Iowa's senior U.S. Senator Charles "Chuck" Grassley, chair of the Senate Judiciary Committee, and longtime family friend. Senator Grassley is also on the Senate Agriculture Committee and a close fried of former Iowa Governor Terry Branstad, the new U.S. Ambassador to China. Ambassador Branstad and Iowa's junior Senator Joni "Make 'em Squeal" Ernst were also at this Capitol Hill meeting of Iowa political and business leaders.
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The recent Wall Street
Journal interview with Commerce Secretary Wilbur Ross focuses on trade, China,
NAFTA and more. The June 18 article’s
lead paragraph: “One of the most notable
political trends over the past 18 months—and one with the potential to affect
companies across many industries—has been voter pushback against globalization
and free trade.” This “trend” against globalization and free trade goes
back further than 18 months. President Clinton barely succeeded with NAFTA.
President Obama gave up on the Trans-Pacific Partnership. The Office of the
U.S. Trade Ambassador is the loneliest place in Washington at the time of this
article.
Selected
quotes:
Secretary
Ross: “Just about every other country in the world has more protectionist rules
than we do. Take China. China has the most beautiful free-trade rhetoric. And
those of you who do business either within the country or try to export to it
know they are the most highly protectionist of the big countries. So this is
nothing new. We’ve been in a trade war for decades. The only difference is now
the American troops are coming to the ramparts for maybe the first time.”
Secretary Ross: “If I were an
importer, I would beware of what happened already in the rare-earths [metals
industry]. China is a very big supplier of rare earths, which are quite
essential to many electronic products. They drove everybody in this country out
of business by dumping, dumping, dumping, dumping. And guess what happened once
they did? Prices suddenly went way up. And when they get angry with a country,
they cut off the supplies. So long term, it seems to me, the interests of
American businesses and of the president’s policy are totally consistent
because there are no free lunches.”
On
trade progress with China, Secretary Ross said: “The Mar-a-Lago summit, which I
was privileged to be part of, accomplished a lot, and mostly all to the good.
I’ll give you some examples.
For 14 years, American
beef producers have been trying to get their product into China on an
unfettered basis. In less than 100 days, we got it in. And that first beef will
literally be leaving in about 10 days. The same is true for some other things.
Those were the easier
deliverables. We’re now working on another list. We generally have two
conference calls a day, one early in the morning our time and one late at night
with the Chinese. That’s five, six, seven days a week.
The whole fabric of
these discussions is different from prior ones. We aren’t interested in great
long-winded debates and big ceremonial meetings and big proclamations that have
no teeth. We’re interested in very specific, very tangible achievements. And
we’re finding a very, very sensible give-and-take with the Chinese right now.”
Will the U.S. leave
the World Trade Organization? Secretary Ross said this would be a radical step.
He indicates, at present, he would advise President Trump against such a move. He
does see the need of WTO reform.
Secretary Ross said
NAFTA was “an obsolete agreement.” He
explained, “It didn’t envision the digital
economy at all. Barely talked about natural resources. Barely talked about
service, particularly financial services. It didn’t really address our economy
or theirs the way they are today.”
The WSJ reporter asked how does the administration
change NAFTA “without pissing everyone off”? Secretary Ross said, “We solved
the sugar thing without pissing everyone off. We’re trying to solve some of the
little disputes with Canada. Disputes are resolvable if people are of
reasonable will and are willing to make reasonable compromises. We made some
big changes with China. I don’t see them suddenly screaming and yelling.”
This is a great response and the question is if Mexico and, especially, Canada
are willing to make trade compromises.
Secretary Ross feels trade deficits do
matter and he proposed ways to reduce them. “To the countries with whom we have
the big deficits, like China, we are going to say: ‘Look, there are a bunch of
products that you buy, some from us and some from other people. We’re your
largest customer. You really ought to give us a little better market share. It
isn’t going to hurt you to buy cattle from us instead of from X country or
soybeans from us or industrial goods from us.’ So substitution of, or changing
market share, would be one easy way to redistribute a bit of the deficit,” he
said.
Secretary Ross then made an important and
hugely realistic statement: “Because it isn’t inherent in free trade, in my
view, that one country, namely the U.S., has to absorb the entire cumulative
trade surplus of the rest of the world, and therefore eat $500 billion a year
of deficit.” This is important because the size of the trade deficit,
like the size of the U.S. federal budget deficit, have disrupted the U.S.
economy and business decisions and have contributed to the vast income
inequality, un- and underemployment, gig jobs, high rents, low savings rates, and
other economic ills in the U.S. economy that
have disillusioned workers.
###
On June 19, 1867, Maximilian I, emperor of Mexico since 1864, was executed by firing squad a month after being taken prisoner by the forces of President Benito Juarez.
In 1917, during World War I, King George V ordered the British royal family to dispense with German titles and surnames; the family took the name "Windsor."
In 1944, during World War II, the two-day Battle of the Philippine Sea began, resulting in a decisive victory for the Americans over the Japanese.
In 1953, Julius Rosenberg, 35, and his wife, Ethel, 37, convicted of conspiring to pass U.S. atomic secrets to the Soviet Union, were executed at Sing Sing Prison in Ossining, New York.
In 1964, the Civil Rights Act of 1964 was approved by the U.S. Senate, 73-27, after surviving a lengthy filibuster.
2007 A truck bomb struck a Shiite mosque in central Baghdad, killing at least 87 people. President George W. Bush and visiting Israeli Prime Minister Ehud Olmert sided emphatically with Palestinian President Mahmoud Abbas in his standoff with militant group Hamas.
2012 WikiLeaks chief Julian Assange took refuge at Ecuador's Embassy in London, seeking to avoid extradition to Sweden, where he faced questioning about alleged sex crimes. (Sweden dropped its inquiry in May 2017, but Assange remains holed up in the Ecuadorian Embassy to avoid arrest by British authorities for jumping bail.)
Birthdays of Note:
Nobel peace laureate Aung San Suu Kyi is 72.
Author Salman Rushdie, author of "The Satanic Verses," is 70.
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