Washington (CNN)President Donald Trump on Friday will make the next move in his bid to reshape US trade policy, signing two executive orders aimed at combating foreign trade abuses that contribute to the US’s half-trillion-dollar trade deficit.
Washington (CNN)President Donald Trump on Friday will make the next move in his bid to reshape US trade policy, signing two executive orders aimed at combating foreign trade abuses that contribute to the US’s half-trillion-dollar trade deficit.
At a joint news conference, Trump said some NATO countries owe “vast sums” in dues, which is “very unfair to the United States.”
“These nations must pay what they owe,” Trump said, with Merkel standing next to him in the East Room.
Yet Trump appeared to misstate how NATO financing works, arguing each nation agreed to contribute 2 percent of gross domestic product. In fact, the organization long ago set a goal that each member would devote at least 2 percent of GDP to defense in their own budgets. They “contribute” their capabilities to NATO, not monetary assessments. Those who haven’t reached 2 percent, which is the majority of nations, don’t “owe” or have to make up shortfalls of the past.
During the news conference, Trump also addressed immigration, calling it a “privilege, not a right” and adding that “the safety of our citizens must always come first.” His remarks come after federal judges this week suspended, for a second time, his attempt to impose a travel ban on some majority-Muslim nations.
The White House summit marked a high-stakes first meeting for the pair of western leaders who have clashed on issues such as refugees, trade and multilateral alliances.
The summit comes as the president has called into question the need for a unified Europe and has shaken the continent’s confidence over the United States’ commitment to NATO.
Trump was also sharply critical of Merkel during the presidential campaign, accusing her of “ruining Germany” over her more liberal policies on free trade and Syrian refugees. He has expressed support for Britain’s decision to leave the European Union.
“It’s always better to talk to one another than about one another,” Merkel said through an interpreter at the news conference.
As the two earlier sat for a brief photo op for reporters in the Oval Office, they said little and did not shake hands, though they did shake when Trump met her limousine outside the West Wing.
“We talked about lots of things,” Trump said, in response to a flood of questions from the media.
Trump also said he expected legislative efforts, backed by the White House, to repeal and replace the Affordable Care Act would ultimately be approved by Congress, despite widespread concerns among Republicans.
“It’s going to be passed, I believe,” he said. “It’s coming together beautifully. We have conservative groups, other groups, everybody wants certain things.”
The friction between the two is a sharp contrast to Merkel’s warm relationship with former president Barack Obama, whose world view was largely aligned with Merkel’s on many issues. Her meeting with Trump is being closely watched at home and abroad for signs of how the two leaders will engage each other, which could help determine the future of U.S. support for the European Union and NATO.
As much as Trump has rejected the linchpins of the post-World War II international order and Merkel has been its defender, German officials insisted her visit is intended to strengthen the relationship between the longtime allies.
“The chancellor comes to Washington with a very open mind-set and a constructive, pragmatic and forward-looking attitude,” German Ambassador Peter Wittig told The Washington Post this week. Noting that the United States is Germany’s most important foreign ally, he added, “We want to build on the strong relationship we’ve had over the past 70 years.”
Their meeting was postponed earlier this week due to weather in Washington.
Beyond their seemingly divergent world view, the two leaders could not be more different in terms of personality. Trump is a brash, outspoken businessman and Merkel a staid and reserved trained scientist.
Merkel arrived in Washington with an entourage that included German business executives to emphasize the important economic ties between the nations. Trump has opposed multilateral trade deals, and talks on a major U.S.-European pact called the Transatlantic Trade and Investment Partnership, which had been negotiated by the Obama administration, has bogged down.
They will host a joint news conference in the East Room of the White House on Friday where both are likely to face questions about Trump’s past comments questioning the viability of both NATO and the European Union.
Meanwhile, Trump also faces rising domestic pressure over his efforts to impose a U.S. travel ban aimed at six majority-Muslim nations in the Middle East and Northern Africa. However, the ban was blocked for a second time this week by federal judges in Hawaii and Maryland.
Merkel’s decision to welcome large numbers of Syrian refugees stand in sharp contrast to Trump’s insistence that the U.S.’s refugee program has made the country vulnerable to terrorist infiltration.
Trump has also sought to realign America’s trade relationships with much of the world, and has decried globalist economic policies and his advisers have specifically cited Germany’s trade surplus with the United States as proof of unfair economic policies. Trump has also threatened to hit German companies, like automakers, with high tariffs, which threatens to spark a trade war.
Trump officials have sought to reassure Europe that this White House has not abandoned free trade.
“The president does believe in free trade but he wants free and fair trade,” said Treasury Secretary Steven Mnuchin on Thursday while traveling in Germany.
President Donald Trump’s address to Congress and the nation on Tuesday was a bold attempt to push forward his trademark nationalist agenda—protectionism, restrictions on immigration, a military buildup—but it was also notable for the ways in which he tried to protect himself from charges of racism, xenophobia and disregard for the poor.
This strategy was evident from the speech’s surprising opening lines about Black History Month and civil rights. Trump caused eye-rolling just a few weeks ago when he seemed to suggest that Frederick Douglass, the former slave and abolitionist leader, was still alive. Over the past week, he’s been facing criticism for not speaking out more about the recent desecration of Jewish cemeteries, the threats to Jewish schools and community centers and the shooting of Indian immigrants in the Midwest. By addressing it in the opening moments of his speech, he helped disarm the criticism.
Yet no one listening to the nearly hour-long address would think Trump had mellowed his nationalist agenda. His decision to create an office at the Justice Department focused on crime caused by illegal immigrants elicited groans from Democrats in the chamber. Just as President Barack Obama once held up DREAMers—immigrants who arrived illegally as children and went on to lead productive lives—Trump pointed to families gathered in the House of Representatives who had lost family members to crimes perpetrated by undocumented immigrants. Trump showed no signs of softening his stance on immigration, save for not invoking his usual promise to have Mexico pay for the wall. If anything he went further, by suggesting that the current immigration system should be overhauled and based on “merit,” however that’s defined.
Despite news reports earlier on Tuesday that he might be open to some kind of immigration reform allowing 11 million undocumented migrants to stay in the U.S., there was no indication of that kind of softening in his address. Instead he invoked the frightening image of immigrants driving down wages and raising havoc. “Lawless chaos,” he called it. The solution, he said: “We must restore integrity and the rule of law to our borders.” By applauding Jamiel Shaw, the African-American man whose son was killed by an undocumented immigrant, Trump made his case for getting tough on the border and did so in a way that would help insulate him against charges of racism.
The Trump of Tuesday night anticipated criticism and responded adroitly. He slipped in a line defending the recent U.S. raid in Yemen that left one soldier dead and then showered praise on him and his widow. Critics have said the raid was botched. Trump sought to reassure the nation that it had been done well. He anticipated the Democratic rebuttal to his address from former Kentucky Governor Steve Beshear—an enthusiastic supporter of Obamacare—by mentioning problems the program’s had in the Bluegrass state.
The speech is likely to be well received by the public. An initial poll from CNN showed 78 percent of the public approving the speech. But Trump is at a point in his presidency where a speech is unlikely to substantially buoy or sink him. His test in the coming weeks and months: Can he go from issuing executive orders to actually passing legislation? A mogul who made “The Art of the Deal” his trademark now has to start making them with the 535 members of Congress. And while Republicans control both chambers, even members of his own party are unlikely to favor much of what Trump is proposing. There’s no agreement yet on a replacement for Obamacare, and opposition to his budget cuts—from foreign aid to environmental protection—will make it a tough sell. Besides, getting the numbers to add up from big tax cuts, big military increases and no change to entitlement programs like Social Security is impossible. Something will have to give.
But that’s down the road. For one night, the spotlight was all Trump’s, which is exactly how he likes it.
In 2007, the Ravens went 5-11 and that, coupled with the lack of development from 2003 first-round pick Kyle Boller, had a lot to do with the team’s decision to fire Brian Billick. In Atlanta, first-year coach Bobby Petrino quit after 13 games and the Falconslimped to a 4-12 record. Joey Harrington, Chris Redman and Byron Leftwich all started games that season.
Both teams headed into the 2008 NFL Draft desperately in search of a franchise quarterback. The Falcons had the No. 3 pick while the Ravens were No. 8. It was no great secret that Atlanta had designs on Matt Ryan, who had starred at Boston College, but Baltimore wasn’t going to let him go without a fight.
According to NFL.com‘s Ian Rapoport, the Ravens talked with the Rams, who had the second-overall pick, about swapping places so they could leapfrog the Falcons in the race to Ryan. So what was on the table?
Rapoport says the Ravens offered their entire draft class to the Rams, adding that “The trade nearly happened, but the Rams asked for more — they also wanted Baltimore’s second-round pick from 2009 to clinch the deal.”
As BaltimoreBeatdown.com points out, the Ravens ended up with a strong class:
And that 2009 second-rounder turned into another good player, pass rusher Paul Kruger.
Plus, it’s not like Flacco has been a stiff; he caught fire in the playoffs following the 2012 season and had everything to do with the Ravens’ win over the 49ers in Super Bowl XLVII (Flacco was named Super Bowl MVP).
Ryan has been more efficient over the course of his regular-season career, according to Football Outsiders’ metrics. Here’s how the two quarterbacks ranked in value per play in each of their first nine seasons:
Ryan’s numbers are also better in the postseason — in seven games he’s completed 68 percent of his passes with 16 touchdowns and seven interceptions, and a QB rating of 98.8. But the Falcons are 3-4 in those games. Flacco, meanwhile, sports a 10-5 record in the postseason — including the aforementioned Lombardi Trophy — where he’s thrown 25 touchdowns and 10 interceptions, but completed just 57 percent of his throws with a QB rating of 88.6.
The takeaway: Quarterback wins are overrated. But you already knew that. The bigger story is that the Ravens have been successful for much of Flacco’s nine-year career because they were able to surround him with really good players. Ryan might be the better quarterback but there’s no guarantee he would have had Flacco’s success in Baltimore without inferior talent around him.
There’s only one smart way to take all the heavy breathing since Donald Trump’s 10-minute telephone conversation last Friday with Tsai Ing-wen, Taiwan’s president.
Ignore it: Most of what’s been ricocheting around the press last week misses the point by miles.
There might have been grounds for panic in Washington’s foreign policy circles had Trump signaled his intention to recognize Taiwan’s independence from China.
Since Nixon and Mao signed the Shanghai Communiqué in 1972, the U.S. is committed to accepting Beijing’s “One China” policy. It’s the Chinese leadership’s hottest button.
But repudiating so fundamental a feature of the U.S.-China relationship isn’t remotely an entry in Trump’s playbook. By the evidence, and there’s plenty, geopolitics of this kind doesn’t actually interest the President-elect.
Put simply, Trump wants a new deal with China on the trade and investment side. He has made this clear in bold-faced capitals more or less every day since he announced his run for the White House in mid-2015.
How all the diplomats and think-tank denizens could so thoroughly misunderstand this is hard to fathom. The takeaway here, and it’s not reassuring, is that those responsible for Washington’s China policy are a jumpy, uncertain lot—less than confident that what they’ve put in place is sturdy.
Yes, Trump knew there were political and diplomatic implications when he took Tsai’s call. Let’s dispense with the thought that he’s not smart enough to figure that out beforehand—the bull-in-a-China-shop thesis.
But with Trump’s constant complaints about the trade imbalance, exchange rates, and other such matters in mind, that telephone call looks a lot different. It’s the dealmaker as diplomat: That brief chat is Trump’s opening move—the intent being to throw Beijing a touch off balance at the start of what could well be four years of very steady, intense renegotiation of the economic relationship.
Sino-American relations, let’s not forget, are no monument to clever diplomacy. They’re a muddle, to put the point bluntly, and have been for fully several decades.
On one hand, we have two huge economies that are densely interdependent on multiple levels. On the other, Beijing and Washington are sharply at odds on every military and security question lying between them—policing the South China Sea currently the most prominent among them.
President Obama didn’t create this two-headed beast, but he’ll dump it in Trump’s lap come January 20. And let’s admit it: There’s more asymmetry and mess across the Pacific now than there was in 2008—the legacy of Obama’s all-too-fancy “pivot to Asia.”
Sean Gallup/Getty Images
The Pentagon has turned the South China Sea into a flashpoint over the past several years—this quite beyond necessity. The Trans-Pacific Partnership, Obama’s over-ambitious trade alliance, pointedly excludes the Chinese—drawing a line where there doesn’t have to be one. And China’s now developing its own alternative, the Regional Comprehensive Economic Partnership. (Funny how those smart diplomats didn’t anticipate this perfectly predictable outcome.)
Let’s look briefly at the two sides of China policy Trump will either have to leave as is or refashion.
• The security relationship. Trump inherits a security policy with a fatal flaw. China’s emergence as a regional power has left the Pentagon, which has outsized influence on Washington’s Asia policies, in a time warp. Pretending in the 21stcentury that it’s the 1950s and the Pacific is an American lake is preposterous as a strategic framework—a recipe for conflict.
The question for Trump, and it’s a very good one, is whether he’ll see and address this 800-pound error or carry on with the Pentagon’s indulgence in nostalgia.
No clear signals yet. Trump may not be interested in strategic questions, but a lot of the people around him are. The New York Times reported Wednesday that Bob Dole, long close to the Taiwan lobby, had been advising Trump while the Tsai call was in the planning stage.
Last month a group of Chinese scholars issued a report forecasting that Trump—whom the Chinese leadership subtly favored over Hillary Clinton—will sustain Washington’s tough stance in the South China Sea. No change, with James “Mad Dog” Mattis, Trump’s defense secretary-designate, running the shop.
Maybe, maybe not. Mattis is a tough Marine, but his record indicates he knows the military’s limits.
Here’s Andrew Nathan, a distinguished sinologist at Columbia, in a Foreign Policy forum published just after the election:
“Trump was the practitioner of the art of the deal. If he takes office, he will look for an economic and strategic grand bargain with China, some version of a regional condominium that reduces American resistance to the spread of Chinese military and political influence in Asia in exchange for greater opening of the Chinese economy to U.S. exports and investment, Chinese investment in U.S. infrastructure — and perhaps a few permits for Trump hotels and towers thrown in as side payments.”
I’m with Nathan. Whatever else Trump may be, he’s neither an ideologue nor a saber-rattler. He’s a realist who wants to know what time it is. As backup evidence, Trump’s taking the same approach to Russia, if you think about it: We’re great, you’re great, let’s deal.
• The economic relationship. Trump has a problem here, and a big part of it is of his own making. His take on U.S.-China economic ties is far too simplistic. China’s phenomenal growth doesn’t compute to a big loss the White House needs to remedy.
American businesses have put more than $5 trillion into plant and equipment on the mainland since the turn of this century. Some of the resulting production goes into the Chinese market and a lot is exported back to the U.S. There are supply chains to think about—U.S.-based manufacturers sourcing components in China. Now there’s Chinese investment in American assets, too: It’s growing leaps and bounds.
There are bound to be imbalances to negotiate in so complex a relationship, but Trump risks a shoot-in-the-foot problem if he thinks it’s time to bust up a party because only half the people there are having fun.
A 45 percent import tariff on Chinese goods, as Trump promised on the campaign trail is thoroughly unrealistic. This was Dennis A. Muilenburg’s point when the Boeing CEO warned Trump that China could easily retaliate by shifting its formidable order book to Airbus.
Trump needs some tutoring. First order of business is dropping the shrill charge that Beijing manipulates the yuan to its advantage. That problem was resolved years ago. Harping on it makes Trump seem stupid, and that’s not the way he wants to come across with the Chinese.
Bottom line: Consider those jobs Trump got Carrier to keep in Indiana a good cue. Trump will manage some impressive gestures in his dealings with China on the economic side, but it’s unlikely he’ll get far if he tries to reform a very formidable political and economic structure in which both sides have big interests.
By David Morgan
WASHINGTON (Reuters) – Republicans in the U.S. Congress hope to convince President-elect Donald Trump to support an untested strategy of using the tax code to promote exports while slashing corporate taxes, framing it as a way to fulfill his campaign promises to restore blue-collar jobs.
The plan would be one way to help Republican lawmakers reconcile their long-standing goal of tax cuts with the often populist campaign rhetoric of Trump, who has attacked the North American Free Trade Agreement (NAFTA) and other trade deals as bad for U.S. workers.
Critics say it risks running afoul of global trade rules and increasing costs for U.S. consumers. Analysts also say that any export gains could be short-lived if the strategy causes the dollar to strengthen, wiping out any price advantage for U.S. products in international markets.
It is likely to undergo months of debate as part of a larger package of proposals offered in congressional Republicans’ “A Better Way” economic plan, but at least one Trump adviser already seems to have a favorable view of the export-focused “border adjustability” strategy.
“If we have a border adjustable tax system, that can solve a lot of these trade issues that Trump is talking about,” economic analyst and Trump adviser Stephen Moore said in an interview.
“You’re going to tax what’s imported and not going to tax what’s exported. So we’re going to reduce the trade deficit and we’re going to have more companies come in here,” Moore said.
Border adjustability’s details are not clearly explained in a summary of the “A Better Way” plan from House Speaker Paul Ryan and House tax committee chairman Kevin Brady. But the Tax Foundation, a think tank that closely studies business tax policy, said the strategy would be implemented by making revenue from sales to non-U.S. residents non-taxable, while preventing importers from deducting the cost of goods bought from non-residents.
Brady told Reuters that border adjustability would “virtually eliminate” any tax incentive for U.S. companies to move operations overseas and encourage foreign investment to return to the United States.
“We’ve got a great argument, I think,” he said.
Steven Mnuchin, Trump’s pick for U.S. Treasury secretary and co-author of the president-elect’s tax plan, described tax reform on Wednesday as “something that happens absolutely within the first 90 days of this presidency.” Wilbur Ross, Trump’s nominee for commerce secretary, did not mention tax policy directly but said the Trump administration’s aim would be to increase exports in part by getting rid of “non-tariff” barriers.
The perceived winners under a border adjustability approach would include U.S. manufacturers that export heavily, while large-volume importers, such as U.S. retailers, could be hurt. That distinction was already dividing corporate lobbying groups.
While retailers support an overhaul of the tax code, “the tax on imports proposed in the House blueprint is cause for concern for retailers,” said Christin Fernandez, spokeswoman for the Retail Industry Leaders Association, a Washington group.
The industry group’s members include Wal Mart Stores Inc, Home Depot Inc and Target Corp.
Some version of border adjustability could attract support from Democrats. Senator Ben Cardin, a Maryland Democrat who sits on the Senate Finance Committee and the panel’s tax subcommittee, said he strongly favors the idea. But he called the emerging House plan “very, very questionable” because it would use tax on corporate income rather than a consumption tax.
Tax lawyers and other experts have said such an approach risks violating long-standing world trade rules that allow countries to adjust their trading positions through indirect taxes, such as a sales tax, but not with direct taxes like the U.S. corporate tax. “It would lead to uncertainty on how it would be treated internationally. And that’s bad for business,” Cardin told Reuters.
Trump’s transition team and other Trump advisors on the economy did not respond to requests for comment.
Brady has said border adjustability would pass muster with the World Trade Organization, which polices global trade. The WTO declined to comment on the plan.
Border adjustability is only one component of the “A Better Way” blueprint. It would also slash the corporate income tax rate to 20 percent from a top rate of 35 percent; repeal the corporate alternative minimum tax; and let businesses write off capital investments immediately.
Altogether, the House Republicans’ corporate tax plan would reduce U.S. corporate tax revenues by about $891 billion over 10 years, estimated the non-partisan Tax Policy Center, perpetuating a long-term decline in the corporate tax take.
Combined with an equally ambitious package of individual income tax cut proposals put forward in the “Better Way” package, the Republican plan would boost the federal deficit by about $3.7 trillion over a decade, the center estimated.
Advocates of border adjustability note that U.S. trading partners including China use value-added taxes to favor exports over imports and say the House proposal would level the playing field for U.S. companies.
But some tax experts have questioned how effective it would be. Kyle Pomerleau and Stephen Entin of the Tax Foundation wrote in June that the increased demand abroad for cheaper U.S.-made goods would boost the dollar’s value and cancel out gains for exporters.
Still, supporters of the plan believe it could win the favor of the president-elect, who has railed against U.S. companies that have shifted production abroad and scaled back U.S. operations. Trump has already ruled out U.S. participation in the ambitious Trans-Pacific Partnership (TPP) trade deal and has vowed to renegotiate or quit NAFTA.
“When Trump understands how the blueprint works, particularly the border adjustability provision, which will create a huge incentive to make stuff in the United States, I think he’ll be delirious,” said Ken Kies, one of Washington’s most influential corporate tax lobbyists.
Kies represents major firms including Microsoft Corp, General Electric Co, Pfizer Inc and Caterpillar Inc.
ROTTERDAM, the Netherlands — For as long as ships have ventured across water, laborers like Patrick Duijzers have tied their fortunes to trade.
He is a longshoreman here at Europe’s largest port, and his black Jack Daniel’s T-shirt, hoop earrings and copious rings give Mr. Duijzers the look of a bohemian pirate. His wages put him solidly in the Dutch middle class: He has earned enough to buy an apartment and enjoy vacations to Spain.
Lately, though, Mr. Duijzers has come to see global trade as a malevolent force. His employer — a unit of the Maersk Group, the Danish shipping conglomerate — is locked in a fiercely competitive battle around the world.
He sees trucking companies replacing Dutch drivers with immigrants from Eastern Europe. He bids farewell to older co-workers reluctantly taking early retirement as robots capture their jobs. Over the last three decades, the ranks of his union have dwindled to about 7,000 members, from 25,000.
“More global trade is a good thing if we get a piece of the cake,” Mr. Duijzers said. “But that’s the problem. We’re not getting our piece of the cake.”
Far beyond the docks of the North Sea, such laments now resonate as the soundtrack for an increasingly vigorous rejection of free trade.
For generations, libraries full of economics textbooks have rightly promised that global trade expands national wealth by lowering the price of goods, lifting wages and amplifying growth. The powers that emerged victorious from World War II championed globalization as the antidote to future conflicts. In Asia, Europe and North America, governments of every ideological persuasion have focused on trade as their guiding economic force.
But trade comes with no assurances that the spoils will be shared equitably. Across much of the industrialized world, an outsize share of the winnings have been harvested by people with advanced degrees, stock options and the need for accountants. Ordinary laborers have borne the costs and suffered from joblessness and deepening economic anxiety.
These costs have proved overwhelming in communities that depend on industry for sustenance, vastly exceeding what economists anticipated. Policy makers under the thrall of neoliberal economic philosophy put stock in the notion that markets could be trusted to bolster social welfare.
In doing so, they failed to plan for the trauma that has accompanied the benefits of trade. When millions of workers lost paychecks to foreign competition, they lacked government supports to cushion the blow. As a result, seething anger is upending politics in Europe and North America.
In the United States, the Republican presidential aspirant Donald J. Trump has tapped into the rage of communities reeling from factory closings, denouncing trade with China and Mexico as a mortal threat to American prosperity. The Democratic nominee, Hillary Clinton, has done an about-face, opposing an enormous free-trade deal spanning the Pacific that she supported while secretary of state.
In Britain, the vote in a June referendum to abandon the European Union was in part a rebuke of the establishment, from laborers who blame trade for declining pay. Across the European Union, populist movements have gained adherents as an outraged response to globalization, imperiling the future of major trade deals, including a pact with the United States and another with Canada.
“The trade policy of the European Union is paralyzed,” said the Italian minister of economic development, Carlo Calenda, during a recent interview in Rome. “This is a tragic situation.”
The anti-trade backlash, building for years, has become explosive because the global economy has arrived at a sobering period of reckoning. Years of investment manias and financial machinations that powered the job market have lost potency, exposing longstanding downsides of trade that had previously been masked by illusive prosperity.
This tide of animosity may prove nearly impossible to reverse, given that technological disruption and economic upheaval are now at work in an era of scarcity. Today, many major nations are grappling with weak growth, tight credit and a gnawing sense that a lean future may persist indefinitely.
The worst financial crisis since the Great Depression has left banks in Europe and the United States reluctant to lend. Real estate bonanzas from Spain to Southern California gave way to a disastrous wave of foreclosures, eliminating construction jobs. China’s slowdown has diminished its appetite for raw materials, sowing unemployment from the iron ore mines of Brazil to the coal pits of Indonesia.
Trade did not cause the breakdown in economic growth. Indeed, trade has helped generate what growth remains. But the pervasive stagnation has left little cover for those set back by globalization.
The North American Free Trade Agreement, or Nafta, exposed workers in the United States to competition with Mexico, but its passage came in the mid-1990s, just as investment was pouring into the web, creating demand for a range of manufactured goods — office furniture for Silicon Valley coders, trucks for the couriers delivering e-commerce wares. China’s entry into the World Trade Organization in 2001 unleashed a far larger shock, but a construction boom absorbed many laid-off workers.
The dot-com boom is now a distant memory. The housing bubble burst. Much of the global economy is operating free of artificial enhancements. Lower-skilled workers confront bleak opportunities and intense competition, especially in the United States. Even as recent data shows middle-class Americans are finally starting to share in the gains from the recovery, incomes for many remain below where they were a decade ago.
“The debates that we are having about globalization and the adjustment cost, these are the conversations that we should have been having when we did Nafta, and when China entered the W.T.O.,” said Chad P. Bown, a trade expert at the Peterson Institute for International Economics in Washington. “There were people talking about these things, but they weren’t taken very seriously at the time. There’s a lot of policy regret.”
“We do need to have these trade agreements,” Mr. Bown said, “but we do need to be cognizant that there are going to be losers, and we need to have policies to address them.”
The extent of the damage suffered by these “losers” has accelerated an erosion of faith in the wealth-creating powers of free trade. A profound skepticism has taken root in some of the largest trading powers, notably the United States, France, Italy and Japan.
Successive administrations in the United States, led by Democrats and Republicans alike, have embraced liberalized trade as a central component of the nation’s foreign policy. Yet only 19 percent of American voters said trade with other countries created more jobs in the United States, according to a New York Times/CBS News poll released in July.
Even among those who support trade, doubts are growing about its ability to deliver on crucial promises. A 2014 Pew Research Center survey of people in 44 countries found that only 45 percent of respondents believed trade raised wages. Only 26 percent believed that trade lowered prices.
Volumes of economic data tell a different story.
Workers employed in major export industries earn higher wages than those in domestically focused sectors.
Americans saw their choice of products expand by one-third in recent decades, the Federal Reserve Bank of Dallas found. Trade is how raspberries appear on store shelves in the dead of winter.
Lower-income households have benefited from better prices on basic goods. As imports surged, the cost of baby and toddler clothes in the United States dropped by 10 percent from 1999 to 2013, according to an analysis by Pietra Rivoli, a trade expert at the McDonough School of Business at Georgetown University. The price of shoes went up much more slowly than the overall cost of living.
But the fear and anger over trade are well founded.
Vast numbers of laborers have lost jobs as imported goods from low-wage countries arrived. Mills have closed, while strip malls fill with dollar stores and payday lenders.
In the fallout, the United States maintained limits on unemployment benefits, leaving American workers vulnerable to plummeting fortunes. Social welfare systems have limited the toll in Europe, but economic growth has been weak, so jobs are scarce.
All the while, automation has grown in sophistication and reach. From 2000 to 2010, the United States lost some 5.6 million manufacturing jobs, by the government’s calculation. Only 13 percent of those job losses can be explained by trade, according to an analysis by the Center for Business and Economic Research at Ball State University in Indiana. The rest were casualties of automation or the result of tweaks to factory operations that enabled more production with less labor.
American factories produced more goods last year than ever, by many indications. Yet they did so while employing about 12.3 million workers — roughly the same number as in 2009, when production was roughly three-fourths what it is today.
At APM Terminals, where Mr. Duijzers works, a symphony of motion greets every arriving container ship. Cranes rev, lifting containers. But people are scarce. “Robots Running Things in Rotterdam,” proclaims an article on the company website. “Of the 74 machines operating in the yard, 63 run on their own with no human intervention.”
Since 2000, manufacturing employment in the United States has fallen about 30 percent, the most among major job sectors.
Yet if robots are a more significant threat to paychecks, they are also harder to blame than hordes of low-wage workers in overseas factories.
“We have a public policy toward trade,” said Douglas A. Irwin, an economist at Dartmouth College. “We don’t have a public policy on automation.”
The China Syndrome
When Michael Morrison took a job at the steel mill in the center of Granite City, Ill., in 1999, he assumed his future was ironclad.
He was 38, a father with three young children.
“I felt like I had finally gotten into a place that was so reliable I could retire there,” he said.
The mill had been there — just across the Mississippi River from St. Louis — since the end of the 19th century. It had changed hands, ultimately landing in the portfolio of United States Steel. But the basics held. For those willing to sweat, the mill was a reliable means of supporting a family.
Mr. Morrison began by shoveling slag out of the furnaces, working his way up to crane driver. From inside a cockpit tucked in the rafters of a cavernous building, he manned the controls, guiding a 350-ton ladle that spilled molten iron.
It was a difficult job requiring finesse and perpetual focus. He was compensated accordingly, earning $24.62 an hour.
He worked overtime shifts, amassing savings to send his children to college. Last year, he took home $86,000.
His eldest daughter recently finished her master’s in epidemiology. His son completed his sophomore year at McKendree University in nearby Lebanon.
But events playing out on the other side of the world would soon upend his life.
China’s relentless development was turning farmland into factories, accelerated by a landmark in the history of trade: the country’s inclusion in the World Trade Organization.
The W.T.O. was born out of the General Agreement on Tariffs and Trade, a compact forged in 1947 that lowered barriers to international commerce in an effort to prevent a repeat of global hostilities.
In the first four decades, tariffs on manufactured wares plunged to nearly 6 percent from about 35 percent, according to the Federal Reserve Bank of Chicago. By 2000, the volume of trade among members had swelled to 25 times that of a half-century earlier.
Most of this trade took place between wealthy countries with similar wages and labor standards. But the rollout of Nafta in the 1990s put American workers in direct competition with counterparts in Mexico, where wages were much lower and labor rights and environmental standards were minimal.
A washing machine maker with factories in the United States now had a ready way to cut costs: set up a plant in Mexico.
Still, Mexico — home to about 123 million people — was not big enough to refashion the terms of trade. When China joined the W.T.O. in 2001, that added a country of 1.3 billion people to the global trading system.
China targeted crucial industries for domination, lavishing favored companies with sweetheart credit terms while investing aggressively in ports, highways and electrical generation. Anyone with ideas about organizing Chinese labor risked landing behind bars.
In the first 13 years after China entered the W.T.O., its exports of goods swelled to nearly $2.3 trillion in 2014 from $266 billion, according to the World Bank.
The beneficiaries of this surge include anyone who has bought practically anything touched by human hands — an iPhone, a car, a Christmas ornament. Corporations that used China to cut costs raised their value, enriching executives and ordinary investors.
The casualties of China’s exports are far fewer, but they are concentrated. The rugged country of western North Carolina suffered mass unemployment as Chinese-made wooden furniture put local plants out of business. So did glassmakers in Toledo, Ohio, and auto parts manufacturers across the Midwest.
A paper published last year by a trio of economists — David H. Autor at the Massachusetts Institute of Technology, David Dorn at the University of Zurich and Gordon H. Hanson at the University of California, San Diego — concludes that Chinese imports eliminated nearly one million American manufacturing jobs from 1999 to 2011. Add in suppliers and other related industries, and the total job losses reach 2.4 million.
Mr. Trump vows to slap punitive tariffs on Chinese goods. But that would very likely just shift production to other low-wage countries like Vietnam and Mexico. It would not turn the lights on at shuttered textile plants in the Carolinas. (Even if it did, robots would probably take most of the jobs.)
Granite City sat smack in the middle of this gathering storm.
From 2005 to 2015, China’s share of global steel production swelled from just less than one-third to fully half, according to data compiled by the Peterson Institute for International Economics. China’s steel exports more than quadrupled.
Last fall, United States Steel began slowing production in Granite City, laying off 40 or so apprentices. As layoffs accelerated, they reached the ranks of more senior workers.
Michael Morrison, who started at United States Steel’s Granite City plant in 1999, was among workers laid off in December. “I’ve worked since I was 12,” he said. Credit Whitney Curtis for The New York Times
Two days before Christmas, Mr. Morrison finished his shift and went into the break room. “Everybody was standing there like zombies, looking at the bulletin board,” he said. A list of names was tacked there, along with instructions for those workers to clean out their lockers.
This is how Mr. Morrison found himself confronting a bewildering new state of affairs — joblessness.
“I’ve worked since I was 12,” he said, recalling a paper route, then a job as a cook at his brother’s taco place.
A blue Steelworkers union T-shirt hugs his burly frame. His calloused hands attest to years of physical labor. Suddenly, his $2,000 biweekly paycheck shrank to a $425-a-week unemployment check, plus some severance. In July, the unemployment checks stopped. He had reached the six-month limit.
He interviewed for a job as a supervisor at an Amazon warehouse, but it required computer skills that he lacked. So he took a position as a “fulfillment associate,” working the night shift, pulling products off warehouse shelves and putting them in boxes. It paid $13 an hour — a little more than half his United States Steel wages.
His first night on the job, his knees gave out. He took painkillers. The next morning he could barely stand up. He called in and said he would not be coming back. He has an interview coming up for a forklift driving position at a warehouse. It pays $12 an hour, another step down.
“I had to tell my son that he can’t go back to McKendree for his junior year,” Mr. Morrison says, straining to choke back tears. “He has to go to community college.”
He swallows hard. Tears emerge from the corners of his eyes.
“It just crushes you,” he says. “I didn’t get to go to college. I wanted my kids to succeed. When you see the disappointment in your kids’ eyes. …”
Falling Without a Net
When Dan Simmons started working at the mill 38 years ago, talk centered on how to make steel. These days, he spends his days at a job for which he feels little prepared — de facto social worker.
Mr. Simmons is the president of the Steelworkers Local 1899, which represents 1,250 workers at the Granite City plant. On a recent morning, only about 375 of his people are employed. He sits at his desk inside the brick union hall, greeting laid-off workers who arrive seeking help.
One man wants guidance scanning online job listings. Another has hit a snag with his unemployment benefits.
A night earlier, Mr. Simmons took a call on his cellphone from the niece of a high school classmate, a laid-off millworker. He had shot himself to death, leaving behind two children.
Trade Adjustment Assistance, a government program started in 1962 and expanded significantly a dozen years later, is supposed to support workers whose jobs are casualties of overseas competition. The program pays for job training.
But Mr. Simmons rolls his eyes at mention of the program. Training has almost become a joke. Skills often do not translate from old jobs to new. Many workers just draw a check while they attend training and then remain jobless.
A 2012 assessment of the program prepared for the Labor Department found that four years after completing training, only 37 percent of those employed were working in their targeted industries. Many of those enrolled had lower incomes than those who simply signed up for unemployment benefits and looked for other work.
European workers have fared better. In wealthy countries like Germany, the Netherlands, Sweden and Denmark, unemployment benefits, housing subsidies and government-provided health care are far more generous than in the United States.
In the five years after a job loss, an American family of four that is eligible for housing assistance receives average benefits equal to 25 percent of the unemployed person’s previous wages, according to data from the Organization for Economic Cooperation and Development. For a similar family in the Netherlands, benefits reach 70 percent.
Yet in Europe, too, the impacts of trade have been uneven, in part because of the quirks of the European Union. Trade deals are cut by Brussels, setting the terms for the 28 member nations. Social programs are left to national governments.
“You’re pursuing trade and liberalization agreements at the E.U. level, and then leaving to the individual member countries how to deal with the damage,” said Andrew Lang, a law professor at the London School of Economics.
In Granite City, the damage now dominates Mr. Simmons’s day.
Inside the union hall, a supply cabinet has been outfitted as a food pantry. He hands out plastic bags full of canned foods — yellow corn, peas, green beans. He hands one to Mr. Morrison, who initially refuses to take it.
“These are some proud steelworkers, and it’s very difficult for them to do this,” Mr. Simmons says. “These guys are used to making a living, and not asking for handouts.”
Kenneth Hahn had been working at the plant for more than 40 years when he was laid off in February. He spends most of his time in his garden, tending to vegetables.
The union hall of Steelworkers Local 1899 in Granite City, Ill. The local represents 1,250 workers at the United States Steel plant there, where many have been laid off. Credit Whitney Curtis for The New York Times
His father lived on a Missouri farm without plumbing or electricity during the Great Depression.
“They grew everything they needed,” he said.
If the mill does not start up again soon, Mr. Hahn is thinking about doing likewise.
“Move down to the holler,” he said. “I can always eat squirrel and rabbit.”
In China, farmers whose land has been turned into factories are making more steel than the world needs.
In America, idled steelworkers are contemplating how to live off the land.
The Bounty of the Sea
Rotterdam has a history of looking across the water and finding things that can be turned into money.
In the 16th century, it was herring. A burgeoning fleet set sail in pursuit. Merchants began salting and drying the catch in barrels for an emerging export trade. By the 17th century, local shipyards were clattering away, constructing vessels for the Dutch East India Company as it plied the spice routes to Southeast Asia.
As waterways linking the port to the industrial communities of the Rhine were deepened and channelized, German automobiles and machinery began flowing through Rotterdam on the way to the rest of the planet. Offices filled with law firms, insurance agents and logistics companies.
“The fortunes of this country have been built on trade,” said Wouter Jacobs, a transportation economist at Erasmus University Rotterdam. “It’s our lifeline.”
Yet even here, unease has entered the conversation.
Jacob van der Vis is paid to promote trade. An adviser on international business for the Netherlands Chamber of Commerce, he advertises innovations playing out at the port. He speaks of trade with China as a golden opportunity.
But Mr. van der Vis is skeptical of the enormous trade deal being negotiated between the United States and the European Union, the Transatlantic Trade and Investment Partnership, better known as T.T.I.P. He singles out a provision that would enable multinational companies to sue governments for compensation when regulations dent their profits.
Esso, a subsidiary of Exxon Mobil, the American petroleum company, has operations in the Netherlands. Suppose the government went ahead with plans to limit drilling to protect the environment?
“They could sue the Dutch state,” he fumed. “We are not so sure in the Netherlands whether we want to give the multinationals so much power. We are a trading country, but it’s not always that trade should prevail against quality of life.”
Out at the docks, the longshoremen fret about robots.
On a recent afternoon, the Mette Maersk, a Danish-flagged behemoth, sat tethered at APM Terminals. Some 18,000 shipping containers are stacked like children’s blocks on a deck longer than three football fields, bearing auto parts, scrap metal, electronics — any conceivable thing made on one continent and sold on another.
Robotic arms grip containers, lift them and deposit them on deck with thunderous rumbles. Trucks drive themselves.
Yet to absorb this scene and conclude that robots are about to render humanity jobless is to miss something vital. At offices a few miles away, coders are designing the software powering the automated port system, earning wages they distribute through the economy.
For the longshoremen still employed, automation has tamed their work.
John Arkenbout remembers working through ceaseless wind and drizzle when he started at the port 25 years ago. He lifted huge bricks from a pile and dropped them into rope sacks that a crane operator lifted skyward. He saw three people die — one crushed by a truck, two flattened by wayward containers.
Now many longshoremen sit in glass-fronted offices set back from the docks, controlling robotic arms via computer terminals.
“Before, it was physically taxing,” Mr. Arkenbout, 51, said. “Now it’s more mental.”
Most longshoremen earn about 50,000 euros a year, or $56,000. Mr. Arkenbout works a maximum of 40 hours a week.
But he sees the robots becoming more sophisticated. He hears from union leadership that as many as 800 jobs could be eliminated by 2020.
The union held a rare strike in January, winning job guarantees while robots are phased in gradually. But labor is playing defense. The robots will win in the end, because robots never strike. Robots improve with time.
Mr. Arkenbout scoffs at the notion that automation and trade are separate. The shipping companies are deploying robots to cut costs.
Trade deals, immigrant labor, automation: As Mr. Arkenbout sees it, these are all just instruments wielded in pursuit of the same goal — paying him less so corporations can keep more.
“When they don’t need me anymore,” he said, “I’m nothing.”
Gazan businessmen staged a protest at a crossing point Monday over what they said was the mass cancellation of travel permits by Israel, which they blamed for suffocating trade.
Palestinians accuse the Jewish state of having scrapped hundreds of travel documents allowing them to enter Israel and the West Bank as well as other countries for trade.
The permits are crucial to the economy of the impoverished Gaza Strip, which some international official say is on the brink of collapse after 10-years of Israeli and Egyptian blockades, imposed following the take over of the enclave by Hamas, considered a terror group by Israel and most Western governments.
Israel, which allows hundreds of trucks into the Strip each day, says the blockade, which restricts shipments on certain items, is necessary to prevent Hamas and other terror groups from rebuilding its military infrastructure, including rockets and a network of tunnels.
COGAT, the Israeli Defense Ministry body responsible for implementing government policies in the Palestinian territories, refused to comment on Monday.
But an Israeli official confirmed to AFP that the number of permits had declined.
“There are currently 1,600 trading permits, compared to 2,800 in the same period in 2015,” the official said.
Walid al-Hosary, chairman of the Gaza chamber of commerce, said that “more than 1,500 permits and more than 160 authorization cards for merchants and businessmen have been withdrawn.”
He told the demonstrators at the Erez Crossing in the north of the Strip that Israel had cited “security reasons,” for the drop in permits.
He claimed raw goods necessary for industry were not being let into the Palestinian enclave, home to some 1.9 million Palestinians.
Israel prevents a long list of materials to enter the Strip it says are used or can be used by Hamas for military purposes, though in recent years it has shortened that list and made efforts to put “forbidden” materials straight into the hands of international aid groups working in Gaza.
MOSCOW, Russia — Russian President Vladimir Putin on Wednesday ordered his government to begin the process of lifting sanctions imposed against Turkey after Ankara shot down a Russian warplane last year.
“I ask that the Russian government begins the process of normalizing general trade and economic ties with Turkey,” Putin said at a cabinet meeting following a telephone conversation with Turkish counterpart Recep Tayyip Erdogan.
First on his list were travel restrictions between the countries.
“I want to start with the question of tourism … we are lifting the administrative restrictions in this area,” Putin told government ministers in televised comments.
The move came after earlier in the day Putin and Erdogan held their first phone call since Ankara downed one of Moscow’s jets in Syria last year.
A statement from the Turkish presidency said Erdogan and Putin “highlighted the importance of the normalization of bilateral relations between Turkey and Russia.”
The November incident froze relations between the two nations and saw Moscow slap sanctions on Ankara.
Putin also condemned the “heinous” attack at Istanbul’s Ataturk airport Tuesday that killed at least 41 people and offered condolences to the Turkish people, the statement said.
“Reiterating their commitment to reinvigorate bilateral relations and fight terrorism together, the two leaders agreed to remain in contact and meet in person,” Erdogan’s office said.
The Kremlin confirmed that the conversation took place and said a statement would be released.
The breakthrough phone call by Putin came after Erdogan on Monday sent a letter to the Kremlin leader that Moscow said contained an apology.
The downing of the plane in November ruptured relations and saw Moscow impose a raft of sanctions, including an embargo on Turkish food products and a ban on charter flights and the sale of package tours to the country. It also sparked a bitter war of words between the leaders with Putin calling it a “stab in the back” and demanding an apology from Erdogan.
Ankara has said Erdogan expressed his “regret” over the incident in Monday’s letter to Putin and asked the family of the pilot who died to “excuse us,” but has not explicitly confirmed he apologized for shooting down the plane.
Kremlin spokesman Dmitry Peskov on Tuesday described the letter as an “important step” but warned that “there is no need to think that in several days it will be possible to normalize everything.”
Turkey has argued that the Russian plane strayed into its airspace and ignored repeated warnings, but Russia insisted it did not cross the border and accused Turkey of a “planned provocation.”
The countries are on opposing sides in the Syrian conflict, with Ankara backing rebels fighting to topple President Bashar Assad while Moscow is one of his last remaining allies.
Syria and Russia are considering the possibility of setting up joint banks to carry out transactions between the two countries, Syrian Prime Minister Wael Nader Halqi told Sputnik.
“The Russian-Syrian business council has expressed a wish to open a joint Russian-Syrian bank with an equity participation of 50 percent by each side. The Syrian participation will be provided by Syrian businessmen with sufficient banking experience. This bank would be controlled by the countries’ central banks,” Halqi said.
“At the moment, there is a discussion at the Central Bank of Syria on the most appropriate form for the creation of a Russian bank in Syria, in order to ease the financing of banking transactions between the two countries, which serves mutual interests and will simplify trade,” he added.
Syria and Russia are holding consultations on the possibility of transactions in their national currencies Wael Nader Halqi said.
“Back in 2013, the Central Bank of Syria prepared a detailed bank mechanism on the exchange [of goods] in national currencies and presented it to the Russian side to a representative of the Russian Central Bank’s head. Several rounds of negotiations were held on this mechanism. We were told that consultations with Russian banks were ongoing. Work on examining this issue, as well as the issue of cooperation with Syrian banks in this is still ongoing. Soon we will be told the names of these banks,” Halqi said in an interview.
According to Halqi, the topic was also reflected in a memorandum that the Syrian side presented to the members of the Customs Union, which later turned into the Eurasian Economic Union.
Syria intends to seek financial support from its partners, including Russia, Syrian Prime Minister said.
“Yes, we will request help from friendly countries. As for the amount — restoring the country requires a lot of funding, this will depend on the position of the country wishing to take part in this and invest. Industrial investments in important projects can be carried out either with the full funding of the state or partially through established investment forms, such as, for example, open credit lines in accordance with the financial needs of the social and service sector, loans on favorable terms.. It is impossible to calculate the required amount, as we first and foremost ask friendly countries to be financially involved in accordance with their capabilities,” Halqi said.
“[The aid] has a major impact on meeting citizens’ basic needs and supporting vital sectors. This regards rescue and humanitarian activities. As for the strategic period, the aid will be provided in the form of financial investments, which the Syrian government plans to get from friendly states in the form of concessional loans to finance investment projects in strategic fields, most importantly energy, infrastructure, industry, agriculture and others,” he added.