Trump badly cornered at home by agribusiness and steel consumer lobbies: Trade

US President, Donald Trump (on the left) and Enrique Peña Nieto, President of Mexico, met in Hamburg Germany last week, for the G20 Summit. The two didn’t have an easy encounter, when trade came on the table. (German government work).

Donald Trump, the real estate mogul and TV reality show star, as President, discovered the hard way that international trade is a much more complicated issue than he could have ever imagined. His poor cognitive abilities and his rampant nature didn’t allow him to realize that international trade is a much more complex issue, than producing goods and making money out of selling them abroad. The economic, financial, business, legal, political, historical, geographical and social complexities governing international trade totally escaped the New York contractor.

This week Trump was badly cornered by the huge American agribusiness and steel consumer lobbies, the result of the lobbies’ growing negative feeling towards the President, who now cry loudly against his catastrophic statements about imposing import quotas and tariffs.  The powerful agribusiness lobby doesn’t chew their words. As for the big business groups consuming imported steel, they do not want to be seen openly contradicting the White House. The representatives of the agribusiness, however, directly accuse the President of planning to undermine their jobs and means of living.

Between Scylla and Charybdis

According to a Reuters report, Joe Schuele, a spokesman for the U.S. Meat Export Federation in Denver, Colorado said “…some other sectors of our economy are given better terms and in exchange for that agriculture tariffs would be reintroduced”. In short, meat exporters accuse the White House of preparing to ‘sell’ the animal husbandry sector, in order to gain better terms for the exports of other sectors, like manufacturing, or geographical areas of the US, which vote more massively for Trump. In short, the representatives of the farm sector and the downward businesses fear that the Trump administration is ready to support manufacturing by undermining their interests.

This is not at all far from the truth because the US, if renegotiates the 23 years old North American Free Trade Agreement, the famous NAFTA with Mexico and Canada, cannot expect to win on all fronts. In these games it’s always the same, ‘you lose some you win some’, you cannot have it all. Then the crucial question will be, which sector’s exports will be sacrificed in order to get better terms for another. Canada won’t be an easy interlocutor about renegotiating NAFTA with the US, because it has already signed a major all inclusive free trade deal with the European Union.

Damage already done

Anyway Trump’s unrestricted garrulousness about the ‘America first’ principle in reshaping the US foreign trade, has already started to harm the country’s exports. In the case of NAFTA, the uncertainties about the future have forced Mexico to look elsewhere in the world for supplies, currently covered by American exports of beef, pork and poultry meat, dairy products, wheat, maize, barley etc. The European Union is more than eager to cover Mexico‘s needs in the agrifood sector.

It’s very simple. Protecting, for example, US manufacturing with additional tariffs, will be exchanged in negotiations by reciprocal Mexican tariffs on US exports of animal husbandry products. The current NAFTA arrangement that Trump wants to change, offers full access to the huge Mexican and Canada markets for US farm exports.

It’s as hard as steel

Passing now on to the sector of steel and steel products, things are even more complicated. During his 2016 election campaign Trump promised to introduce import quotas and impose tariffs on excess incoming quantities. Given that the imported products are cheaper than the home produced, if this will be the case, steel and steel products will become more expensive for American buyers. In practice, however, all the key sectors of the US productive constellation, like energy, the automotive industry, mechanical and civil engineering works, infrastructure projects and construction in general use both home and imported steel and steel products.

In all those sectors there are huge corporations with direct access to Washington’s establishment, by operating or employing powerful lobby organizations. Their strong argument is that while the US steel industry employs around 150,000 workers, all the sectors who will be hit by the more expensive steel and steel products offer good jobs to more than ten million people. And this without counting the additional cost the consumers of end products will be obliged to pay, due to the increased input costs. By the same token, the US exports of all industries which use steel and steel products as inputs will be also hit by increased costs.

Political charlatanism

Yet, the case of steel was a benchmark for Trump’s electoral populist verbalism back in 2016. He used this example to amplify beyond recognition his argument about the, arguably, totally corrupt and utterly inefficient Washington establishment. According to this populist construction, the establishment had repudiated the ‘interests of the American people’, by exporting their jobs to Mexico, China and Europe, through seriously detrimental and badly negotiated trade deals.

Wrong perceptions

Obviously, the perception Trump had for steel as described by this word loaded with meaning, was much different than what steel means today for the American economy. Undoubtedly, the US is currently fuelled by high technology and financial services. In short, Trump’s wrong cathexis about what his country is today, seems to be completely outdated and, for that, highly dangerous. Unfortunately, it turns out, that a large part of his electoral audience suffered from the same illusions as him and he duly exploited that.

Now, though, that Trump is gradually brought down to reality by the interventions and the influence of powerful lobbies, he must feel trapped between a rock and a hard place. On the one hand he has to compromise his key electoral promise and, on the other, he cannot endanger the farm sector and the steel using (buying) industries, which constitute the heart of the American productive machinery.

Bush did it

George W. Bush in 2002, during the second year of his first administration unilaterally imposed additional tariffs on steel imports. Soon the countries which were hit, retaliated by levying import taxes on US exports, to such an extent as to finally force Washington to withdraw the extra levies. After a few years, the US steel industry lost tens of thousands of jobs, which wouldn’t have been lost hadn’t Bush started this trade war.

In conclusion, the options are clear. Trump can either imitate his Republican predecessor and undermine what he hypocritically wants to protect, or do nothing and loose face by abandoning his banner electoral promise. Reportedly, he will do both. In any case it’s too dear a price for a lesson on international trade, but Trump, being a total charlatan, doesn’t seem to care much. It will be his country and countrymen to pay the cost, while his personal wealth will surely be much greater when leaving the White House than when he came in. Unfortunately, the populism of politicians is always detrimental for the people who it is meant to support.

 

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Evidence shows ‘brutal’ killing of Saudi journalist ‘planned and perpetrated’ by State officials: UN independent expert

We must learn and change after Haiti sexual abuse scandal -Oxfam chief

Medical training without borders: what’s still missing?

A few, or rather two, trade and economic alliances may rule our brave new world

Statement by Executive Vice-President Margrethe Vestager on State aid measures to address the economic impact of COVID-19

Project Manager – 2024

How civil society must adapt to survive its greatest challenges

Mergers: Commission opens in-depth investigation into proposed acquisition of DSME by HHIH

Carbon neutrality and funds for EU programmes are EP priorities for EU summit

Facts, not fear, will stop COVID-19 – so how should we talk about it?

FROM THE FIELD: ‘Harvested’ rainwater saves Tanzanian students from stomach ulcers, typhoid

More accessible products and services for disabled and elderly people

Fair and Simple Taxation: Commission proposes new package of measures to contribute to Europe’s recovery and growth

“The markets have moved on renewables, policy makers must keep up”, A Sting Exclusive by Erik Solheim, Head of UN Environment

These countries have the most powerful passports

IMF asks Europe to decide on bank resolutions and the Greek Gordian knot

Health: The neglected aspect of climate change

Syria: WHO appeals for funding to sustain critical health care for millions trapped by conflict

Why the ECB prepares to flood the markets with more and free of charge euro; everybody needs that now

This app uses augmented reality to rewrite ‘herstory’

Will the EU ever tackle the migration crisis despite the lack of political will?

Cybersecurity Act: build trust in digital technologies

Poverty and social exclusion skyrocket with austerity

Eurozone governed by an obscure body and gray procedures

Will the EU reconsider Frontex’s role in light of accusations about violations of migrants’ human rights?

Guterres says UN stands ready to support Brazil’s search and rescue effort in wake of tragic dam collapse

Is there a chance for the West to win the war on terror?

An entrepreneurial point-of view on tackling the migration crisis and the risks of abolishing Schengen

The European Sting @ the European Business Summit 2014 – Where European Business and Politics shape the future

How COVID-19 is throttling vital migration flows

Why businesses are nothing without strong human rights

Does research make sense any more? The dire need for new ways to measure success

In tech-driven 21st century, achieving global development goals requires closing digital gender divide

Wind farms now provide 14% of EU power – these countries are leading the way

European Commission determined to conclude EU-Mercosur trade deal this year despite French concerns

We’ve lost 60% of wildlife in less than 50 years

Mental health and suicide: when the alarm bells are faced with deaf ears

“As long as we work together through thick and thin, more benefits can be delivered to the people of Eurasia”, China’s Premier Li Keqiang highlights from ASEM in Brussels

How youth and technology can drive Africa’s COVID-19 response

Nearly $4 billion needed to protect 41 million children from conflict and disaster

The big five EU telecom operators in dire straights

How transparency can help the global economy to grow

What just happened? 5 themes from the COP24 climate talks in Poland

Myanmar military leaders must face genocide charges – UN report

Helping small businesses fight cybercrime benefits the global ecosystem

WHO coronavirus briefing: Isolation, testing and tracing comprise the “backbone” of response

Everything you need to know about the US government shutdown

These are the world’s least – and most – corrupt countries

Peru should help more young vulnerable people into work

ILO warns of widespread insecurity in the global labour market

Greece will probably stay in the Eurozone but at what cost?

Victims’ Rights: New Strategy to empower victims

This incredibly detailed map of Africa could help aid and development

In Mozambique, it’s ‘a matter of the heart’ says Guterres, lauding the cyclone-struck nation’s ‘undeniable moral authority’

Service and Sacrifice: For Ghana, UN peacekeeping is a ‘noble opportunity to serve humanity’

Britain’s May won the first round on the Brexit agreement with the EU

More attacks, ‘persisting security challenges’ threaten progress in West Africa, Sahel

Who is to pay for Trump’s trade war against China?

EU and African leaders to jointly tackle the migration crisis across the Mediterranean

Yemen parties underscore ‘strong desire’ for peace, UN Envoy reports

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s