The Trade War Drove American Automaking Jobs to China as Tariffs Stalled U.S. Exports

“China had become the second-largest export market for American-made cars by 2017, the last full year before Trump’s trade war began. After a series of tit-for-tat tariff increases between the U.S. and China, however, American automotive exports to China fell by more than one-third. Higher tariffs on imported car parts from China raised costs for automakers in America, while China’s retaliatory tariffs on American-made cars hiked prices and reduced demand in China.

To avoid those costs and to evade increased uncertainty, some carmakers began shifting their supply chains—but not in the direction the White House was hoping.

BMW, for example, shifted much of the production of its X3 sport-utility vehicle from Spartanburg, South Carolina, to China after reporting that tariffs had cut the company’s American profits by about $338 million in 2018. The higher costs imposed by the trade war caused Tesla to announce that it was “accelerating construction” of a new plant in Shanghai.

Overall, the number of American automating jobs peaked in September 2018, shortly after Trump’s trade war began, and then declined during 2019 and 2020.

The signing of the “phase one” trade deal with China did little to stop or reverse those shifts. Even though China pledged to increase its purchases of American-made vehicles and car parts as part of the agreement, exports are still lagging well behind their pre-trade war totals, according to the PIIE report.”

“Trump believed that hiking tariffs would reduce America’s imports from China, allowing the gap between the value of those imports and the value of America’s exports to fall. What he failed to grasp, however, is that many of those imports—especially when it comes to manufactured goods—are materials necessary for making the items that American companies end up exporting back to China: like cars.

Higher costs imposed on imports ended up slowing American exports—and thus the trade deficit actually grew. Meanwhile, companies could avoid the cost of Trump’s tariffs by shifting production out of the United States, and some chose to do that.

Biden, so far, seems unwilling to remove Trump’s tariffs. By announcing a misguided “Buy American” policy for government procurement, Biden is also expanding on some of the Trump administration’s protectionist manufacturing policies.

If the past few years are any indication, all Biden will likely accomplish by this is to further erode America’s industrial base by trading away automaking jobs in exchange for the appearance of “toughness.””

US ratchets up pressure on Myanmar’s military after its bloodiest weekend since the coup

“The Biden administration is stepping up its actions to punish Myanmar’s ruling military junta in the wake of a bloody weekend targeting civilians protesting against the February military coup.

On Saturday, the military commemorated Armed Forces Day by killing about 140 people — including six children — in 44 cities and towns amid nationwide peaceful protests, according to local reports and activists. One of the children, 11-year-old Aye Myat Thu, was buried with her drawings and toys as her family mourned beside her.

Thousands of people also fled into neighboring Thailand to escape the violence.

It’s the largest number of people killed in a single day since the military ousted the country’s democratic government in a February 1 coup. Some 500 people have been killed in total since the military seized control.

Pressure from the international community on Myanmar’s military to relinquish control has been growing, with the United Nations special rapporteur for the country recently calling the junta’s campaign “mass murder.””

“On Monday, US Trade Representative Katherine Tai announced that the Biden administration would “suspend all US trade engagement” with Myanmar that occurs under a 2013 bilateral trade agreement. That won’t stop all $1.4 billion in trade between the two countries, but it will curb the trade relationship, namely by ending US support for initiatives that helped Myanmar integrate back into the world economy.

That may not seem like much, but experts on Myanmar’s conflict like Cornell University’s Darin Self say the move “will sting” because “cutting off trade is meaningful.””

Biden, Democrats Are Locking in Trump’s Tariffs

“The Trump administration was able to reshape America’s trade policy in large part because it simply decided to ignore anything that punctured its manufactured reality about how tariffs work.

Economic data show that American businesses and consumers—not China—are overwhelmingly paying the cost of the tariffs? Send Peter Navarro out to do some television hits where he baselessly claims otherwise.

Thousands of American companies are lining up at hearings to explain why the tariffs would hurt their bottom line? Give Wilbur Ross a can of tomato soup and let him explain that those added costs are actually no big deal.

Farmers are getting gutted by the trade war? Send them fat checks, deny that your policies were to blame, and inadvertently create a new, expensive aid program that will be politically difficult to unwind.”

“the Biden administration seems determined to keep the circus going a while longer. Take, for example, Commerce Secretary Gina Raimondo doing her best Navarro impression during an interview earlier this month with MSNBC. Asked about whether the Biden administration would roll back the Trump tariffs on steel, aluminum, and other goods from China, Raimondo argued that “the data shows that those tariffs have been effective.”

Have they? Raimondo was careful to avoid saying exactly what the tariffs have been “effective” at accomplishing, but the actual data would suggest the answer is not much—except, of course, raising prices for American businesses and consumers.”

“The fundamental problem is the same one that Trump, Navarro, Ross, and others spent the past few years trying to hand-wave away: Tariffs simply create more losers than winners. The U.S. steel industry, for example, employs about 141,000 workers. But there are more than 6 million workers in manufacturing businesses that consume steel. The tariffs are meant to protect the former group by imposing higher costs on the latter, much larger group.”

“Through its first 50 days in office, the Biden administration has given no indication that it is interested in providing relief to American businesses beset by Trump’s tariffs. If anything, Democrats in the White House and Congress appear to be entrenching those policies.”

Why a global chip shortage is screwing up America’s pickup trucks

“Just 12 percent of global chip manufacturing is now based in the US, compared to the 37 percent share that the country had in 1990, according to research SIA conducted with the Boston Consulting Group. The primary reasons for this decline are, according to UCLA supply chain professor Christopher Tang, the low cost of production in other countries and chemical processes with less stringent regulation abroad.

“We never had a coordinated plan, meaning these are free markets. So any companies can ship anything outside the country,” Tang explained. “So now is a wake-up call. We have shifted virtually everything, so now it’s an empty vault.”

There are many ideas for how to boost high-tech manufacturing in the US. Some, like Tang, say that part of the key is boosting the number of US students who study STEM and creating more high-tech jobs in the field. Another strategy up for consideration is beefing up US “industrial policy,” which would have the government take a more active role in encouraging high-tech industries in the US, whether through tax benefits, direct investment in research, or government subsidies. In his presidential campaign, Biden even proposed wielding the government’s power to buy these supplies directly from US manufacturers. Now with his supply chain review, Biden appears to be taking a first step toward pursuing that goal.”

“In part, a Biden administration official told Politico, the goal is to ensure that the US isn’t too reliant on other countries and to make US-based supply chains more resilient. In his executive order calling for a review, Biden mentioned everything from another pandemic to a cyberattack to “climate shocks and extreme weather events” as examples of crises that could make it more difficult to get much-needed supplies in the future.”

“Following the supply chain review, the goal isn’t necessarily that the US produces all or even most of a particular product or its subcomponents, experts told Recode. Instead, it’s about making sure the country has stockpiles; coordinated supply chains of needed supplies and components from different parts of the world; and enough domestic manufacturing to ensure the US can weather another crisis.

But the task of building new high-tech manufacturing in the US would be a tall order.”

Biden Administration Affirms Support for Protectionist Jones Act, Throwing Hawaiians, Puerto Ricans to the Sharks

“Biden made it abundantly clear that he supports the Jones Act, a 1920 federal law that requires that cargo ships traveling between American ports be made in America and owned and crewed by American citizens”

“The Jones Act is an absolutely terrible law, designed purely for protectionist measures, that shields maritime companies and unions in the United States from competition. The consequence of the Jones Act is that a foreign commerce ship that goes to states like Hawaii or Alaska or to territories like Puerto Rico can engage in domestic trade in only one American port. It can travel to other American ports but cannot take on or deliver goods unless it goes to a foreign port and then returns. A vessel from Japan that’s heading to Los Angeles cannot also stop in Hawaii along the way and engage in commerce, despite the logical economic efficiencies in doing so.”

“The end result of this restrictive law is that only two percent of U.S. freight is transported by sea, despite our long coasts, our many ports, and island states and territories. It’s in part why we have to depend so much on trucks and trains for transporting goods, even along coastal regions. Cato notes that internal shipping is about half the volume it was in 1960, while rail and truck commerce both saw dramatic increases.

Nowhere are the burdens of the Jones Act more apparent than in places like Hawaii and Puerto Rico. These restrictions distort market forces and significantly drive up the costs to transport goods to these places. The New York Fed calculated that it can cost twice as much to ship something from the American mainland to Puerto Rico as it does to nearby island nations like Jamaica. Puerto Rico actually imports jet fuel from other countries rather than the Gulf Coast because it’s just too expensive to get Jones Act-compliant vessels.

There’s no need to exaggerate the impact of the Jones Act on domestic transport costs because whenever a disaster comes around, like Hurricane Maria in Puerto Rico in 2017, the government will temporarily waive the Jones Act’s requirements so that the costs of recovery aren’t quite as back-breaking.”

“”Among the obstacles to Jones Act reform is the complex web of special interests that benefit from preservation of the status quo. Among Jones Act supporters are U.S. shipbuilders, merchant mariners, various maritime unions, and those who actually believe the law is essential to national security.””

Assessing Trump’s Experiment With Protectionist Trade Policies

“Early on in his administration, Trump raised tariffs. The Cato Institute’s Scott Lincicome describes the president’s trade war as having “implemented five different tariff actions on almost $400 billion in annual U.S. imports (as of 2018) under three different laws with different rationales: ‘safeguards,’ ‘national security,’ and ‘unfair trade.'” We were promised ever-more jobs thanks to the tariffs. But as numerous academic studies have shown, the people who shouldered nearly all of the burden of these import taxes were not foreigners but, rather, Americans.

Protectionism reduces the overall wealth of the nation. Aside from a few favored and protected producers, Americans, in general, are made poorer. Consumers have to spend a higher share of their incomes to buy goods that they could otherwise get for less. As a result, ordinary Americans save less and have less to spend—even on nontariffed goods and services. The American producers of goods that use tariffed foreign inputs also see their production costs driven up, which drives their ability to compete down.

Unsurprisingly, the administration’s belligerent trade policies disturbed our trading partners. They retaliated with their own tariffs on American exports (to the detriment of their consumers). Adding insult to injury, the president’s erratic behavior, threats, and contradictory tweets about his trade policy likely spooked investors. The overall uncertainty and negative effects of the trade disputes surely dampened the beneficial effects of the president’s few good fiscal policies and regulatory reforms.

Take, for instance, the corporate income tax reduction as part of the Tax Cuts and Jobs Act of 2017. This reform should attract to the United States much foreign direct investment, or FDI. Yet, FDI flows into the United States were 10 percent lower in 2019 than during the two previous years. Simeon Djankov and Eva Zhang of the Peterson Institute for International Economics recently looked into the fall of FDI flows into the United States. “It is likely that the positive effect of the corporate tax cut in attracting FDI to the US,” they concluded, “was outweighed by trade disputes and threats of withdrawal, as well as actual withdrawals, from international treaties and organisations, which may have scared investors away.”

As for trade treaties, the Trump experiment is one that I hope we won’t repeat. First, he impulsively withdrew the United States from the Trans-Pacific Partnership, a multilateral trade agreement designed to oblige China to behave better on trade while opening up a large free-market zone with other Asian nations.

Trump renegotiated the North American Free Trade Agreement with overall negative net impacts, thanks to an anti-growth minimum wage and increased domestic content requirements. And he moved to extend high tariffs on Korean trucks as part of the one-sided reform of the George W. Bush-era U.S.-Korea Free Trade Agreement, to the detriment of U.S. consumers.

Finally, the president inflicted serious damage to the World Trade Organization—the great arbitrator of all international trade disputes—on the specious claim that the organization wasn’t sufficiently deferential to the United States. Here’s how Lincicome sums it up: The administration chose “to shut down the organization’s appellate body (basically the supreme court of trade dispute settlement) instead of negotiating new and necessary reforms in good faith (e.g., by teaming up with like-minded countries while offering actual concessions on longtime irritants like U.S. agricultural subsidies and ‘trade remedy’ rules).””

EU trade chief warns Biden over ‘Buy American’ push

“U.S. President Joe Biden has already started tightening U.S. rules that force federal authorities to buy from American suppliers. This could run foul of Washington’s commitments at the World Trade Organization (WTO), under which it wins access to other countries’ public procurement markets in exchange for keeping its own market open.

While signaling the EU was worried about Washington’s steps, Dombrovskis stopped just short of saying Biden was breaking WTO rules.

“As regards Buy American, this is something which will require some more in-depth assessment, what are the exact implications, what are the implications for EU companies, what does it mean for U.S. commitments in the WTO framework,” Dombrovskis said.”

Why Trump lost his battle against the trade deficit

“the U.S. trade gap is on track to exceed $600 billion this year. That would be the highest since 2008, just before the global financial crisis.

The monthly deficit in U.S. goods trade with all other countries set a record high in August at more than $83 billion.

Trump has blamed the trade deficit on bad trade deals negotiated by his predecessors and unfair trade practices by other countries, but most economists disagree with that explanation.”

“A variety of factors contributed to Trump’s failure to eliminate the trade gap, which White House trade adviser Peter Navarro predicted in 2016 could be erased in one or two years.

Overall trade remains depressed compared to year-ago levels because of the coronavirus pandemic.

But the massive U.S. government stimulus payments to businesses and consumers have helped U.S. imports recover faster than U.S. exports. That explains why the monthly goods deficit has increased from the average level of $73.3 billion in 2019.

However, even without the pandemic, Trump’s practice of piling tariffs on China and selected other products like steel and aluminum was never going to turn around the deficit, most economists agree.”

” The large U.S. trade deficit is fundamentally driven by larger economic factors — like the fact Americans spend more than they save and have to borrow from abroad to finance the difference”

“Trump’s $1.5 trillion tax cut in 2017 contributed to that problem by running up the U.S. budget deficit.”

“Looking at trade in 2019, the last full year of data, the overall U.S. trade deficit fell by less than 1 percent from the previous year to $577 billion. However, the bilateral trade deficit with China fell by a much more impressive 17 percent to $345 billion as importers turned to other countries such as Mexico, Vietnam, Taiwan, South Korea, Japan and members of the EU.”

““We would say one of the big failures of the Trump administration with respect to trade policy is the failure to address currency misalignment in any kind of meaningful way,” said Thea Lee, president of the Economic Policy Institute, a left-leaning think tank aligned with union groups. “Putting a couple of sentences into the deal, but without a clear road map as to how it’s going to be instrumentalized, doesn’t really do very much.””

“Trump’s revised NAFTA agreement with Mexico and Canada does include strong protections for workers rights, which helped the pact win overwhelming approval in the Democratic-controlled House. But the fact that labor concerns were not addressed in the China agreement “just shows that the Trump administration is not driven by any principles in this area, but simply by political expediency,” Lee said.

The administration hails China’s agreement as part of the phase one trade deal to purchase $200 billion more of U.S. goods and services in 2020 and 2021, compared with the record it set in 2017.

But the data released on Tuesday shows that China is well behind on that goal. During the first eight months of this year, it had imported just $69.5 billion worth of U.S. farm and manufactured goods, compared to $80.2 billion in the same period in 2017.

U.S. farmers were hit so hard by Trump’s tariff war with China that his administration doled out more than $20 billion in emergency aid payments to help cushion the blow.

U.S. farm exports to China had reached as high as $25 billion annually a few years before Trump was elected. But they plummeted to $6.8 billion in fiscal 2019 after Beijing retaliated against Trump’s tariffs by raising its own duties on U.S. farm exports.”

Trump’s Trade War Made the Pandemic Worse, and Nationalism Will Slow the Recovery

“For Trump, Navarro, and the other neo-nationalists increasingly setting policy for the post-2016 Republican Party, America’s modern problems mostly stem from goods and people coming across the country’s borders. If a problem can’t be blamed on immigration, it probably will get blamed on trade. Sometimes both. And the neo-nationalists weren’t about to let the coronavirus crisis go to waste.

“If we learn anything from this crisis,” Navarro said in April, “it should be: Never again should we have to depend on the rest of the world for essential medicines and countermeasures.”

This framing sounds like simple electoral politics. The Republican Party hopes to use the pandemic as an opportunity to double down on Trump’s “get tough on China” message that helped deliver key Rust Belt states in 2016.

But it’s more than that. Protectionism is now infecting the GOP to a degree that may be difficult to excise when the Trump era ends. Leading Republican lawmakers such as Sens. Josh Hawley (R–Mo.) and Marco Rubio (R–Fla.), who have been cheerleading Trump’s misguided tariff policy for years, are already positioning the coronavirus as an excuse to use federal power to reshape global trade. Even some formerly anti-Trump conservatives have been swayed into backing a nationalist vision of an America that must stand up to China or be swallowed by it. The COVID-19 outbreak has served only to confirm their fears.”

“The right’s increasingly vocal trade skeptics have taken advantage of a crisis to advocate a national industrial policy designed not only to decouple the United States from the global trading network but to put America on dangerous Cold War–like footing with one of its biggest trade partners. In doing so, they’re pushing ideas that will leave America less prepared for the next pandemic—and have already left us less able to handle this one.”

“Data from the World Trade Organization (WTO) show that over the past three years—both before and during Trump’s trade war with China—American consumers and businesses imported an average of $13.5 billion per year in medical supplies from China. That’s good enough to put China in fourth place, behind Switzerland ($15.5 billion annually, on average), Germany ($19.6 billion), and Ireland ($27.9 billion). America imported less than half the value of medical supplies from China in 2019 as it imported from Ireland, yet you probably didn’t hear many politicians and media personalities grandstanding about an overreliance on Irish manufacturing.

Meanwhile, an April report from the St. Louis Federal Reserve found that 70 percent of essential medical supplies consumed in the United States in 2018—including gloves, hand sanitizer, masks, and other key coronavirus-fighting stuff—were produced in the United States.”

“In February, the Food and Drug Administration (FDA) touched off a brief panic with a statement warning that the coronavirus outbreak in China could disrupt supply chains and lead to a shortage of drugs in America. The neo-nationalists pounced. In a February letter to the FDA, Hawley called America’s supposed dependence on Chinese-made drugs “inexcusable.” Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2.3 trillion aid bill passed by Congress and signed by Trump in March, calls for the Department of Health and Human Services to develop “strategies to…encourage domestic manufacturing” of pharmaceuticals. By May, the Trump administration had approved a $350 million grant for a little-known Virginia company that promised to make drugs in the United States. “This is a great day for America,” Navarro proclaimed at a press conference.

In the rush to throw taxpayer money at the problem, the White House didn’t wait to see if a problem actually existed. On June 2, an FDA official testified that the agency had found no evidence of shortages of drugs caused by foreign governments restricting exports.

The truth is that America’s global supply lines for pharmaceutical drugs are actually quite diverse and resilient. There are roughly 2,000 manufacturing facilities around the world authorized by the FDA to produce active pharmaceutical ingredients for American consumers; only 230 of those are in China. Some 510 are in the United States, and 1,048 are in the rest of the world. The supply chains for the 370 drugs on the World Health Organization’s list of “essential medicines,” which includes “anesthetic, antibacterial, antidepressant, antiviral, cardiovascular, anti-diabetic, and gastrointestinal agents,” are similarly global: 21 percent of production facilities are in the United States, with 15 percent located in China and 64 percent located somewhere else.”

“As president, Trump has charted a go-it-alone strategy that emphasizes brute power over diplomatic finesse and that sees trade as a means by which other countries take advantage of the United States. Shortly after taking office in 2017, he yanked the United States out of the Trans-Pacific Partnership (TPP), a 12-nation trade agreement that was widely seen as the best way to put pressure on China to change some of its unacceptable behaviors. Instead of that multilateral effort, Trump sought a one-on-one confrontation that attempted to use tariffs to bully China into changing its ways. But his trade war has so far produced only meager results.

A “phase one” agreement signed in December 2019 did nothing to offset the huge costs to both economies of the tariffs the two countries have raised against one another. And the one big “win” secured by Trump—a promise that China would buy more American agricultural goods—seems unlikely to materialize in the face of a global recession.

That lone policy victory has been offset by numerous tangible losses. Since 2018, Trump has imposed tariffs on steel, aluminum, solar panels, and washing machines. Other tariffs have been aimed at roughly $300 billion in annual imports from China—covering everything from industrial equipment to children’s toys. All together, those tariffs have sucked an estimated $80 billion out of the U.S. economy, according to an estimate from the Tax Foundation, a nonpartisan tax policy think tank.

The tariffs have also imposed a human toll, one that became more obvious during the coronavirus outbreak.

“Any disruption to this critical supply chain erodes the health care industry’s ability to deliver the quality and cost management outcomes that are key policy objectives of the country,” Matt Rowan, president of the Health Industry Distributors Association, told the Office of the U.S. Trade Representative at a hearing back in August 2018.

At the time, the administration was weighing whether to include products like hand sanitizer, thermometers, oxygen concentrators, surgical gloves, and other types of medical-grade protective gear in the list of Chinese-made items to be subjected to new tariffs. Rowan emphasized that such supplies were “essential to protecting health care providers and their patients” and would remain “a critical component of our nation’s response to public health emergencies.”

The most instantly noticeable effect of Trump’s tariffs was to increase the price of goods imported from China, including medical equipment. Importers would have no choice but to “almost immediately” pass along those price increases to “hospitals, surgery centers, long-term care facilities, individual consumers, and government programs who purchase our products,” Lara Simmons, the president of Medline Industries, one of the largest medical supply companies in the United States, said during a June 2019 hearing on the tariffs.

But the Trump administration went ahead with the tariffs anyway. Imports of medical equipment from China fell after the tariffs were imposed, and imports from other parts of the world did not increase enough to make up the difference. It’s likely that hospitals and other health care providers were drawing down on existing inventories and hoping the trade war would end before they had to restock, says PIIE’s Bown, who has analyzed changing supply chain patterns in the last few years.

Trump finally lifted tariffs on medical equipment after the pandemic struck. Unfortunately, the administration did nothing to remove tariffs on chemicals used to manufacture disinfectants and antiseptics—items that will be in even higher demand as the economy reopens.

“The tariff is making it more difficult for companies to supply our nation’s essential workers with antiseptics and sanitizing products they need to protect themselves and others from COVID-19,” says Chris Jahn, president and CEO of the American Chemistry Council.

As the COVID-19 body count rose, Trump blamed China for making things worse by lying about the seriousness of the situation in December and January. The Communist regime in Beijing does deserve scorn for misleading the world about the pandemic’s true nature during the early days of the outbreak. But Trump is far too eager to deflect blame from how his own policies weakened America’s preparedness for the disease—and from how they might have made things much worse.”

“When the coronavirus outbreak hit, 3M sprang into action: The company doubled its global production to 100 million N95 masks per month, with 35 million of those made in America. In early April, the company’s CEO, Mike Roman, announced additional investments in mask-making capacity that will allow the company to produce 50 million N95s in the U.S. by June. For that remarkable mobilization of private capital and workforce productivity in the face of a deadly pandemic, 3M earned scorn from the economic nationalists in the White House.

When Trump signed the executive order implementing the Defense Production Act on April 3, he issued a blistering statement accusing “unscrupulous brokers, distributors, and other intermediaries” of operating like “wartime profiteers” simply for selling goods to buyers in other countries. “This conduct denies our country and our people the materials they need to win the war against the virus,” Trump said. Though the formal statement did not mention 3M specifically, Trump was less diplomatic on Twitter. “We hit 3M hard today,” he wrote in a follow-up tweet, as if the company’s Minnesota headquarters were a newly discovered terrorist training ground. “[They] will have a big price to pay!”

What was 3M’s alleged crime against America? Daring to sell face masks to distributors in Canada.

Set aside the belligerence of the president’s remarks, and there is an intuitive appeal to what he’s arguing: America is facing a pandemic, the thinking goes, and we can’t afford to let go of necessary supplies—not even to a close ally like Canada. It’s every nation for itself. Shouldn’t Americans have those masks instead?

But 3M didn’t stand for the president’s shaming. In a statement, the company noted that in order to meet Americans’ needs it was importing more masks than ever from its production facilities in China. “Ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done,” 3M said. “If that were to occur, the net number of respirators being made available to the United States would actually decrease.”

The knockout blow was 3M’s revelation that its American mask production facilities rely on a special wood pulp imported from—yes—Canada. It was an incident that perfectly captured the myopia of Trump’s anti-trade agenda.”

“in 2019, the U.S. imported more than $6 billion worth of PPE from around the world. If everyone followed the logic of “every country for itself,” America would end up with a net loss of equipment totaling nearly $5 billion. This year, the gap would probably be even larger, as production everywhere has increased in response to the pandemic.”

“As a practical matter, it is obvious that the United States would be less capable of responding to the immediate COVID-19 crisis if it stopped trading with the rest of the world. “Re-shoring to America does not imply supply chain resilience,” Bown says. “In a pandemic, excessive reliance on anyone (including yourself) is bad.””

“The Swiss medical supply outfit Hamilton Medical, for example, ramped up production by 50 percent in response to the outbreak in Europe. But then the company hit a snag. A key component of its ventilators came from Romania, a member of the European Union. Because the E.U. had imposed export restrictions on medical equipment and component parts, Hamilton Medical’s suppliers could no longer ship their wares to Switzerland, which is not an E.U. member.”

“”We shouldn’t have supply chains. We should have them all in the United States,” Trump said in that same May 14 interview, spelling it out for all to hear. This has never been solely about strategically countering a competitor’s rise or trying to shift supply chains away from a potentially hostile communist country. It’s about autarky, or at least about detaching America from the global trading systems that have helped lift much of the world out of poverty.

That’s not a recipe for prosperity at home. It makes no more sense than suggesting that Ohio would prosper if it decided tomorrow to stop trading with the other 49 states.”

“As the virus abates, the world will probably reconsider the approach it has taken toward China. If there are individual items for which America is heavily dependent on that country—particular medicines, perhaps—then manufacturers should look to further diversify supply chains. The federal government could encourage that behavior by lowering tariffs for imports from countries that compete with China to produce medical gear and pharmaceuticals. Pursuing nativist “buy American” policies or other forms of protectionism is neither the only solution nor the best one.

But the benefits of free trade and global economic integration created by decades of peaceful cooperation between nations should not be reconsidered. Taxing imports weakened America in advance of the pandemic. Raising barriers to trade made it more difficult to combat COVID-19 once the crisis hit. Nationalism will leave the world sicker and poorer.

Despite all that evidence to the contrary, Hawley, Trump, Navarro, and others seek to use the coronavirus as a cudgel to smash the system of global trade. They would replace it with an alternative that leaves America less free, less prosperous, and less capable of handling the next crisis.”

USMCA, Trump’s new NAFTA deal, explained in 600 words

“The United States Mexico Canada Agreement (USMCA) is an updated version of the nearly 25-year-old, trillion-dollar North American Free Trade Agreement (NAFTA). It includes major changes on cars and new policies on labor and environmental standards, intellectual property protections, and some digital trade provisions.”