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Trump Nominates Non-Free-Trader Robert Lighthizer to Trade Office

Posted on January 4, 2017January 4, 2017 by Dave Johnson

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President-“elect” Donald Trump today announced his nomination of Robert Lighthizer for the cabinet-level office of US Trade Representative (USTR). Lighthizer, who served as deputy USTR under President Ronald Reagan, is known for criticizing Republican “free trade” ideology. Before serving in the Reagan administration he was chief of staff for the Senate Finance Committee.

Lightizer’s nomination signals that Trump is likely to oppose the wide-open “free trade” ideology and policy that ruled the last several decades, enriching the Wall-Street “investor” class while wiping out US-based industries like textiles and electronics manufacturing, devastating entire regions and communities like the “Rust Belt” and Detroit, as well as much of the American middle class.

But Lightzinger and Trump’s public positions are at odds with most of Trump’s nominees to other positions, most Republicans in Congress and with the billionaires, “investors” and giant corporations that usually line up behind and fund the Republican party. How will Trump handle the expected opposition from these elements of the Republican coalition? If Trump would give a press conference perhaps we could know more.

Meanwhile, according to Fox News, Trump said,

“Ambassador Lighthizer is going to do an outstanding job representing the United States as we fight for good trade deals that put the American worker first,” Trump said Tuesday in a statement announcing his pick. “He has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans. He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.”

Reuters reports that Lightizer has been fighting China’s unfair trade practices,

Lighthizer has argued that China has failed to live up to commitments made in 2001 when it joined the World Trade Organization and that tougher tactics are needed to change the system, even if it means deviating from World Trade Organization rules.

“Years of passivity and drift among U.S. policymakers have allowed the U.S.-China trade deficit to grow to the point where it is widely recognized as a major threat to our economy,” Lighthizer wrote in 2010 congressional testimony.

“Going forward, U.S. policymakers should take these problems more seriously, and should take a much more aggressive approach in dealing with China,” he wrote.

Lori Wallach Statement

Lori Wallach, director of Public Citizen’s Global Trade Watch, issued a statement on the expected nomination, and noted that it contrasts with most of Trump’s appointments so far, who have been public supporters of the Trans-Pacific Partnership (TPP) that Trump campaigned against,

“Lighthizer is very knowledgeable about both technical trade policy and the ways of Washington, but what sets him aside among high-level Republican trade experts is that for decades his views have been shaped by the pragmatic outcomes of trade agreements and policies rather than fealty to any particular ideology or theory. I don’t know that he would agree with progressive critics of our status quo trade policies about alternative approaches, but he also has had quite a different perspective on trade policy than the Republican congressional leaders and most of Trump’s other cabinet nominees who have supported the TPP and every past trade deal.”

Public Citizen’s press release continued,

President-elect Donald Trump has filled many top administration posts with proponents of the Trans-Pacific Partnership (TPP), a pact that Trump railed against during his campaign. Trump appointees who publicly advocated for the TPP include Wilbur Ross (Secretary of Commerce), Exxon Mobil CEO Rex Tillerman (Secretary of State), Gov. Terry Branstad (Ambassador to China), Gen. James Mattis (Secretary of Defense) and Goldman Sachs President Gary Cohn (Director of National Economic Council) – not to mention Vice-President-elect Mike Pence.

“Thankfully there was never a congressional majority for the TPP in the 10 months after it was signed so the TPP was dead before the election,” said Wallach. “But even so, most of Trump’s cabinet members will be inclined to grab the shovel from Trump’s hands before he can bury the TPP’s moldering corpse by formally withdrawing the U.S. as a signatory.”

Other prominent TPP supporters nominated to join the Trump administration include:
· Gen. James Mattis – TPP supporter named Secretary of Defense
· Gov. Rick Perry – TPP supporter named Secretary of Energy
· Rep. Ryan Zinke – Supporter of Fast Track for TPP named Secretary of Interior
· Rep. Tom Price – Supporter of Fast Track for TPP named Secretary of Health & Human Services
· Dr. Ben Carson – TPP supporter named Secretary of Housing and Urban Development
· Elaine Chao – TPP supporter named Secretary of Transportation
· Mike Pompeo – TPP supporter named CIA Director

Scott Paul: “A Great Pick”

Scott Paul, President of the Alliance for American Manufacturing (AAM), issued a statement saying,

“Robert Lighthizer is a great pick for U.S. Trade Representative. I am hopeful he will use his new role to continue to stand up for American workers and manufacturers who have been hurt by unfair trade.

“Mr. Lighthizer fought to secure antidumping and countervailing duties against foreign companies who were flouting U.S. trade law. This leveled the playing field for U.S. workers and saved middle class jobs. He also worked to open overseas markets for U.S. companies and served as a deputy U.S. trade representative during the Reagan administration — experience that will serve him well in his new role.

“Mr. Lighthizer’s selection as USTR — as well as that of Commerce Secretary nominee Wilbur Ross and Peter Navarro, the director of the new White House National Trade Council — is hopefully a signal that the incoming Trump administration intends to take on trade cheats like China, but the proof is always in the policy.”

Friends of the Earth: Lighthizer No Friend Of The Earth

Friends of the Earth Senior Trade Analyst Bill Waren isn’t so sure this is a good nomination:

Trump’s selection of Robert Lighthizer, a corporate lawyer and Republican political operative, to serve as the U.S. Trade Representative is another example of the revolving door between corporate lobby shops on K Street and the White House staff. Nothing in Lighthizer’s background suggests that he has any concern about the environmental and climate havoc resulting from trade deals like the pending Trade in Services Agreement. To the contrary, his clients include big oil, corporate agriculture, big pharma, and the insurance industry.

Lighthizer might be described as a paleo-conservative, in other words a throwback to another era. He is an admirer of the isolationist Robert A. Taft and the racist Jesse Helms. He will fit right in to the xenophobic culture of the Trump administration.

We’ll See

Trumps appointments have been sending mixed signals and Trump has been giving the public very little information on what to expect from his administration (and refusing to hold press conferences). But at least so far his trade appointments give the appearance of lining up with his campaign promises.

But watch out for this: Trump Trade Position Is Opposite Of What People Think It Is.

This post originally appeared on ourfuture.org on January 3, 2017. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

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February Trade Deficit Was Enormous, Humongous And Caused Job Loss

Posted on April 7, 2016 by Dave Johnson

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Dave Johnson The February trade deficit numbers are out. Exports were up but imports were up way more than exports. Result: We shipped even more jobs and wealth out of the country in exchange for stuff we could have made here. That means we also shipped out essential components of our manufacturing ecosystem, further harming our ability to make a living in the future.

The U.S. Census Bureau reported Tuesday that the February goods and services trade deficit was an enormous, humongous $47.1 billion. The February goods deficit was $64.7 billion, offset by an $17.7 billion services surplus.

“February exports were $178.1 billion, $1.8 billion more than January exports. February imports were $225.1 billion, $3.0 billion more than January imports,” their statement read.

Chinese imports accounted for 44 percent of the overall U.S. trade deficit and monthly exports to China ($8.05 billion) were the lowest since April 2011. “The deficit with China increased $1.0 billion to $32.1 billion in February. Exports decreased $0.3 billion to $8.4 billion and imports increased $0.8 billion to $40.5 billion.”

This Is Called “Trading”?

Again: in February we bought $40.5 billion worth of stuff from China but only sold $8.4 billion worth of stuff to China. This goes on month after month, year after year and we don’t do anything about it because it is making a few people really, really rich by driving American wages down. And that’s called “trade”? That doesn’t sound like they’re engaging in “trading” with us at all. It sounds like they’re getting away with a scheme to bankrupt us.

Alliance for American Manufacturing President Scott Paul commented on the trade deficit numbers:

“The trade deficit gives us some insight as to why so many manufacturing jobs have been shed over the past year, including 29,000 manufacturing jobs in March — and I worry the worst might be yet to come. The trade deficit with China continues to grow to new levels, and today’s numbers show that our trade weakness is not limited to China alone.”

These continuing enormous, humongous trade deficits are reflected in our country’s loss of good-paying jobs – especially manufacturing jobs. Last week’s post, “Jobs Report Highlights Trade, Manufacturing Problems,” discussed how our trade policies are driving jobs, factories, wealth, key components of our manufacturing ecosystem and overall ability to make a living out of the country,

In an otherwise OK jobs report, America’s manufacturing sector lost 29,000 jobs in March. This comes after a loss of jobs in February as well. So, no resulting upward pressure on wages.

Our country’s “deindustrialization” trade policies, which includes a “strong dollar” policy, are at the root of this problem. Also, our intentional lack of a national manufacturing/industrial/economic policy and plan hold back the growth of good-paying jobs and allow our manufacturing ecosystem to whither away.

Voters have certainly caught on that these disastrous trade policies, resulting in continuing enormous, humongous trade deficits, are driving jobs and wages away.

This blog originally appeared at ourfuture.org on APril 5, 2016. Reprinted with permission.

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Another Explanation Why Moving Jobs Out Of The Country Is ‘Good’ For Us

Posted on March 29, 2016 by Dave Johnson

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Dave Johnson On Monday, yet another “elite” pundit tells us that moving our jobs and factories and manufacturing ecosystem out of the country is good for us. This time it is Neil Irwin writing at the New York Times’ Upshot, “The Trade Deficit Isn’t a Scorecard, and Cutting It Won’t Make America Great Again.”

The U.S. has had trade deficits every year since the late 1970s, when Wall Street started advertising that “free trade” – moving jobs and factories out of the country — is good for us. Last year we had a goods and services trade deficit of $531 billion, $365 billion of that with China. But services ran a surplus, and if you only measure things we make, the goods deficit was $758.9 billion. On top of that the manufacturingtrade deficit was $831.4 billion, a 13.2 percent increase from 2014.

Imagine our economy if our manufacturers received $831.4 billion in new orders for things they make here. Imagine all the new factories opening, the hiring, the job-training centers, the suppliers booming, the stores near the factories booming, theirsuppliers booming, the taxes paid, and so on. Imagine the raises as employers competed for the workers they would need.

Again, we have had trade deficits every single yearsince the late 1970s, when “free trade” ideology was successfully sold to us. We move jobs and factories and manufacturing ecosystems (the expertise, suppliers, tools) out of the country to places where workers and the environment are exploited – because we were talked into letting that happen so that a few people could pocket the differential.

How were we bamboozled into letting that happen? The Irwin column is one more example.

Trade Deficits Are Good For Us?

Irwin writes:

…eliminating the trade deficit would not, on its own, make America great again, as Mr. Trump promises. And in isolation, the fact that the United States has a trade deficit does not prove that trade agreements are bad for Americans, a staple of Bernie Sanders’s campaign in the Democratic presidential primary. In fact, trying to eliminate the trade deficit could mean giving up some of the key levers of power that allow the United States to get its way in international politics.

Getting rid of the trade deficit could very well make America less great.

The trade-off: Getting rid of the trade deficit might make Wall Street less great because “we” can’t get “our” way telling other countries what to do … But it would mean American employers would have to compete for workers, bidding wages and benefits up.

Irwin continues, explaining even harder how moving jobs out of the country is good for us. Using the example of a trade deficit. Irwin says when there is a trade deficit we get more “stuff” and all the other country gets is our money. Again, last year we bought $831.4 billion more manufactured goods than we sold. Irwin explains this is a free lunch, we got stuff, and the only thing those other countries got was the money to hire millions of people and to maintain and modernize their manufacturing ecosystems, their country’s infrastructure and education.

Irwin explains this is also good for us because China then comes here and buys U.S. companies. “So does a trade deficit mean fewer jobs? It depends on which force is more economically powerful: fewer jobs creating exports or investment dollars flowing into the country.”

Note: In the above, “investment dollars flowing into the country” means buying our companies, land, production capacity, our ability to make a living, out from under us.

Reserve Currency

Irwin further explains the advantage of our trade deficits as being the necessary result of the U.S. dollar’s position as the global reserve currency, and therefore the underpinning of global finance. This is a key part of the equation to get:

There’s no doubt that maintaining the global reserve currency creates costs for the United States, namely a less competitive export industry.

But it also creates a lot of advantages. Lower interest rates and higher stock prices are among them (though they have the downside of also feeding debt-driven booms and busts). Even more important is what the dollar’s prominence in global finance does for America’s place in the world.

Summary: the tradeoff is lower wages for American workers but higher stock prices and low interest rates for America’s investor class. Less for the 99 percent and more for the 1 percent. Less for Main Street, more for Wall Street.

This chart, “Manufacturing vs. Finance as % of U.S. GDP” is from “Why Should We Save American Manufacturing?” by Michele Nash-Hoff. It shows how that trade-off has affected our economy.

Manufacturers and therefore workers used to have more power in our economy. Then Wall Street ascended, and here we are.

Advantages

There are, in fact, real advantages to the U.S. from our reserve currency status. Irwin explains,

It helps ensure that the United States can afford to finance wars, and it gives the government greater ability to fight recessions and panics. A country experiencing a banking panic will see money sent out of the country, causing its currency to fall and its interest rates to rise. All that limits a government’s options for fixing the problem. In 2008, when the United States experienced a near collapse of the banking system, the opposite happened.

But it’s not just economics. “A lot of the benefits of having the reserve currency are more on the foreign policy side than the economic,” said Jennifer M. Harris, a senior fellow at the Council on Foreign Relations and author of a coming book, “War by Other Means,” on the use of economic tools in foreign policy.

The centrality of the dollar to global finance gives the United States power on the global stage that no other country can match.

This is all for real and does bring positive results for all of us in various ways. But the power imbalances of Wall Street (capital) vs. Main Street (labor) have reached a point of excess where the power of our investor class has become so dominant over our working people that more and more Americans are struggling just to keep from falling behind – and failing. Ask an American voter if she or he would rather have some money for retirement, good schools, a good infrastructure and well-functioning public services, or a strong financial sector able to threaten countries with military force to get what they want. They’ll vote for retirement security, infrastructure and the rest every time. And they’re just about ready to, even if that promise comes in the form of Donald Trump.

This blog originally appeared at ourfuture.org on March 29, 2016. Reprinted with permission.

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China’s Currency Manipulation: Flipping Off America

Posted on September 21, 2010 by Leo Gerard

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Leo Gerard China is disrespecting America.

The Asian giant is an international trade outlaw, and U.S. manufacturers and workers are its crime victims.

China illegally subsidizes its export industries and unlawfully manipulates its currency. That kills U.S. industry and destroys U.S. jobs. Earlier this year, the Obama administration asked China nicely to allow its currency value to float up naturally on international markets. On June 19, China said it would.

And then it didn’t.

That’s flipping the bird at America.

Before China’s June 19 promise, bipartisan groups of lawmakers in the U.S. House and Senate proposed legislation that would force the U.S. Treasury Department to even the score and to call China out for what it is: a currency manipulator. Hearings on the bills are being conducted this week.

Pass the legislation. It’s time for America to flip the bird back.

Negotiation and threats have failed to produce a sustained, substantial currency float by China. Now, the Chinese currency, the renminbi, is undervalued by as much as 40 percent, a figure accepted by conservatives like C. Fred Bergsten of the Peterson Institute for International Economics. Even the International Monetary Fund managing director said the currency is undervalued.

China simply denied it. In March, the Chinese premier, Wen Jiabao, said he did not believe the renminbi was undervalued. That’s flipping off the world.

It works like this: China prints renminbi to buy billions of U.S. dollars, which makes them appear more desired and valuable, and the renminbi, by contrast, less valuable. That undervaluation of the renminbi acts as a subsidy for Chinese exports, artificially making them as much as 40 percent cheaper when sold in the U.S. Conversely, it acts as a tax of as much as 40 percent on American-made goods sold in China.

This dynamic contributed significantly to the rise of manufacturing in China. Earlier this year, China surged past Japan to become the world’s second-largest economy. And it contributes significantly to America’s massive trade deficit. The gap in July was $42.8 billion, more than half of which — $25.9 billion — was a result of trade with one country – China.

China’s rapid economic growth has ended poverty for millions of its workers. Here in the United States, however, China’s flouting of international trade law is destroying the lives of millions of workers. The Economic Policy Institute estimates that 2.4 million American jobs have been lost or displaced since 2001 as a result of the trade deficit with China. American workers celebrate their Chinese counterparts’ improved quality of life, but they condemn the government of China for accomplishing that with beggar-thy-neighbor trade practices.

Earlier this year, it briefly looked like threats would prompt China to act. In March, a bipartisan coalition of U.S. Senators introduced legislation specifying the factors necessary to label a country as a currency manipulator and detailing American reprisals. And in April, the Treasury Department delayed its report identifying countries that manipulate currency rates, suggesting that it was ready to take on China.

China appeared to respond to that pressure in June. It announced it would allow the renminbi to float toward its real value on the open market. The Treasury Department backed off, omitting China from its list of currency manipulators in July.

China then permitted the value of the renminbi to rise less than one percent. One percent. When it’s as much as 40 percent undervalued. That’s flipping the bird at America. Big time.

Still, America didn’t react.

On Aug. 25, the Commerce Department announced 14 new measures to crack down on trade violations, such as ending certain exemptions from duties.

It did not, however, mention currency manipulation.

Dan DiMicco, CEO at Nucor Corp., the largest U.S. steelmaker, said the 14 measures are important, but the problem with China won’t be resolved until the United States takes on currency undervaluation. Here’s what he said:

“As long as we continue to let them get away with it, they’ll keep doing it.”

Six days later, in a trade case filed by the U.S. Aluminum Extrusions Fair Trade Committee, a coalition of domestic manufacturers of aluminum extrusions and the USW, the Commerce Department again squirmed out of dealing with currency manipulation.

Commerce imposed import duties on Chinese aluminum companies because China unfairly subsidized $514 million in aluminum exports to the U.S. in 2009. But Commerce refused to investigate the Fair Trade Committee’s evidence that China’s currency manipulation functions as an additional illegal export subsidy.

Sen. Chuck Schumer of New York, a sponsor of currency manipulation legislation, said afterward:

“The Commerce Department made its finding while still managing to ignore the elephant in the room, which is China’s currency manipulation.”

Commerce and Treasury have decided the proper response to China flipping off America is averting their eyes. See no evil.

Yesterday Japan followed China’s lead. It bought dollars and sold yen, decreasing the value of yen and increasing the value of dollars. This, the New York Times explained, was “a bid to protect its export-led economy.” That’s exactly what China is doing.

It’s a very public show of contempt for international regulations and for American citizens.

Normally, Americans don’t respond passively to contempt. Be normal, America.

About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.

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Tag: trade deficit

Trump Nominates Non-Free-Trader Robert Lighthizer to Trade Office

February Trade Deficit Was Enormous, Humongous And Caused Job Loss

Another Explanation Why Moving Jobs Out Of The Country Is ‘Good’ For Us

China’s Currency Manipulation: Flipping Off America

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