Trade

Trump Considering Last Minute Expansion of His Trade War

SK Ashby
Written by SK Ashby

Trump is on his way out of Washington, but unfortunately he will still be the president for another month and that gives him a month of time to destroy as many things as he can before Joe Biden takes office.

A normal administration would have ceased making new decisions or imposing new policies immediately after the presidential election, but Trump may dramatically expand his trade war just three weeks from today and with two weeks to go before Biden's inauguration.

Trump's Treasury Department and his trade representative, Robert Lighthizer, recently labeled Vietnam a "currency manipulator" and the rumor is that Trump will impose tariffs on Vietnamese goods after a mandatory public comment period on Lighthizer's "investigation" ends on January 7th.

Industries are warning Washington about the consequences and analysts say Vietnam's currency has been devalued because of Trump's own actions.

Vietnam’s commerce ministry said on Monday that tariffs would cause firms in the country to “lose their confidence in doing businesses with U.S. partners” and reduce imports from the United States. It said officials from the two countries will hold “extremely important” talks in late December. [...]

Analysts say that Vietnam’s violation of the Treasury current account surplus threshold was partly a product of the Trump administration’s trade war with China, causing a rush of inward investment by companies seeking to avoid Chinese tariffs and a large increase in exports to the United States.

Concerned U.S. executives are already reaching out to Congress. “Just the rumor of another massive tax on American companies has created such a panic that congressional offices are already getting panicked calls from their hometown businesses,” one congressional aide told Reuters.

We discussed it here at the time, but Trump's trade war with China did nothing to reduce our reliance on imports or materially reduce our trade deficit. All it did was reroute trade to other countries including Vietnam.

Trump regime officials are probably aware that Vietnam is not deliberately intervening to reduce the value of their currency as much as American dollars are just overwhelming it, but they also knew that was true of China. China also did not conspire to maliciously weaken their currency.

The Trump regime's trade 'investigations' have all been politically motivated and that has led to political conclusions. This is nothing more than Trump punishing Vietnam and American companies that buy goods from Vietnam. He wants to punish them because his trade war with China was a failure.

Trump can wage war on China, on Vietnam, and whatever the next country to fully industrialize their economy will be. None of it will materially alter our trading relationship with the rest of the world because the bottom line is Americans rely on cheap imports to maintain our standard of living. Mostly conservative and Republican policymakers long ago decided that cheap goods and higher profits are better than higher wages and that means American consumers will always chase the cheapest deal they can get. We look for deals because we have to. I'm not embarrassed to say that I almost never buy "American made" goods because it's not a moral failing that most people can't afford to. Americans being unable to afford basic things is an entire economic philosophy in this country. Most of my clothes came from China and Vietnam because those are the ones I can afford.