Mnuchin Fends Off Push to Reject Protectionism

Treasury Secretary Steven Mnuchin “rebuffed a concerted push by world finance chiefs Saturday to disavow protectionism, fanning fears that the Trump administration’s pursuit of an ‘America First’ policy could ignite global trade conflicts,” the Wall Street Journal reports.

“Instead of hammering out a compromise that allayed those fears, finance ministers and central bankers from the Group of 20 largest economies ended two days of negotiations in stalemate. Their keenly anticipated joint statement papered over differences on trade and largely reiterated a series of longstanding promises to boost growth, avoid currency devaluations and ward off threats to the global economy.”

World Moves On Without U.S. On Trade

Politico: “Here’s what happens when the U.S. pulls out of a major trade deal [like TPP]: New Zealand seizes the opportunity to send more of its milk and cheese to China. Japanese consumers pay less for Australian beef than for American meat. Canadians talk about sending everything from farm products to banking services to Japan and India.”

“Other countries are ready to rush into the vacuum the U.S. is leaving behind, negotiating tariff-cutting deals that could eliminate any competitive advantage for U.S. goods.”

Republicans Pose Challenge to Trump Trade Agenda

“Republican lawmakers are showing increasing resistance to President Trump’s trade agenda, worried that his plans could hurt exports from their states and undermine longstanding U.S. alliances,” the Wall Street Journal reports.

“The concerns indicate that the biggest threat to Mr. Trump’s trade policy—which emphasizes new bilateral deals and a tougher stance against countries blamed for violating trade rules—is coming from his own party. The opposition from Republicans, who control both chambers of Congress, stands to complicate Mr. Trump’s efforts to overhaul the North American Free Trade Agreement, or Nafta, and tackle alleged trade violations in China.”

Mulvaney Says Obama Was Faking Jobs Data

Trump budget chief Mick Mulvaney told CNN that the Obama administration was “manipulating” jobs data.

Saiod Mulvaney: “What you should really look at is the number of jobs created. We’ve thought for a long time, I did, that the Obama administration was manipulating the numbers, in terms of the number of people in the workforce, to make the unemployment rate — that percentage rate — look smaller than it actually was.”

Quote of the Day

“Mr. Trump likes to say that he ‘inherited a mess.’ That was true for President George W. Bush, who came into office in the aftermath of the dot-com bust. And it was especially true for President Barack Obama, who was elected in the midst of a financial crisis. But that is not at all true today.”

— Bush economic adviser Gregory Mankiw, writing in the New York Times.

White House Staffers Battle Over Trade Policy

“A civil war has broken out within the White House over trade, leading to what one official called ‘a fiery meeting’ in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street,” the Financial Times reports.

“According to more than half a dozen people inside the White House or dealing with it, the bitter fight has set a hardline group including senior adviser Steve Bannon and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Mr Trump’s National Economic Council.”

“The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists… The battle over trade is emblematic of a broader fight on economic policy within the Trump administration.”

Job Growth Picks Up Pace

“Employers added 235,000 workers to their payrolls in February, the government reported on Friday, a hefty gain that clears the path for the Federal Reserve to raise its benchmark interest rate when it meets next week,” the New York Times reports.

“The official jobless rate fell to 4.7 percent while average hourly earnings grew by 0.2 percent in a report that overlaps with President Trump’s first full month in office.”

Trump Says Spending Will Be Paid for By Strong Growth

President Trump said he believes the extra $54 billion dollars he has proposed spending on the U.S. military will be offset by a stronger economy as well as cuts in other areas, Reuters reports.

Said Trump: “I think the money is going to come from a revved up economy.”

He added: “I mean you look at the kind of numbers we’re doing, we were probably GDP of a little more than 1 percent and if I can get that up to 3 or maybe more, we have a whole different ball game. It’s a whole different ball game.”

Trump’s Promised Stimulus Won’t Happen This Year

Stan Collender: “Donald Trump’s insistence that his tax and spending plans will provide an immediate kick to the U.S. economy and Wall Street’s belief that the new administration’s budget policies will lead to a quick boost in corporate profits now need to be tempered with a big dose of economic reality: The president’s promised fiscal stimulus isn’t going to be enacted or take effect any time soon. If it happens at all, the soonest the economy will begin to feel the impact of a Trump stimulus is in federal fiscal year 2018, that is, starting 7 months from now on October 1. And even October 1 is optimistic.”

“Part of the reason for this is how long it’s taking for Congress to do what the day after Election Day was considered to be a slam-dunk: repeal the Affordable Care Act. The controversy between and among congressional Republicans is now so multifaceted, heated and chaotic that the delay could soon make it far more difficult for the House and Senate to deal with both ACA and tax reform.”

U.S. Sees Major Drop In Tourism

Frommers: “Though they may differ as to the wisdom of the move, the travel press and most travel experts are of one mind: They are currently drawing attention to an unintended consequence of the Trump-led efforts to stop many Muslims from coming to the U.S., pointing to a sharp drop in foreign tourism to our nation that imperils jobs and touristic income.”

“It’s known as the ‘Trump Slump.’ And I know of no reputable travel publication to deny it.”

“Thus, the prestigious Travel Weekly magazine (as close to an ‘official’ travel publication as they come) has set the decline in foreign tourism at 6.8%. And the fall-off is not limited to Muslim travelers, but also extends to all incoming foreign tourists. Apparently, an attack on one group of tourists is regarded as an assault on all.”

A Broken Century

David Brooks: “Most of us came of age in the last half of the 20th century and had our perceptions of “normal” formed in that era. It was, all things considered, an unusually happy period. No world wars, no Great Depressions, fewer civil wars, fewer plagues.”

“It’s looking like we’re not going to get to enjoy one of those times again. The 21st century is looking much nastier and bumpier: rising ethnic nationalism, falling faith in democracy, a dissolving world order.”

“At the bottom of all this, perhaps, is declining economic growth.”