Trump vs the judges. Trump vs the world

Trump vs the judges. Trump vs the world

Activist Judges

Further evidence that justice is not blind comes from Chuck Schumer who said “The good news here is, we did put 235 judges, progressive judges, judges not under the control of Trump, last year on the bench, and they are ruling against Trump time after time after time.” The republicans have for years bemoaned the “activist” judges. But the law is open to interpretation. If not, then all the rulings from the Supreme Court would be unanimous. Indeed, in the 2023-2024 term, 67 percent of the court’s rulings were unanimous – and this court is supposed to be one that is sharply divided. I wonder if this is a decided effort on the part of the Chief Justice? However, some issues like abortion and gun control will never find unanimity. It will be interesting to see whether we get a spate of 6-3 rulings on the appeals by Trump’s lawyers on the limits of executive power.

Trade

I wish Trump would get his figures straight. In almost every case involving trade he misspeaks. He always inflates the trade deficits. He said that the deficit with Canada was $200 billion. Actually, the trade deficit is half that and when the capital account is added – which accounts for services – the deficit falls to around $54 billion.

In fact, Trump always ignores the capital account and focuses only on the current account which tabulates goods imported and exported. Yet this country has transitioned from primarily a manufacturing economy to a services economy. Trump knows this but chooses to ignore it. Ironically manufacturing has maintained its percentage of GDP but doing so with fewer workers. Much like agriculture, technology is displacing workers. Yet unemployment in the once heavily manufacturing states has not significantly changed with the loss of manufacturing. The national unemployment average is 4.1%. In Pennsylvania it is 4.8%, 4.6 percent in Ohio but 3.3% in Michigan. Yet Colorado is 4.7%, California is 5.4% and Nevada is 5.8 percent. Who knew?

Trump should realize that manufacturing leaving developed countries for less developed ones is a trend that is historic. Manufacturing was once in the industrial northeast and migrated to the southern states. That trend still continues yet Trump has made no effort to stop companies from leaving New York, Illinois and California for Tennessee, Texas and Florida. But it is the same phenomena. If Trump really wanted to increase employment he should be doing all he can to stop the job killing and investment stifling regulations in many states. That will grow more jobs and create more investment than his tariffs ever will.

Trump rails about “unfair” tariffs. He points out the ones on dairy in Canada are 270%. But that only applies after US exports reach a certain limit set under the “free” trade agreement. Here is what Trump said during his first term “Fair Trade is now to be called Fool Trade if it is not Reciprocal. Tax Dairy from us at 270%.” In actuality Canada allows 64,500 metric tons of fluid milk into the country before it imposes the high tariff. That total has rarely been exceeded. Yet it makes for a good talking point. Yes I know that if Canada lifted the quota that the total would probably exceed the old limit. But that is an empirical question.

But still Trump conveniently ignores the capital account which is in surplus and concentrates on the trade account which is always in deficit. Makes for good political theatre. Now he is saying that the country will impose reciprocal tariffs. I am waiting to see how this is going to be done. The US tariff book lists over 17,000 items subject to tariffs. Is Trump going to go line by line or with just an average? When US tariffs are higher – like on pickup trucks where there is a 25% tariff – will they be lowered? And what is the end game? If it is “unfair” then reciprocal tariffs will eliminate that argument. If it is to eliminate the trade deficit, then no efforts, even zero tariffs, will address that problem given the size of the US economy vis a vis any country in the world.

Trump wants the EU to buy more American vehicles and agriculture. Yet most US vehicles are not compatible with European streets. As to agriculture, the Europeans do not trust our food which contains more artificial colorings and hormones than the Europeans allow. They have rejected our GMO produce and meat products. I remember when I was living in Germany and saw what they told me at the market was a chicken. It looked liked a shriveled up rabbit. So unless we can get them to eat unhealthy and clog up their streets with oversized vehicles all of Trump’s tariff threats won’t move the needle.