17 February 2018   Leave a comment

The US continues to chip away at the presumption of free trade in the global economy.  The US Department of Commerce has released a report advocating tariffs on imports of steel and aluminum.  The analysis was conducted under the authority of Section 232 of the Trade Expansion Acts of 1962 which permits the government to impose tariffs on imports that affect US national security.  The report recommends:

“1. A global tariff of at least 24% on all steel imports from all countries, or

“2. A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or

“3. A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

“Each of these remedies is intended to increase domestic steel production from its present 73% of capacity to approximately an 80% operating rate, the minimum rate needed for the long-term viability of the industry. Each remedy applies measures to all countries and all steel products to prevent circumvention.”

The analysis of the national security effects of steel imports can be accessed here.  The analysis on aluminum can be accessed here.   The Chinese were quick to threaten retaliation if the tariffs are imposed.  The Chinese also pointed to domestic opposition to those tariffs in the US and the high costs of such protection.  In an article in China Times:

“The Obama administration’s decision to levy safeguard tariffs on Chinese tires in 2009 temporarily helped save 1,200 jobs in the US tire industry, but at a cost of 900,000 US dollars per job due to higher prices, according to a study by the Peterson Institute for International Economics.

“American trade protectionism – even in the periods most often cited as’successes’ – not only has imposed immense economic costs on American consumers and the broader economy, but also has failed to achieve its primary policy aims and fostered political dysfunction along the way,” said Scott Lincicome, an international trade attorney and adjunct professor at Duke University.”

The data do not support the premise that US steel production has declined–it has, rather, remained fairly constant.

 

The indictments of Russian individuals and organizations in US elections is based upon information that seems reliably solid.  The indictments testify to the full blossoming of what is called “cyberwarfare” although the term is hard to define and blurs our understanding of the long-standing diplomatic practice of propaganda.  The spread of false and misleading information has always been an adversarial tool in world politics.  But the explosive growth of digital technology and the deep reliance on digital technology in modern economic infrastructures has amplified the power of electronic propaganda.  The US is especially vulnerable to cyberwarfare and is hamstrung to confront the problem by two attributes of American society.  First, the US concern over privacy makes it difficult to monitor cyber attacks.  Second, the US over-reliance on digital technology makes the idea of deterrence though counterattacks very difficult.  Of all the countries in the world, the US is perhaps the most vulnerable to technological warfare.

 

The Economist has a very important article on Congo, a place that has experienced what is perhaps the longest-running conflict in the world today in which as many as 5 million people have been killed over the period of several decades.  The weakness of Congo’s politics is unquestionably a legacy of the brutality of colonialism but its very slow progress in overcoming that legacy has allowed the turmoil to continue.  The current President, Joseph Kabila, is in the seventh year of a five-year term.   The Economist describes the harsh conditions of life in Congo:

“Congo is four times the size of France but has less paved road than Luxembourg. Its population is estimated at 80m but no one is sure (the latest census was in 1986). Whatever the true figure, it is soaring. The average Congolese woman has six children, the third-highest rate in the world; nearly half of Congolese are under 14. And they are grindingly poor. Only one in seven earns more than $1.25 a day. Life expectancy is just 58. Britain, which provides aid to Congo, estimates that by 2030 it could be home to more absolutely poor people than any other country. It lags far behind even neighbouring Zambia on many indicators of development.”

The tragedy of poor governance is that Congo is potentially the richest country on the planet.  Its resource base is extraordinary, but most of its riches flow out of the country due to the corruption in the government and the willingness of multinational corporations to subsidize the corruption in pursuit of higher profits.

Posted February 17, 2018 by vferraro1971 in World Politics

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