While Donald Trump, a/k/a Der Trumpenführer certainly deserved the title "liar-in-chief" for the reasons set out in a prior post, he also deserves the title "idiot-in-chief" since he knows so little about so many things and continually engages in knee jerk reactions based on his own prejudices o what he believes will play best with his white trash/white supremacist/evangelical Christian base. True facts and considered consequences bear little relation to Trump's blow hard, ignorance embracing persona. One prime example is Trump's mindless blathering about ending NFTA with apparently no thought to the fact that ending the NAFTA treaty would bring higher cost to American consumers or, worse drive Mexico into the waiting arms of China. Anyone sentient (which excludes Trump) would realize that spurring ties between Mexico and China is anything but in America's beat interests. A piece in The Atlantic looks at Trump's Brutus and ignorance-filled anti-Mexico machismo and its likely unintended consequences. Here are excerpts:
This week, while his country is renegotiating the North American Free Trade Agreement, Mexican President Enrique Peña Nieto was in China to pursue his country’s Plan B. Rumblings of a free-trade deal between the two nations have grown since President Trump took office this year, but they’ve mostly been seen as political posturing. But with Trump threatening regularly to dump the deal—even taking time last Sunday, during Hurricane Harvey, to say he “may have to terminate” NAFTA—the possibility of Mexico opening up to China seems ever more real.
NAFTA’s collapse would likely put the U.S. and Mexico on unstable ground, but economists say they doubt it would devastate either country in the short term. Without NAFTA, trade between Mexico and the U.S. would fall back on World Trade Organization(WTO) tariff standards. Signatories to the pact have agreed to “bound rates” for tariffs, which establish a ceiling. These rates differ by industry, but items like agricultural products can have high limits. NAFTA changed the way the U.S. eats, and without NAFTA, consumers stand to lose their perennially fresh and cheap vegetables. But the sector that stand to lose the most is auto manufacturing, because U.S. companies have invested heavily on being able to send car parts to Mexico, assemble them there, then bring them to the U.S. to be sold. The WTO tariffs for the auto sector are much higher than for most other industries, so not only would consumers have to pay more for cars, but it would likely disrupt the current chain of manufacturing.
Trump has threatened to raise tariffs to 35 percent in order to push companies to build products in the U.S., but this is unlikely because it could spark a trade war. So if NAFTA did end, it’s trade would likely continue at WTO tariff rates, making many products from Mexico more expensive, but leaving intact the flow of trade.
That’s not to say Mexico isn’t concerned about losing NAFTA, or that it isn’t looking for more trading partners. Mexico sends about 75 percent of its exports to the U.S., which comes to about $290 billion. By way of comparison, Canada is its second-largest export market at $23 billion, and China its third at $7 billion.
“It is a very fashionable discussion in Mexico that we should diversify trade since we are having problems with the United States, or more specifically with Trump,” Enrique Dussel Peters, an economics professor at the National Autonomous University of Mexico, told me. “And China has become the most fashionable to talk about.”
China and Mexico increased trade from $4.9 billion in 2015 to $5.4 billion in 2016. The Chinese market is opening up to products like tequila, beer, plantains, and avocados. But, Dussel points out, Mexico has been trying to redirect trade with Chin for years, but has not enjoyed the kind of success it has had with the U.S. through NAFTA.
Just as Trump uses Twitter to skewer policy and people he disagrees with, Peña Nieto, by courting China during the NAFTA renegotiations, is telling Trump he has his own recourse, the “China card.” This would have been considered too drastic in the past, but as Franklin Foer wrote in this magazine in May, “Unfortunately, Trump has elevated machismo to foreign-policy doctrine … .”
Trump is an idiot and the irony is that those who voted for him are the ones most likely to suffer from the coats that hie bigotry based policies will bring about. Meanwhile, he is driving Mexico into the waiting arms of China which would love nothing better that to become the premier trade partner to China, America's growing economic rival. higher
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