose the support of the wealthy people.

And that is how they are going to blow the midterms even without any help from GOP election tampering and voter suppression.

At 1:35 PM, Anonymous Hone said...

We can count on absolutely nothing. Trump is so unpredictable and impulsive anything could happen in the next few months. Sure thing Trump will start a war, like with Iran, to garner support before the election. He is a freaking MONSTER ruining our country and the world.


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