Sunday, March 5, 2017

"Trump is the first free trade-bashing populist to win the White House." I read this recently and found it struck an amusingly creative yet unarguable way to describe him. His underlying protectionist and anti-globalist rhetoric is not dissimilar to what Bernie's socialist democratic platform was on issues like the TPP. Listening to Trump talk about the economy is like listening to a drunk, racist uncle explain a sensitive subject while offering no concrete details or tangible insight- only corrosive language and more confusion.Bernie on the other hand, whenever he leads in a speech with "And let me make it very clear" with that iconic hunch and finger wave, you know it's about to get good.

In my opinion, understanding the details of the TPP ( which were largely shrouded in mystery for a long time ) is an important factor for me in how I am choosing to judge Trump's administration solely based on the merit that if he achieves economic advantages for the country as a whole, as a person of color with a business dependent on international trade- I can and will deal with the attacks on progressive issues completely separately.

The TPP, now cancelled under Trump, is an undisputed crown jewel of economic negotiations perilously furthered by the Obama administration. But similar to how I despise in how the administration chose to handle the Wall St. bail out and the financial crisis- it is extremely important to acknowledge the critical mass in which the unchecked consolidation of multi national corporate interests thrived under neoliberal economic policies fueled by mainstream free trade fanaticism and finance economics driven speculations.

Unfortunately, what these narratives didn't drum up were the many causes for a five alarm bell like how the TPP undermined U.S. sovereignty by giving corporations the right to challenge our laws before international tribunals. Or that unlike most trade agreements, there was no indication the TPP came with an expiration date. Unlike the infamous unequal treaties of the past which were largely achieved through "gunboat diplomacy" and colonization which forced a uniform tariff rate on other countries rather than allowing them to set their own. The effects of these "not so free trade" policies are only part of how capitalist countries have historically inhibited developing nations from creating their own infant industries as America was able to during our Protectionist Century which lasted from the 1830's to WWII. Together with slavery, federalism, and protectionism, America was able to grow by leaps and bounds by also boasting the highest average industrial tariff in the world. Globalization that was driven by outright imperialism rather than market forces are said to have led the escalation between leading capitalist countries into the first World War.

About 78% of last year's imports from developing countries arrived with no tariffs, quota limits, or other barriers. Unequal treaties of the past have led to not only the economic retrogression in places like Asia and Latin America- but it has also allowed for the path of least resistance for globalization ( or Americanization) to continually operate as an unsustainable, expansionist and therefore modern form of colonization through the phenomena of multi national corporatists. The illusion that China is the source for all things cheap labor in 2017 is inaccurate as three consecutive 10% increases in the national minimum wage from 2013-2015 have resulted in clothing and electronic giants long since moving to Vietnam where the TPP posed to exclusively benefit from a zero tariff relationship with twelve countries, including Vietnam. Currently US/Vietnam trade supports $30.6 billion dollars in imports. 40% being zero tariff goods like cell phones, furniture, and coffee while the rest high tariff goods like mass market sneakers for instance can land in the US currently anywhere between a 15%-48% tariff rate.

On the other hand, the TPP broke progressive ground in this way "Finally, an area where TPP is doing genuinely new and innovative things is in labor standard, where it will likely be the most elaborate, enforceable, and "liberal" agreement the US has even concluded. Assuming US negotiators are reasonably successful, this will cover laws, implementation of laws, and capacity-building programs in labor rights, child labor prevention, minimum wage policies, and workplace health and safety policies." In this sense, it is a great stride for globalists- but at the benefit and cost of who? Some would argue that while establishing a more modern labor standard for some of these developing nations is a great thing- but at what cost? Clearly if multi national corporatists are the entrenched beneficiaries of this maximized "free trade" deal- it would be at the expense of not only the American worker but the American entrepreneur who still believes in the idea of a genuine "free market" to compete.

Currently Trump is threatening a 45% tariff on Chinese made goods. But it's important to point out that while I think it is fiscally irresponsible to omit details of his plans for negotiations and therefore is leaving an intentional gaping hole of market speculation and public chaos- this 45% could already account for some of the import duty laws that exist for certain goods or it could be another layer of duties. Literally nobody knows. 98% of all shoes sold in the US come from outside of the country, and it's been this way for a long time. I believe this is largely due to the government inherently choosing to not implement protectionist policies for American manufacturers when there were still skilled laborers and supply chains that were in a position to not only be maintained, but invested in.

"If US companies did re-shore manufacturing, prices would also go up due to the much higher costs, particular for labor, of making goods in the US. New Balance, which is the only sneaker manufacturer to still produce a significant amount of its shoes- about 25%- in the US- charges from $165 upto $399 for it's American-made shoes." And these are the retail prices from a multi national corporation who owns private factories Stateside and have notoriously engineered their efficiency from cutting raw materials to shipping finished shoes- from eight days down to three hours.

"What Trump's proposed policies would likely mean, however, is that shoes ( and other goods ) would get more expensive for consumers - perhaps a lot more. The US sneaker industry could start to look like Brazil's, according to Powell, where Nike sneaker costs significantly more than it does in the US. Nike Air Max 2017 runs about $240 in Brazil versus $190 in the US." as pointed out in a great article on Quartz.

But the conversation that we should be having is how to put certain politics aside in hopes of creating new jobs in tech and higher value manufacturing (while renewable energy prospects seem extremely bleak in this administration). What is inescapable is the now highly politicized nature of how Silicon Valley chooses to interact and work with the new administration. My problem is the continual focus on unrealistic and political scapegoats of industries that have long since disappeared. And we can't afford to create media sensationalized barriers towards the bearings of an actual conversation that needs to be had- because it stands to benefit the entire country economically. Unfortunately, life does not follow ideology and in this new era of knee jerk politics, it's becoming more important to create your own conclusions independent from media companies that answer to shareholders just like any other big business.