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Oh ! What A Lovely Trade War Summary

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Donald Trump made it very clear, whether it was NAFTA or the TPP, the US will no longer incur trade deficits just for the sake of its global image. In his piece, “Why the White House Worries About Trade Deficits,” Peter Navarro discusses why the Trump administration is right in addressing such trade deficits. In short, Navarro explains how uneven trade and heavy consumption of consumer imports has had an adverse effect on the US economy. Paul Krugman begs to differ. In his piece, “Oh! What a Lovely Trade War,” Krugman explains how trade policy is far more complicated than it seems. Krugman posits that Trump’s protectionist agenda is not a viable solution and that trade, as intended, benefits both the United States and its partners. I argue …show more content…

Trump’s base, as Krugman notes, welcomes the idea of a trade war with the expectation of the US coming out on top. Nevertheless, Krugman argues that trade wars are not the best scenario, because it may never happen in the first place. If the Trump administration was to pursue protectionist policies, it would just provide opportunities for other competitors; because in a game of consumers, the cheapest good wins. The US will have no part in a trade war or competition to begin with. Krugman explains that tariffs hurt the economy, because it spurs inflation and in response the Federal Reserve would raise interest rates, making the dollar stronger and hurting US exports. However, the past decade has shown that a stronger US dollar doesn’t necessarily translate to a decreased amount of exports. In fact, a stronger US dollar is a signal of economic growth and confidence, enabling the US to enhance trade and open new markets. Furthermore, the institutional fragility of the European Union has made the US an even more attractive exporter despite the increasing strength of the …show more content…

The strength of the international system, nonetheless, shouldn’t discourage the US from solving the problem of trade deficits. I argue that although the Trump administration is right in recognizing an issue with our trade deficits, blatant antagonism, as Krugman notes, is not the way to go about solving it. In the international arena, every action warrants a response and Trump’s rhetoric has encouraged China and the European Union to plan for a world without the

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A few years ago in 1807, congress had passed the Embargo Act, an act that forbids foreign trade. Today, a few years from that day in 1807 we look back on the preoccupations that have occurred because of the act. In just one year we saw our U.S exports decline by $84,000,000. We started with $109,000,000 and ended with $25,000,000.Thousands of Americans have turned to smuggling. The Embargo has trigger a serious Economic Depression and not much can save us right now.

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In his article, “Dude, Where’s My Policy?”, economist and columnist, Paul Krugman argues that the initial uproar and fear that many intellectual liberals felt immediately after Trump’s election should be abandoned on the basis of Trump’s lackluster domestic policy development. Krugman instead champions the idea that Trump will be an ineffective President. By minimizing the effect of Trump’s presidency on the long term political climate Krugman comforts an audience of his peers who fear the world that Trump’s presidency will create. Krugman begins his article with a comedic tone to express his frustration with Trump and establish camaraderie with his audience:“What Trump has done or tried to do over the past two years-wait it’s really only been two weeks?-is incredibly bad”(1). This statement also serves to introduce Krugman’s purpose.

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On Monday, May 5, 1930, In the New York Times Newspaper the front page stated “1,028 Economists Ask Hoover To Veto Pending Tariff Bill.” (See Appendix A). Economists saw flaws in this bill and wanted to put a end to it before it got worse, but that didn’t stop Hoover. Hoover called this bill “vicious, extortionate, and obnoxious” During the current period when the bill was passed, America had 4.3 million people without jobs. Two years later it skyrocketed up to 12 million.

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So, President Trump has two options: get his party to fall in line, or start toeing the party line. Currently, his stance on trade presents the clearest example of breaking party orthodoxy. Cast aspersions and firing ad-hominem attacks at your fellow Republicans (“little Marco,” “lyin’ Ted,” “low energy Jeb”). He should try to take the Freedom Caucus under his wing, not ostracize them. Take note of my tactics in constructing a new-age conservative coalition, an effort that started from my first time.

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Protectionism is coming to us from all directions, and numerous nations are using both direct and indirect barriers to trade, as when they require to do so. What economists mostly talk about are the threats of protectionism, rather than its benefits and how protectionism isn’t a long term solution. By now we have understood that protectionism, whether we like it or not, is used in certain economic situation by every other country, but it shouldn’t be seen as a permanent solution. Protectionism is a superficially convincing concept, because we can immediately point out the number of jobs saved, lesser no of imports etc. but it slightly more difficult to see the benefits of free trade in numbers, but one country’s protectionist policies will not just hurt their trading countries exports.

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