China trade deficit shrinks as deficit with EU hits record high

“the deficit in exports versus imports from China shrank to $345.6 billion, down about 18 percent from a record high level of $419.5 billion in 2018.

But the U.S. trade deficit in manufactured goods with all countries was relatively unchanged in 2019 at close to $1.048 trillion because importers turned to other nations after Trump hit China with tariffs ranging from 10 percent to 25 percent.

Some of the beneficiaries of that shift included Mexico, Vietnam, Taiwan, South Korea, Japan and members of the EU.

The trade deficit with the EU hit a record $177.9 billion in 2019, while the gap with Mexico was a record $101.8 billion”

“tariffs Trump has imposed on approximately $370 billion worth of Chinese goods have increased costs for U.S. manufacturers”

“That helps explain both the slowdown in U.S. manufacturing output and slight decline in the manufactured goods trade deficit in 2019”

“The U.S. usually runs a surplus in agricultural trade. However, that surplus shrank to $23 billion in 2019, from $26.5 billion in 2018, at least partly because of the retaliation that China and other countries on American exports imposed in response to Trump’s tariffs.”

“One bright spot in the trade report is the sharp drop in the oil and gas trade deficit, which fell to $29 billion in 2019, from $69.5 billion in 2018, because of increased U.S. production and exports.

The oil and gas trade deficit reached as high as $317 billion in 2008, but has fallen steadily over the past decade because of new production techniques.”

“Trump still is mistaken to believe that the trade deficit is driven primarily by unfair foreign trade practices or bad trade deals, economists point out. Instead, other factors, such as the size of the U.S. budget deficit and the strength of the U.S. economy play a much bigger role in dictating trade flows.

“The irony is the stronger the U.S. economy is compared to our major trading partners, like the European Union and China, the more likely it is the trade deficit will go up because we will have stronger demand,” Griswold said. “The vast majority of economists would say that’s perfectly fine, but it does put this administration in an awkward spot.””

The biggest lie in Trump’s State of the Union speech

“The bad news for people with preexisting conditions is that this “ironclad pledge” is a lie. Trump and his administration have fought hard — in all three branches of government — to strip people with preexisting health conditions of the protections they enjoy under the Affordable Care Act. Indeed, if Trump has his way, those protections will cease to exist.”

” In 2018, for example, it handed down a rule expanding the use of short term insurance plans to that do not cover many services, and that may exclude people with preexisting conditions.

The mere existence of these plans can drive up premiums for people with expensive preexisting conditions, because these skimpy plans will lure healthy consumers away from more generous plans.”

“In Congress, meanwhile, Trump supported legislation seeking to repeal Obamacare or drastically water down its protections. One bill backed by Trump, the American Health Care Act, would have allowed many insurers to charge higher premiums — potentially prohibitively high premiums — to patients with preexisting conditions.

Meanwhile, the Trump administration is currently asking the courts to repeal Obamacare almost in its entirety. If the courts ultimately embrace the administration’s position, that will mean that all of Obamacare’s protections for people with preexisting conditions will be struck down.”

Trump called on Congress to pass a drug prices bill. Democrats reminded him they already did.

“The House bill — H.R.3 — has a few mechanisms for reducing prescription drug prices, but most notably, it would allow the US health department to directly negotiate the prices it will pay for up to 250 drugs every year. The Congressional Budget Office (CBO) has estimated the bill would save Medicare up to $450 billion over 10 years because of those new negotiating powers. CBO has also projected about eight fewer drugs (out of an expected 300 over 10 years) would come to the market in the next decade because of the decrease in revenues for drug makers.

Despite Trump’s promises on the 2016 campaign trail that he would support proposals allowing Medicare drug negotiations, the White House threatened to veto the House plan. They called it a plan to institute government “price controls,” and said it would limit access to medicine, a favored talking point of the pharmaceutical lobby.

Even without this veto threat, H.R.3 is expected to be dead-on-arrival in the Senate. Senate Majority Leader Mitch McConnell has shown no interest in taking up the bill.”

“Instead, Trump has aligned himself more with Republican Sen. Chuck Grassley, who has advanced a narrower set of reforms from his perch as the Senate Finance Committee chair. (Grassley has also accused McConnell of sabotaging his bill, which moved out of Grassley’s committee with bipartisan support.)

His committee sent a bill to the full Senate in the fall, though it has languished there in the months since. It’s unclear if Trump’s quasi-endorsement — he did not call out Grassley’s bill directly Tuesday night, instead praising the senator generally for his individual work on the issue — will provide any new momentum for the plan. Grassley’s bill, as the Brookings Institution documented, achieves pricing reform through a mix of technical changes to the rebates that drug makers pay under Medicare and Medicaid as well as provisions to cap out-of-pocket drug costs for seniors.

Right now, neither of the bills seems on a fast track to anywhere. Part of this is because Trump’s interest in drug pricing has been scattershot at best, and many Republicans are reluctant to place too many new regulations on an innovation industry.”

The real state of the union

“If you didn’t know American politics had been turned upside down by Trump’s election win, nothing in the macroeconomic data would suggest that anything at all happened in January 2017”

“That’s not to deny Trump any credit. He made a sensible selection for Federal Reserve chair and has presided over a healthy dose of fiscal stimulus, and his trade policies haven’t been as disruptive as the most alarmist critics warn. But at the same time, his tax cuts haven’t delivered the kind of investment boom he promised, and in general, all his record-setting economic numbers are continuations of previous trends.”

“Under Trump, we have seen a sharp slowdown in net immigration that has helped reduce US population growth to a trickle. The foreign-born share of the population, however, is not falling despite the immigration crackdown because American women are also having fewer babies.”

“The number of babies women say they’d ideally like to have isn’t declining; we are just seeing the gap between ideal fertility and actual fertility get bigger and bigger each year. According to surveys, the main reason is the high (and growing) cost of child care — a problem that a “good economy” alone doesn’t fix, since child care is so labor-intensive.”

Donald Trump didn’t need the wall

“President Donald Trump has spent three years molding America’s immigration system to primarily be concerned with keeping people out.

He built, layer by layer, impediments in Central America, at the border, in detention centers, and in the immigration courts that have made obtaining asylum nearly impossible.

He swept aside former President Barack Obama’s immigration enforcement priorities in favor of vastly expanding immigration detention and prosecuting every immigrant who crosses the border without authorization. The result is a punitive system that treats immigrants as criminals and places them in prolonged detention even if they don’t pose any danger to the public.

And he waged a quiet and effective campaign to reduce legal immigration — including expanding his travel ban to block immigration from Nigeria, the largest country in Africa. Under Trump, the legal immigration system increasingly rewards skills and wealth over family ties to the US, while shutting out a growing number of people from low-income countries.

When Trump lays out the start of his reelection-year argument in the State of the Union address on Tuesday night, his guests will include a senior Border Patrol official and the brother of a man who was killed by an unauthorized immigrant. His immigration record is likely to be one of his top talking points.

It’s true that Trump has run into some roadblocks: He’s behind schedule on construction of the southern border wall, a key messaging tool for his base. He hasn’t been able to appoint his preferred candidates to lead the immigration agencies. His attempts to pass immigration-related legislation in Congress have failed. And his policies have faced so much opposition in the courts that his administration has appeared to pursue a strategy of rapidly churning out new policies and hoping that at least some of them survive judicial review.

But while he might not have succeeded at building an actual wall to keep immigrants out, his policies have achieved the same end.”

The Wall Isn’t Working

“about 130 feet of newly constructed border wall “fell on the Mexico side of the border, landing on several trees.” Evidently, the sections had not yet been set in a concrete foundation.”

“other sections of the border wall have huge holes, by design, to prevent flash floods from damaging it. Sources familiar with the wall designs tell the Post that the structure will act like a giant sewer gate during those periodic downpours, allowing water to pass through but causing rocks, trees, and other debris carried by the water to slam into it. To avoid potential damage, there 30-foot floodgates will be built into the wall, and the floodgates will be left open for months at a time during the rainy season.

John Ladd, a cattle rancher who has one such floodgate on his property—built into an older section of border wall constructed in 2008—tells the Post that he’s seen smugglers drive pick-up trucks through the openings.”

“Smugglers have already been spotted cutting holes in new sections of the wall, and there’s a long history of people gaining access to the United States by tunneling or catapulting their way in. More than 200 such tunnels discovered since 1990, and another one was found just this week near San Diego, California.”

“Most illegal immigrants to the United States don’t hop the border; they land at airports and then overstay their visas.”

Why Trump’s acquittal will damage US foreign policy

“That clear abuse of power for Trump’s own political gain led the Democratic-majority House to impeach the president. Afterward, the Republican-held Senate chose not to investigate further by declining to call any witnesses in its trial of the president and is expected to acquit him.

This means that, ultimately, the impeachment system designed to keep the top levels of the US government from descending into lawlessness has failed.

That, as former Estonian President Toomas Hendrik Ilves and others say, will make it harder for the US to tell other nations to follow America’s lead.”

“In an ideal America, Trump would receive a severe reprimand for abusing his power and his corrupt practices, like using the presidency to enrich himself and his family. Even if short of impeachment, Republicans could’ve placed severe political pressure on Trump by showing him their support has limits.

That’s not what happened. Instead, Trump’s party will be responsible for letting him get away with the Ukraine scandal basically unpunished.

He has been formally impeached, and that in itself is significant regardless of whether or not he’s removed from office, but given that no House Republicans voted for impeachment, Trump and his allies can argue (and have) that it was merely a partisan political ploy and not the serious rebuke for his behavior it is supposed to be.

It’s worse when considering one of the arguments Trump’s legal team has made: that a president can basically do whatever he wants in order to get reelected if he believes his reelection is good for the country.”

Susan Collins’s rationale for acquitting Trump aged poorly before she could even cast her vote

“Following a speech on the Senate floor on Tuesday in which she announced she’ll vote to acquit, Collins told Norah O’Donnell of CBS that she believes Trump “has learned from this case” and “will be much more cautious in the future.”

Getting impeached “is a pretty big lesson,” Collins said — the implication being that Trump will be chastened going forward from trying to pervert diplomacy into an opposition research opportunity, as he did with the Ukrainian government.”

“Trump has spent five months insisting that a phone call he had with Ukrainian President Volodymyr Zelensky that’s at the heart of his impeachment — one in which Trump implicitly linked military aid to Ukraine with the country helping him with investigations of his political rivals — is “perfect.””

“look at the circumstances surrounding the Zelensky call. It happened on July 25 — one day after special counsel Robert Mueller wound down his investigation of Trump by testifying to Congress and saying Trump could be indicted after his term for obstructing justice because of his interference with the Russia investigation.

But instead of responding to the end of the Russia investigation by cooling his jets, Trump was on the phone with the Ukrainian president the very next day trying to solicit political favors — the very same conduct that fueled suspicions about his Russia dealings in the first place.”

“Trump told reporters during an off-the-record lunch on Tuesday that, indeed, he doesn’t feel he has any lessons to learn from getting impeached.”

What Unites Republicans May Be Changing. Same With Democrats.

“Republicans on Capitol Hill are standing firmly behind Trump because GOP voters and GOP activists and elites are demanding that they do so. There just isn’t much room to break with the president of your party if close to 90 percent of voters in the party approve of him and many of those voters get their news from sources strongly supportive of that president.

Why are Republican voters and elites so strongly aligned with Trump? There’s not a simple answer, but I think identity — rather than ideology — is a big part of it. Trump is defending the identities of people who align themselves with the GOP, and this is a more powerful connection and reason to back him than pure ideological concerns. In defending Trump, conservative voters are really defending themselves.”

Trump’s Trade Deal With China Is Better Than a Trade War With China. But a $200 Billion Question Remains.

“As the “Phase One” name would indicate, this isn’t really an end to the trade war—in fact, nearly all the tariffs imposed by both the United States and China since hostilities commenced in July 2018 will remain in effect. Still, after 18 months of escalation and retaliation, the signing of a partial trade deal is a welcome sign that cooler heads have prevailed in Washington and Beijing.”

“the Trump administration does deserve credit for getting stronger protections for intellectual property into the deal, though it remains unclear whether those provisions can be meaningfully enforced. China has also agreed to make a series of changes to its financial services regulations that should allow competition from U.S. banks. That’s potentially more important than it might appear because it reduces the odds that the world’s two largest economies will fully de-couple from one another in the future.”

“the biggest part of the trade deal—a promise that China will boost its purchases of U.S. exports by $200 million over the next two years—should be viewed with skepticism.”

“Forcing China to buy more U.S. goods “directly contradicts the negotiating demand that China liberalize its economy and relax centralized control over trade and investment,””

“trade happens in an incredible diffuse way. It is the result of millions of individual decisions made by consumers and businesses every day. When “America” trades with “China,” what’s really happening is that some individual within America is trading with some individual inside China.
Or at least that’s how it should be. It’s true, of course, that China’s communist government retains considerable control over markets inside the country. But requiring China to buy more American goods isn’t the way to encourage more liberalization.”

“It’s also not clear whether China buying $200 billion of additional U.S. exports will actually add to overall American economic growth. It’s possible that China could simply buy up exports that would have otherwise gone to other countries. That outcome might reduce America’s trade deficit with China, but it wouldn’t boost U.S. exports overall or help grow American farms or manufacturing—yet another reason why Trump’s fixation on the trade deficit is counterproductive.”

“as long as Trump’s tariffs remain in place—there are no plans to lift them right now—they will continue to harm American manufacturing and be a drag on exports. Because tariffs raise the cost of manufacturing in the United States by taxing imported component parts, they have the added effect of making finished products more expensive, and thus less competitive on the global market. The Institute of International Finance estimates that the trade war has cost the U.S. about $40 billion in “lost exports.”

China agreeing to buy more farm goods and energy from the United States won’t fix those underlying issues. Unless the tariffs are lifted, Trump’s “Phase One” trade deal could end up helping China’s socialist regime tighten its grip on free markets while providing little to no relief for Americans.”