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Why Biden will find it hard to undo Trump’s costly ‘America first’ trade policy

President-elect Biden hopes to restore America’s global leadership on issues like trade, but populists in both parties may make his job a lot harder.

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Biden says his Cabinet picks will help him restore American leadership in the world. Chandan Khanna/AFP via Getty Images

Since becoming president-elect, Joe Biden has signaled that restoring America’s leadership on the world stage is among his highest priorities – an intention aptly demonstrated by his Cabinet picks.

Biden’s nominees are “ready to lead the world, not retreat from it,” he said on Nov. 24. “America is back.”

Perhaps nowhere is this return more urgent than in trade policy, a topic I follow closely as a scholar of international political economy. Over the past four years, President Donald Trump has ripped up trade deals, launched damaging trade wars and gunked up the workings of international trade organizations.

All of this has ceded global economic leadership to China, as we can see from the trade negotiations Beijing recently oversaw with 14 other Asian nations. In November, the countries met in China’s capital and formally signed what is now the world’s largest regional free trade pact, covering nearly a third of humanity.

Biden no doubt longs to return to some semblance of the “golden era” of U.S. leadership, the half-century following World War II when America helped create and sustain the rules and institutions that fueled globalization.

But after four years of Trump’s “retreat,” it may be harder to return to leading than Biden thinks – thanks to the growing number of Americans on both the right and the left who are skeptical of free trade.

The costs of ‘America first’

While Trump advocated a trade policy he labeled “America first,” it’s probably not the best description.

The policy has involved applying punitive tariffs on specific products such as steel and aluminum and on whole countries – most notably China – at a scale not seen in decades. But the price to the U.S. has been high.

Trump’s tariffs have cost American businesses and consumers tens of billions of dollars. And they have seriously hurt U.S. farmers and manufacturers by closing off export markets for American products in China and elsewhere. Moreover, the administration has spent tens of billions more trying to aid farmers harmed by the tariffs.

Putting Americans first was also the stated reason behind the president’s decision to withdraw from trade deals like the Trans-Pacific Partnership and focus on bilateral rather than multilateral agreements. Aside from denying American companies the benefits free trade pacts provide, this also has meant the U.S. increasingly sits on the sidelines when global trade rules are being written.

That’s bad news for America because even when rules apply only to the trade agreement in question, they generally serve as a foundation for future deals – including negotiations exclusively with the U.S. So if the U.S. government isn’t at the table, it could have long-term ramifications.

In America’s stead, other powerhouses will seek to dictate the terms of trade with U.S. allies, as Beijing did with the trade accord it signed in November. And Chinese interests – on the environment, labor standards and especially intellectual property protection – are not the same as those of the U.S.

Biden and the populist right

So there are very strong reasons to reengage with the world. Global trade may even be key to helping the U.S. recover from the coronavirus pandemic. But to do so, Biden will have to navigate two groups that could be a thorn in his side.

The first is the populist right – conservative, mostly working-class voters who warmed to Trump’s anti-trade platform in 2016.

Like Trump, they tend to see trade through a nationalist lens in which the “winner takes all.” That is, they understand trade not as beneficial for all parties but rather as a competition that can be won or lost based on who’s running a trade surplus or who’s gaining or losing market share.

Furthermore, as the base of the Republican Party increasingly shifts to encompass less educated white voters, this has critical implications for the GOP. Basic trade theory suggests that, in a rich country such as the United States, lower-skilled workers are hurt by free trade, while skilled workers and capitalists get most of the benefits. This is because lower-income countries will have a comparative advantage in lower-skilled labor.

Many working-class voters are understandably feeling left behind by this new economy and ignored by the government. Free trade has become a target of their ire, helping drive the Republican Party’s shift toward nationalism – and protectionism – and shoving aside the traditional pro-business conservatives.

If Republicans manage to hold onto the Senate in January, it’s very likely that the growing power of the populist right will continue to influence trade skepticism in the party. This would tie Biden’s hands when it comes to negotiating new trade deals or taking other steps that will require Senate approval.

But even if Democrats manage to take the Senate, Biden will likely still need to court these working-class, mostly white voters when he seeks to maintain his congressional majorities in the midterms. Either way, they will remain a potent force well after Trump is gone.

The protectionist left

But the populist right is not the only important part of the U.S. political spectrum that is skeptical of trade.

The populist left – led especially by Sen. Bernie Sandershas long favored limiting foreign trade. Its motivations are somewhat different, focused more on a skepticism of corporate power and trade’s impact on labor rights and the environment. But they are also similar when it comes to the many working-class Americans and young people who form the left wing of the Democratic Party.

In the primaries, Biden beat Sanders and others who offered a more skeptical view of trade. But still, he will have to accommodate the new energy coursing through the left in America, including when it comes to its views on trade. And the populist left will have a lot more power than the right in Biden’s Washington, from members of Congress to key Democratic interest groups like labor unions.

Potent populists

A pro-trade optimist might point out that polls, like this one conducted in late 2019, suggest overwhelming support for free trade among voters in both parties. Polls, however, don’t always measure how strongly and consistently these views are held.

What’s more, because the harms of free trade are more concentrated than its benefits, the minority of voters who push for protectionist policies are often more powerful than their numbers might suggest. Ultimately, although populists on the right and the left represent a minority position on trade, they will remain potent political forces for the foreseeable future.

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For these reasons, I believe it is unlikely that Biden will be able to return to business as usual on trade. While Trump’s aggressive protectionism will likely go away, Biden will probably keep up the pressure on China and has already adopted some of his predecessor’s “America first” rhetoric to appeal to the working class. And for his more progressive supporters, you’ll likely see him push for stronger labor and environmental protections in future trade agreements.

Biden might not be able to throw the door to global trade wide open, but he should be able to keep it from shutting any further.

Charles Hankla has donated to and volunteered with the Democratic Party of Georgia.

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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Walmart joins Costco in sharing key pricing news

The massive retailers have both shared information that some retailers keep very close to the vest.

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As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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Walmart has really good news for shoppers (and Joe Biden)

The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.

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As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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