Economy

Trump May Not Get the Win He Seeks in NAFTA Talks

Politico: “As a candidate, Donald Trump constantly called NAFTA the worst trade deal in history and promised ‘to get a better deal for our workers.’ Now that he is president, Trump is about to find out how hard it is to get an agreement that satisfies not only those workers who feel ‘shafted by NAFTA’ but also the powerful business interests currently benefiting from billions of dollars in cross-border sales.”

“Top trade officials from the United States, Canada and Mexico sit down on Wednesday to begin thrashing over hundreds of issues as distinct as Canadian dairy barriers and digital trade issues affecting both countries.”

Our Broken Economy, In One Chart

David Leonhardt: “The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich.”

“In recent decades, by contrast, only very affluent families — those in roughly the top 1/40th of the income distribution — have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else.”

Trump’s Low Numbers Come Despite Good Economy

First Read: “What’s especially striking about Trump’s low approval numbers (in the CNN, CBS, Quinnipiac, and Gallup polls) is that they’re coming during relatively good economic times.”

“Indeed, in the same CNN poll showing Trump’s approval rating at 38 percent, 53 percent of Americans say things are going very well/fairly well in the country. And that raises the question: What happens to Trump’s numbers if/when the unemployment rate creeps up? Because right now, most Americans aren’t judging Trump on his stewardship of the economy.”

Exchange of the Day

President Trump spoke to Maggie Haberman of the New York Times:

HABERMAN: “Am I wrong in thinking — I’ve talked to you a bunch of times about this over the last couple years, but you are generally of the view that people should have health care, right? I mean, I think that you come at it from the view of …”

TRUMP: “Yes, yes. [garbled]”…

TRUMP: “It’s been a long time. Nothing changes. Wait till you see what we’re going to do on trade.”

HABERMAN: “Sounds like it’s going to be very interesting.”

TRUMP: “Much more interesting than anybody would understand.”

Hopes of ‘Trump Bump’ for U.S. Economy Fade

New York Times: “While the June jobs report, coming on Friday, is expected to show that hiring continued at a healthy pace last month, other recent indicators in areas like consumer spending, construction and auto sales have been decidedly less robust.”

“As a result, Wall Street forecasters have been busy lowering their growth estimates for the second quarter, which ended last Friday, much as they were forced to do over the first three months of the year. Economic expansion for the full year now appears unlikely to be much greater than 2 percent — about the average for the current recovery, which celebrates its eighth year this month.”

Trump Plots a Global Trade War

Mike Allen: “In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.”

“Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.”

“The reason, we’re told: Trump’s base — which drives more and more decisions, as his popularity sinks — likes the idea, and will love the fight.”

Paris Deal Isn’t About Climate for Trump

Axios: “The most revealing moment of President Trump’s announcement that he is withdrawing from the Paris climate deal came in an off-hand response of a White House official after Trump’s speech. Asked whether Trump thinks climate change is real, the official said: ‘Can we stay on topic?'”

“To the Trump administration, the Paris climate deal has nothing to do with climate change. It’s an economic issue. To Trump, withdrawing from the accord represents a triumph of populist America over greedy globalism.”

“Unlike other policy goals (healthcare and tax reform) Trump isn’t even acknowledging climate change is a problem. That makes his overtures about being open to renegotiate and re-enter the Paris deal suspect.”

Rural America Is the New ‘Inner City’

“A Wall Street Journal analysis shows that since the 1990s, sparsely populated counties have replaced large cities as America’s most troubled areas by key measures of socioeconomic well-being—a decline that’s accelerating.”

“In terms of poverty, college attainment, teenage births, divorce, death rates from heart disease and cancer, reliance on federal disability insurance and male labor-force participation, rural counties now rank the worst among the four major U.S. population groupings (the others are big cities, suburbs and medium or small metro areas).”

“In fact, the total rural population—accounting for births, deaths and migration—has declined for five straight years.”

Tourism In U.S. Has Dropped Since Trump Elected

Business Insider: “America’s share of international tourism has dropped 16% in March, compared to the same month in 2016.”

“The decline began in October 2016, the month before the presidential election. From October to March, tourism-related traffic has fallen an average of 11% in the US, compared to the previous year. Meanwhile, tourism in the rest of the world has increased 6% year-over-year during the same period.”

Exchange of the Day

The Economist interviewed President Trump, who claimed he came up with a new phrase:

ECONOMIST: But beyond that it’s OK if the tax plan increases the deficit?

TRUMP: It is OK, because it won’t increase it for long. You may have two years where you’ll… you understand the expression “prime the pump”?

ECONOMIST: Yes.

TRUMP: We have to prime the pump.

ECONOMIST: It’s very Keynesian.

TRUMP: We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?

ECONOMIST: Priming the pump?

TRUMP: Yeah, have you heard it?

ECONOMIST: Yes.

TRUMP: Have you heard that expression used before? Because I haven’t heard it. I mean, I just… I came up with it a couple of days ago and I thought it was good. It’s what you have to do.