Trump On Trade Wars With China, U.S. Allies: ‘We’ve Been the Stupid Country for So Many Years’

During his broad-ranging interview with 60 Minutes, President Trump said America has been a “stupid country” in the past, while also defending his approach to international economics and foreign policy.

Lesley Stahl pressed Trump on his escalating trade wars with China and their retaliation across multiple markets. Trump disputed her “trade war” characterization and that eventually led to a chat on the Trump Administration’s tariffs against American allies.

“I mean, what’s an ally?” Trump said. “We have wonderful relationships with a lot of people. But nobody treats us much worse than the European Union.”

Stahl continued to ask about this “hostile” approach, and whether Trump would consider dissolving the western alliance under NATO.

“We’ve been the stupid country for so many years,” Trump said. “We shouldn’t be paying almost the entire cost of NATO to protect Europe, and then on top of that, they take advantage of us on trade.”

[Mediaite]

Trump: Now Ford can build Focus in U.S.; Ford: That makes no sense

Auto analysts groaned on Sunday in response to tweets sent by President Trump that touted his tariffs on Chinese imports and his claim that the trade war would inspire Ford Motor Co. to build its Ford Active crossover in the U.S. rather than overseas.

Wrong, Ford said.

The Dearborn-based company issued a statement in response to the president’s tweet:

“It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units and its competitive segment. Ford is proud to employ more U.S. hourly workers and build more vehicles in the U.S. than any other automaker.”

Jon Gabrielsen, a market economist who advises automakers and auto suppliers, said, “This is further evidence that neither the president nor his trade representatives have any clue of the complexities of global supply chains.”

A trade war actually hurts one of America’s most iconic companies, Gabrielsen said. “This forces Ford to forfeit the sales they would have had if they could continue to import that low-volume niche vehicle.”

Ford on Aug. 31 canceled plans to import the Focus Active crossover from China to the United States because of costs from the escalating trade war.

“Given the negative financial impact of the new tariffs, we’ve decided to not import this vehicle from China,” Kumar Galhotra, president of Ford North America, told reporters.

The Focus Active was meant to take the place of the Ford Focus in the U.S. because Ford is phasing out the entry-level car as it shifts its production to pickups and SUVs. Focus Active was scheduled to go on sale in the late summer of 2019.

“Basically, this boils down to how we deploy our resources. Any program that we’re working on requires resources — engineering resources, capital resources,” Galhotra said. “Our resources could be better deployed at this stage.”

Tariffs imposed by President Donald Trump on Chinese products and the threat of more had a direct impact on the Aug. 31 decision, according to Ford officials. The United States already has imposed tariffs on steel and aluminum from China and, as of July, put a 25 percent tax on autos imported from China.

“Ford was pretty clear in its statement: Focus production will not shift in part or in whole back to the U.S.,” said Stephanie Brinley, a senior analyst at London-based IHS Markit.

Trump didn’t tweet about the Ford announcement at the time. On Sunday, he quoted the CNBC TV network and tweeted, “‘Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs.'” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs.”

“Ford is one of the companies that has the highest U.S. content and the most U.S. autoworkers of any company,” said Kristin Dziczek, vice president of the Industry, Labor & Economics Group at the Center for Automotive Research in Ann Arbor.

“You know, their statement was very clear. It’s too costly to build that car here and they weren’t planning to. They don’t make business decisions based on tweets. They make decisions based on whether there’s a demand here for the vehicle and if it can be done profitably. Demand for small cars is waning, so they thought they would build some for the rest of the world and bring a few for folks here who want one,” Dziczek said.

Building the car may still be the plan, but not in the U.S., she emphasized, along with other analysts. At issue is finding low-wage production sites to maintain profit margins, and that doesn’t include the U.S. or Canada.

“This trade thing turns into Whac-A-Mole,” Dziczek said. “You can shut off China and things will come from India, Thailand, Taiwan, Poland, Slovenia. There are loads of low-cost countries for parts and vehicles.”

After touting his tariff plan, the president also cited tariff data that alarmed analysts.

“If the U.S. sells a car into China, there is a tax of 25%. If China sells a car into the U.S., there is a tax of 2%. Does anybody think that is FAIR? The days of the U.S. being ripped-off by other nations is OVER!”

Wrong again, Dziczek said. “China lowered the tariff rate from 25 percent to 15 percent for most-favored nation status — which is offered to World Trade Organization members — but raised it to 40 percent for the U.S. in retaliation to the tariffs we put on Chinese goods.”

She continued, “And the tariffs we charge for goods coming into the U.S. is 2.5 percent, not 2 percent. And then we put an additional 25 percent on cars coming from China into the U.S. So now they’re paying 27.5 percent. This is why Ford had to re-evaluate.”

American automakers ship about 250,000 vehicles a year from the U.S. to China, while China ships about 50,000 vehicles to the U.S. annually, Dziczek noted.

For example, every Buick Envision sold in the U.S. is made in China. General Motors has petitioned that the car be excluded from tariffs on Chinese-built products.

Ford spokesman Mark Truby emphasized Sunday that the company plans to build many new vehicles in America. “For example, we are starting production soon of the Ford Ranger in the factory just outside of Detroit where the Focus was previously built. We’re not defensive about building in America. Nobody does more than us. We also have to make a business case that works.”

[Detroit Free Press]

Donald Trump: ‘Our country was built on Tariffs’

U.S. President Donald Trump on Wednesday morning took to Twitter, as he often does, to lambaste some of his favourite targets: the U.S. Justice Department, the “rigged Russian witch hunt” (a.k.a. the Robert Mueller investigation), and of course, undocumented immigrants.

He also brought up one of his past greatest hits, tariffs, writing that the United States was “built on Tariffs, and Tariffs are now leading us to great new Trade Deals” (capitalization his, not ours).

Of course, tariffs have been a mainstay in Canadian headlines for the past several months, with Trump levying duties on U.S. imports of Canadian steel and aluminum. The U.S. president has recently threatened more tariffs on Canada’s auto industry.

He’s also slapped massive duties on goods from China, Mexico and, most recently, Turkey. Those nations, along with Canada, have come back with retaliatory tariffs of their own.

Many users on Twitter are pointing out the holes in Trump’s latest tweet. Like the fact that no new trade deals have actually been signed:

Or that many of the people Trump claims his tariffs will help aren’t really happy with them at all:

The Wall Street Journal points out that Trump’s action against Turkey actually goes against longstanding U.S. policy of minimizing foreign crises:

[Yahoo]

The EU reportedly used colorful flash cards to explain trade policy to Trump

European Commission President Jean-Claude Juncker reportedly used colorful cue cards to explain issues of global-trade policy to President Donald Trump during their meeting earlier this week.

According to a report from the Wall Street Journal on Thursday evening, Juncker and his team used the cards to simplify complex issues for the president as a means of getting their points across as effectively as possible.

The Journal’s report says Juncker “flipped through” more than a dozen cards, which had minimal information on them, and all focused on a single issue. These included the automotive trade, and regulatory standards for medicines, the report added, saying that there were a maximum of three figures per card.

“We knew this wasn’t an academic seminar,” a senior EU official who was at the meeting told the Wall Street Journal. “It had to be very simple.”

Trump and Juncker on Wednesday agreed to the beginnings of a deal that would end the previously growing trade tensions between the US and the EU.

During the meeting, the EU agreed to import more American soybeans and liquefied natural gas. Both sides agreed to work to decrease industrial tariffs and adjust regulations to allow US medical devices to be traded more easily in European markets.

“This was a very big day for free and fair trade,” Trump said at a press conference after the pair’s meeting.

The EU’s use of flash cards is not without precedent. Trump is well-known for his distaste for lengthy documents, and is said to prefer single-page memos when deciding on policy.

In May 2017, a report from Reuters said that Trump likes “single-page memos and visual aids like maps, charts, graphs and photos.” A source quoted by Reuters said aides also strategically put Trump’s name into “as many paragraphs as we can because he keeps reading if he’s mentioned.”

[Business Insider]

Trump Touts U.S. Being ‘Back on Track’ With the EU After Meeting With Juncker: We ‘Love Each Other’

President Donald Trump said during a White House event today the U.S. will be working with the EU to address the current trade dispute, and tonight he touted how things are “back on track.”

Trump met with European Commission President Jean-Claude Juncker today and he’s tweeting that it was a big success:

Trump also shared a picture of himself and Juncker:

[Mediaite]

Reality

Trump claimed the EU promised to purchase more soybeans and that made it all worth it, but the EU doesn’t buy goods such as produce, individual European countries do.

EU officials confirmed the Trump/Juncker agreement is nothing more than a political pledge by the EU not to do anything that affects the market conditions responsible for European countries buying more beans.

We alienated friends, trashed our reliability in front of the world, made us all pay more with his taxes on us, cost American jobs, all so soybean farmers could sell a few more barrels they were already going to sell to the EU anyway.

Got it.

Trump says ‘vicious’ China targeting U.S. farmers on trade, urges critics to ‘be cool’

President Donald Trump on Wednesday blamed China for targeting U.S. farmers in an effort to undermine trade negotiations with Beijing, and he urged critics of his escalating trade war to “be cool.”

“China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S.” Trump posted in one of a series of tweets on Wednesday. “They are being vicious in what will be their failed attempt. We were being nice – until now!”

The tweets come as Trump’s trade policy is increasingly under fire from Republicans on Capitol Hill, especially those representing farm states where China’s retaliatory tariffs are affecting crop prices. The Trump administration rolled out a $12 billion subsidy plan on Tuesday to help farmers, but the measures were widely criticized by Republicans.

“When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity,” Trump wrote Wednesday. “Negotiations are going really well, be cool. The end result will be worth it!”

Trump is set to meet Wednesday with European Commission President Jean-Claude Juncker after months of criticism directed at European tariffs. The two leaders are expected to discuss Trump’s threat to impose tariffs on European cars.

There is also a domestic political component to Trump’s trade and tariff policies.

Trump political advisers are clearly worried about how tariffs are affecting farmers, key sources of votes throughout the Midwest. They could be decisive as Republicans face tough election battles in November to keep control of the House and Senate.

The president himself expressed a rare note of anxiety in a speech to veterans Tuesday in Kansas City, Mo., a key agricultural state.

“The farmers will be the biggest beneficiary” of his trade policies, Trump said. “Watch. We’re opening up markets. You watch what’s going to happen … Just be a little patient.”

Trump travels Thursday to two more agriculture states, Iowa and Illinois.

[USA Today]

Trump-Created European Trade Crisis Averted by Fake Deal

Last night, the Trump administration announced with maximum fanfare that the trade war with the European Union was over. “This was a big day for free and fair trade!,” tweeted an excited President Trump. For all the hype and surprisingly credulous press the announcement attracted, it amounts to little more than a face-saving truce. If you’re looking for any details as to how this will work, too bad, they don’t exist.

The trade “deal” follows the script of the ballyhooed North Korean nuclear “deal” from last month. The cycle begins with bellicose Trumpian threats designed to increase American leverage. This leads to negotiations, which produce an impossibly ambitious and thoroughly vague “solution” that allows Trump to boast that he has averted a crisis of his own making.

In North Korea’s case, the “agreement” involves a nonverifiable promise to denuclearize the Korean peninsula at some future date. The trade “deal” is a promise to eliminate tariffs between the United States and the European Union. In theory, it would be possible to eliminate all tariffs between the E.U. and the U.S., but the process would take many years to complete — the European Union has 28 member states, all of which have internal political dynamics and constituent business interests to navigate.

In the meantime, the practical meaning of Trump’s deal is that both sides will halt the cycle of retaliatory tariffs. Despite Trump’s belief that his methods had produced valuable leverage for his own position, the spat had imposed acute pain on his own constituents — especially farmers, who have suffered dire costs from retaliatory tariffs. The president had taken to pleading with his supporters to stop complaining and let him sue for peace:

He was begging his allies to stop complaining about the tariffs. Like a dog!

Trump’s campaign adviser Stephen Moore told the Washington Post yesterday, “The one thing I do know about Trump is that he’s not going to back down.” Characteristically, the one thing Moore knows turned out to be completely false.

But it is easy to see how Trump plans to turn this shambolic retreat into another famous victory. Begin with the assumption that the European Union has been screwing the Great Companies of the United States with one-sided and very, very unfair tariffs for decades. (This is not true.) Then proceed to the assumption that Trump has produced a deal to eliminate all these tariffs. (Completely unrealistic.) By stacking the two fantasies atop each other, you arrive at a reality in which Trump has made a Great Deal to make Americans win again.

http://nymag.com/daily/intelligencer/2018/07/trump-created-european-trade-crisis-averted-by-fake-deal.html

Trump: ‘What You’re Seeing and What You’re Reading Is Not What’s Happening’

President Donald Trump defended his tariffs today in a speech to the VFW with multiple shots at the “fake news,” including a pretty remarkable line about how people shouldn’t believe any of it.

Trump said people shouldn’t “believe the crap you see from these people, the fake news” before defending the tariffs.

He talked about China, called the EU a “big abuser,” and then said, “But it’s all working out. And just remember, what you’re seeing and what you’re reading is not what’s happening.”

“What you’re seeing and what you’re reading is not what’s happening.”

You can watch Trump actually saying that above, via Fox News.

[Mediaite]

Reality

“The party told you to reject the evidence of your eyes and ears. It was their final, most essential command.”

—George Orwell

Dutch Prime Minister Tells Trump “No!” and That He Is Wrong on Trade

Dutch Prime Minister Mark Rutte has dispensed with diplomatic niceties during a joint press conference with U.S. President Donald Trump.

The routine White House discussion with reporters took a slightly passive-aggressive turn as Trump extolled the virtues of his plan to slap tariffs on steel and aluminum coming into the U.S. from the European Union.

Trump said he would discuss the dispute with EU officials before saying: “If we do work it out, that’ll be positive, and if we don’t, it’ll be positive also because…” before Rutte interjected by saying “No!”

“Well, just think about those cars that pour in here, and we’ll do something, right?” Trump replied.

But Rutte was not having it and said through gritted teeth: “It’s not positive,” adding, “We have to work something out.”

Trump then moved to shake the prime minister’s hand and the awkward interaction was over.

It showed the level of discontent among European leaders at Trump’s trade move,which he is threatening to apply to cars.The EU has threatened to retaliate  with tariffs worth $294 billion on a number of U.S. exports.

In a paper released this week, the European Commission said Trump’s tariffs would be “self-defeating and would weaken the U.S. economy.

“The European Union would therefore caution the United States against pursuing a process which could result in yet another disregard of international law, which would damage further the reputation of the United States and which the international community cannot and will not accept,” the EU report said.

There is domestic concern, too, with the U.S. Chamber of Commerce criticizing how Trump handled global disputes. It said that the tariffs he wants to impose could hurt the American economy. Trump is also threatening to impose tariffs on vehicles.

[Newsweek]

Trump rips Canada, NATO in Singapore tweetstorm

President Donald Trump started his day in Singapore on Monday blasting the Canadian Prime Minister and slamming NATO just after meeting with the U.S. allies at the G-7 meeting in Quebec.

“Fair Trade is now to be called Fool Trade if it is not Reciprocal,” Trump tweeted Monday morning in Singapore. “According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B. Tax Dairy from us at 270%. Then Justin acts hurt when called out!”

Trump was referring to Prime Minister Justin Trudeau in the tweet.

The president has accused Canada of taking advantage of American workers through their trade practices.

According to the U.S. trade representative, however, there was an $8.4 billion U.S. trade surplus with Canada on goods and services in 2017.

Trump also took aim at NATO for relying too heavily on the U.S. for their security.

“The U.S. pays close to the entire cost of NATO-protecting many of these same countries that rip us off on Trade (they pay only a fraction of the cost-and laugh!),” Trump tweeted. “The European Union had a $151 Billion Surplus-should pay much more for Military!”

The U.S. pays 22% of NATO’s budget — higher than any other nation.

The U.S. has pushed NATO member nations to spend at least 2 percent of their GDP — a benchmark some have been unable to meet.

Trump was in Singapore preparing for his meeting with North Korean leader Kim Jong Un.

“Great to be in Singapore, excitement in the air!” Trump wrote.

[New York Post]

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