The New York Times - 08.10.2019

THE NEW YORK TIMES OP-EDTUESDAY, OCTOBER 8, 2019 N A23

D

EBATING tradeissues with sup-
porters of President Trump’s
trade actions is a constant game
of goal shifting. If you point out
that the Trump tariffs are raising revenue
for Uncle Sam on the backs of American
consumers, they reply that China is hurt-
ing the most.
Mr. Trump and his team of unrepentant
protectionists have made wild claims
about what big tariff increases and ag-
gressive negotiation tactics will achieve.
Let’s pick the top five claims. Have any ac-
tually panned out? The answer will not
come as a surprise. (It’s no.)

CLAIM 1On March 2, 2018, when an inter-
viewer on Fox Business Network’s
“Mornings With Maria” asked whether
China would retaliate against new metal
tariffs, Mr. Trump’s adviser Peter Navarro
replied, “I don’t believe any country in the
world is going to retaliate for the simple
reason that we are the most lucrative and
biggest market in the world.”
He was wrong: Everyone has retaliated
against us. A study by the economists
Mary Amiti of the Federal Reserve,
Stephen J. Redding of Princeton and Da-
vid Weinstein of Columbia shows that our
trading partners, especially China, “have
retaliated with tariffs averaging 16 per-
cent on approximately $121 billion of U.S.
exports.”

CLAIM 2The president has said that tar-
iffs are “a powerful way to get companies
to come back to the USA.” Mr. Trump can’t
do much more than point to anecdotes of
companies returning to the United States.
But the broader trend tells a different
story. Most companies can’t afford to shift
their supply chains to use domestically

produced parts or move their production
back home. Data show that when compa-
nies leave China, they’re going to other
countries in Southeast Asia.
Even the Commerce Department ac-
knowledges that companies face a tariff-
related “challenge” when thinking about
coming back here. Expect this trend to
continue because the future of most man-
ufacturing in America, including the auto-
mobile industry, is in exporting. Rising
production costs in the United States
mean that to stay competitive, an increas-
ingly large number of businesses will shift
their production abroad.
It means fewer manufacturing jobs
here than otherwise, not more.
Tariffs are just not a good way to sustain
a domestic manufacturing revival. After
picking up some steam in 2017 and 2018
thanks to deregulation and tax reform, the
manufacturing sector is cooling down.
The latest jobs report shows that in 2019,
manufacturing employment has risen by
a monthly average of 5,000 jobs. In 2018,
that number was 22,000.

CLAIM 3On the same day last year that
Mr. Navarro was talking nonsense, the
president tweeted that “trade wars are
good, and easy to win.” Wrong again. In-
stead, we found out that they are bad, and
difficult to wind down.
Meanwhile, the trade war has pushed
our trading partners to sign deals not with
us, but with one another. The list includes
Japan and Europe, Europe and the Merco-
sur zone in South America, and Europe
and Mexico. As Chad Bown of the Peter-
son Institute for International Economics
documented, China’s tariffs against the
United States rose to 20.7 percent last
June from 8 percent in January, 2018 —
but its tariffs against all other countries
went down from 8 percent to 6.7 percent
during that same period.

CLAIM 4“Our great Patriot Farmers will
be one of the biggest beneficiaries” of the
trade war with China, Mr. Trump tweeted
in May. Also wrong. Farmers have suf-
fered on all fronts in this trade war. For
starters, they saw their production ex-
penses rise thanks to the metal tariffs that
increased the cost of farm equipment.
Farmers have been devastated by the
retaliation from many countries. For in-
stance, soybean exports to China this year
will most likely be one-third of what they
were last year. If farmers did so well under
Trump’s trade war, he wouldn’t need to
provide them with $28 billion in aid.

CLAIM 5Mr. Trump said that he would
wipe away the trade deficit. Aside from
the fact that this is a foolish goal, his trade
disputes have achieved quite the opposite.
As my colleague Dan Griswold wrote, dur-
ing Barack Obama’s second term, the
monthly trade deficit in goods and serv-
ices averaged $40.7 billion; under Presi-
dent Trump the monthly deficit has aver-
aged $50.1 billion.
A reduction in the bilateral trade deficit
is a meaningless measure of success be-
cause when one deficit goes down, many
others go up. Case in point: The deficit
with China is going down, but it has been
more than offset by rising deficits else-
where, including with Vietnam and Mex-
ico. So even by the president’s own mer-
cantilist standard, he is failing.
The bottom line is that pretty much ev-
erything Mr. Trump has promised on the
trade front by imposing tariffs hasn’t
panned out, even if the president persists
in saying the opposite. 0

Trump’s

Trade

Delusions

Veronique de Rugy

Claims on how tariffs

are working don’t hold

up under scrutiny.

VERONIQUE de RUGY is a senior research
fellow at the Mercatus Center at George
Mason University.

M

Y WIFE, Liz Bruder, and I were married on Oct. 8, 1994, in City Hall by Mayor Ru- dolph Giuliani. For 25 years, I carried a wallet-size photo of the three of us from that day. Liz and I met working on Mr. Giuliani’s 1993 mayoral campaign. She was the dep- uty finance director and I was the spokes- man. Our small paid staff and hundreds of volunteers worked tirelessly to elect Rudy after he had narrowly lost to the in- cumbent, David Dinkins, in 1989. Rudy told The New Yorker in January that he doesn’t think about his legacy but is afraid that “Rudy Giuliani: He lied for Trump” will be on his gravestone. “Some- how, I don’t think that will be it,” he said. “But, if it is, so what do I care? I’ll be dead.” He may not care, but anyone who worked on his winning campaigns in 1993 and 1997 or in City Hall during his two terms as mayor does care about his legacy — and theirs. We were proud to live and work in the clean, safe, prosperous city that Rudy ran. “America’s Mayor,” as he was called after Sept. 11, is today Presi- dent Trump’s bumbling personal lawyer, henchman and defender of the indefensi- ble. Friends and family constantly ask me: “Has he lost it? How could you work for a guy like that?” At a recent dinner party, a stranger suggested that I’m not legally married because Rudy, a three-time loser at marriage, officiated our wedding. He wasn’t always like this. I was a partner in a successful consult- ing firm, fed up with living in a dangerous, dirty city when I went to work on Rudy’s

1993 mayoral campaign. On Dec. 10, 1992, I watched Citizen Rudy heroically race into the Church of St. Agnes in Manhattan when a fire broke out. He emerged leading the parishioners and carrying the chalice, his suit jacket covered in soot. That was the Rudy I admired. My work with Rudy peaked on Election Day 1993, when his two-point victory over Mr. Dinkins reversed a two-point loss in

After celebrating with Rudy, his
family, friends and our campaign team, I
slept on the floor of his Hilton hotel suite.
The next morning, I accompanied him
downstairs to shoot his scene for a “Sein-
feld” episode on nonfat yogurt. The fol-
lowing day, I left for a private sector com-
munications job.
Last year, I declared my continuing re-
spect for Rudy in an op-ed article in The
New York Daily News. I argued that his
unwavering defense of the president re-
flected his instinctive hardball person-
ality — and that playing hardball required
guts and conviction. But in truth, Rudy
had already begun to turn me off.
On Oct. 9, 2016, he appeared as candi-
date Trump’s lone campaign surrogate on
the Sunday morning political programs to
enthusiastically defend Mr. Trump’s in-
fantile 2005 “Access Hollywood” inter-
view as “locker room talk.” He said, “Men
at times talk like that.” I said to myself,
“No, Rudy, we don’t.”
Fast forward to Rudy’s Ukraine misad-
venture. This is not Rudy vigorously de-
fending Mr. Trump’s bad behavior. This is
Rudy, as a private citizen and personal at-
torney for the president, lamely acting as
a shadow secretary of state and Trump
enforcer by attempting to influence the
2020 election in favor of his client.
I’ve remained in regular contact with
my campaign colleagues, many of whom
served in senior-level positions in the Giu-
liani administration. The Ukraine story
has us burning up the phone lines. Even
former “Yes Rudys” have begun to ques-
tion their blind fealty to him.
Some longtime Giuliani intimates point
to the death on July 7, 2016, of his longtime
best friend and political adviser, Peter
Powers, as the moment that Rudy lost his
way. Others cite Rudy’s marriage in 2003
to Judith Nathan, his soon-to-be third ex-
wife, as transformational. Rudy was a
pizza and Diet Coke guy when I met him
in 1992. But he became a Hamptons so-
cialite and, worse yet, a Palm Beach
neighbor of Donald Trump.
After Rudy’s mayoralty ended in 2002,
he went to work for what seemed like ev-
ery rich bad guy and tin-pot dictator who
called. (So going to work for Mr. Trump
made sense.) He charged $100,000 for
self-aggrandizing speeches about his he-
roic leadership after Sept. 11. He became a
multimillionaire.
Rudy now does Donald Trump’s dirty
work: vainly trying to cover up the
Ukrainian cover-up and attacking a Dem-
ocratic presidential front-runner, Joe Bi-
den, and his son Hunter. Watching and
reading Rudy’s ferocious lying for Mr.
Trump, whether on Fox or CNN, forced
me to re-examine his past 25 years, espe-
cially the profiteering from Sept. 11. But
Ukraine was the coup de grâce. We who
admired him for so long expected much
more from Rudy Giuliani and his legacy.
That wedding photograph with Rudy? I
took it out of my wallet recently and put it
in a drawer, probably forever. 0

What

Happened

To Giuliani?

Ken Frydman

The man I worked for

is not the man who

now lies for Trump.

KEN FRYDMANis chief executive of Source Communications, a Manhattan strategic communications firm.

‘‘ I

’M USING Mexico to protect our border.” Millions of Americans didn’t even notice this recent re- mark made by President Trump. But Mexicans certainly did. They thought Mr. Trump’s words were a bla- tant attack on their nation’s sovereignty. Still, while the president’s statement was arrogant and offensive, it’s actually true. Mr. Trump made his comment about the border on Sept. 26, just two days after Nancy Pelosi, the Democratic speaker of the House, started a formal impeachment inquiry that could lead to the president’s removal from office. Yet sandwiched between the constant “witch hunt” accusations, Mr. Trump said something that hit a raw nerve. “I want to thank Mexico,” Mr. Trump continued. “Twenty-seven thousand soldiers they have. But think of how bad that is — think of it — where we use Mex- ico because the Democrats won’t fix our broken immigration system.” Almost 400,000 people have watched a video I posted on Twitter of Mr. Trump saying this. Some felt humiliated by the president’s statement. After all, a friend wouldn’t say to another friend that he’s using him, much less say it in public. But President Andrés Manuel López Obrador of Mexico (or AMLO, as he’s known) didn’t see it that way. “There’s nothing we should be ashamed of,” he said at a news conference. “We protect Mexico’s sovereignty. At the same time, we try to avoid confrontation.” A salient feature of Mexico’s foreign policy is precisely AMLO’s reluctance to confront anyone outside of the country. In short, American officials say what they want, and Mexico — almost always — goes along with it. The relationship poses a threat to Mexico: Mr. Trump has previously warned that he would impose tariffs if Mexico didn’t back his immigration agenda. Mexico may not have paid for the pres-

ident’s wall, but the country has, in effect, become Mr. Trump’s immigration police force. Mexico itself has become the wall. Recently the Ministry of Foreign Af- fairs in Mexico triumphantly announced a 56 percent decline in the number of Central American immigrants crossing Mexican territory between May and Au- gust. Why would Mexico force an entire family from Honduras or El Salvador to stay in Matamoros or Ciudad Juárez if the United States is where they really want to go? The answer, sadly, is clear: because that is exactly what the Ameri- can government wants. Mexico is ac- cepting tens of thousands of immigrants that Mr. Trump is refusing to take in. Mexico is now the United States’ safety valve. Mexico’s president “basically has ac- cepted all terms and conditions” set by the United States, Armando Santacruz,

president of Mexico United Against Crime, told me in an interview. “Yes, we are the wall.” And Mexico’s National Guard “is now spending a lot if its resources keeping immigrants away.” I don’t know where Mr. Trump came up with the 27,000 soldiers figure. Per- haps he was referring to the number of National Guard (or Guardia Nacional) troops currently protecting the Mexican border with Guatemala as part of an ef- fort to prevent Central Americans from entering the country en route to the United States. The National Guard was never meant to serve as an immigration agency for the United States. It was created to combat crime in Mexico — something it has failed to do. But Mexico is not only using the Na- tional Guard to turn away Central Ameri-

cans. It has also agreed to accept immigrants who are seeking asylum in the United States while their applications are being processed. The country is basically America’s waiting room. The Trump administration has placed great pressure on the Mexican economy to get what officials want, precisely at a time when financial indicators suggest a recession could be looming. Even so, we are talking about sovereignty, about dignity and basic respect for human rights, under circumstances where the safety of people fleeing gangs, violence and extreme poverty is at stake. Mexico should never forget that for decades it was an “immigrant ex- porter.” Now it must treat Central Ameri- cans with the same care and respect it has always demanded for Mexicans living in the United States. It’s true: President Trump isusing Mexico. And, against all logic, Mexico is letting him get away with it. This has to change. What can Mexico do? It must refuse to be Mr. Trump’s wall, to be the United States’ waiting room and safety valve. Mexico must re-embrace its honorable tradition of protecting the persecuted and most vulnerable, whether they’re fleeing civil war in Spain or crime and hunger in Central America. To President López Obrador, I say this: It is a mistake to place bets on Mr. Trump. This is something all his former friends have learned the hard way. Do you really want to be associated with the policies of a president who, according to a recent report in The Times, suggested shooting migrants at the border in the legs? Why haven’t Mexicans taken to the streets in outraged protest? Mr. Trump is on the wrong side of history. When he finally leaves office, his ac- complices and partners, inside and outside the United States, will be judged harshly for their misdeeds. There is still time to do the right thing. 0

Members of the Mexican National Guard along the banks of the Suchiate River at the border with Guatemala.

AGENCE FRANCE-PRESSE — GETTY IMAGES

Mexico Is the Wall

The country has, in

effect, become Trump’s

immigration police force.

JORGE RAMOS,an anchor for the Univision network, is a contributing opinion writer.

Jorge Ramos MIAMI

T

HE brilliant 2014 science fiction novel “The Three-Body Prob- lem,” by the Chinese writer Liu Cixin, depicts the fate of civilizations as almost entirely dependent on winning grand races to scientific milestones. Someone in China’s leadership must have read that book, for Beijing has made winning the race to artificial intelligence a national obsession, devoting billions of dol- lars to the cause and setting 2030 as the target year for world dominance. Not to be outdone, President Vladimir Putin of Rus- sia recently declared that whoever mas- ters A.I. “will become the ruler of the world.” To be sure, the bold promises made by A.I.’s true believers can seem excessive; today’s A.I. technologies are useful only in very limited circumstances. But if there is even a slim chance that the race to build stronger A.I. will determine the future of the world — and that does appear to be at least a possibility — the United States and the rest of the West are taking a surpris- ingly lackadaisical and alarmingly risky approach to the technology. The plan seems to be for the American tech industry, which makes most of its money in advertising and selling personal gadgets, to serve as champions of the West. Those businesses, it is hoped, will research, develop and disseminate the most important basic technologies of the future. Companies like Google, Apple and Microsoft are formidable entities, with great talent and resources that approxi- mate those of small countries. But they don’t have the resources of large countries, nor do they have incentives that fully align with the public interest. To exaggerate slightly: If this were 1957, we might as well be hoping that the commercial airlines would take us to the moon. If the race for powerful A.I. is indeed a race among civilizations for control of the future, the United States and European

nations should be spending at least 50 times the amount they do on public funding of basic A.I. research. Their model should be the research that led to the internet, funded by the Advanced Research Projects Agency, created by the Eisen- hower administration and arguably the most successful publicly funded science project in American history. To their credit, companies like Google, Amazon, Microsoft and Apple are spending considerable money on advanced research. Google has been willing to lose about $500 million a year on DeepMind, an artificial intelligence lab, and Microsoft has invested $1 billion in its independent OpenAI laboratory. In these efforts they are part of a tradition of pathbreaking corporate laboratories like Bell Labs, Xerox’s

Palo Alto Research Center and Cisco Sys- tems in its prime. But it would be a grave error to think that Silicon Valley has it all taken care of. The history of computing research is a story not just of big corporate laboratories but also of collaboration and competition among civilian government, the military, academia and private players both big (IBM, AT&T) and small (Apple, Sun). When it comes to research and develop- ment, each of these actors has advantages and limitations. Compared with government-funded research, corporate research, at its best, can offer a stimulating balance of theory and practice, yielding in- ventions like the transistor and the Unix operating system. But big companies can also be secretive, occasionally paranoid and sometimes just wrong, as with AT&T’s premature dismissal of internet technologies. Big companies can also change their priorities. Cisco, once an industry leader,

has spent more than $129 billion in stock buybacks over the past 17 years, while its chief Chinese competitor, Huawei, devel- oped the world’s leading 5G products. Some advocates of more A.I. research have called for a “Manhattan Project” for A.I. — but that’s not the right model. The atomic bomb and the moon rocket were gi- ant but discrete projects. In contrast, A.I. is a broad and vague set of scientific technologies that encompass not just recent trends in machine learning but also any- thing else designed to replicate or aug- ment human cognition. We don’t neces- sarily want a single-minded fixation on a particular idea of what A.I. will become. As it did with the internet research, the United States government should broadly fund basic research and insist on broad dissemination, with the exception of tools that might be dangerous. Not all government funding need go to academia: Pri- vate research institutions like OpenAI that are committed to the principled de- velopment of A.I. and the broad dissemination of research findings should also be potential recipients. In addition, United States immigration policy needs to allow the world’s top A.I. talent to come here. The history of break- throughs made by start-ups also suggests the need for policies, like the enforcement of antitrust laws and the defense of net neutrality, that give small players a chance. It is telling that the computer scientist and entrepreneur Kai-Fu Lee, in his book “A.I. Superpowers: China, Silicon Valley, and the New World Order,” describes a race between China and Silicon Valley, as if the latter were the sum total of Western science in this area. In the future, when we look back at this period, we may come to regret the loss of a healthy balance between privately and publicly funded A.I. research in the West, and the drift of too much scientific and engineering talent into the private sector. 0

America’s Risky Approach to A.I.

Tim Wu

Let’s stop pretending that

Silicon Valley can beat

China on its own.

TIM WU is a law professor at Columbia, a contributing opinion writer and the author of “The Master Switch: The Rise and Fall of Information Empires.”

The New York Times - 08.10.2019

Get our desktop app

Company

Features

Documentation

Resources