Economy

How America’s Decline Began

Steven Brill: “The story of America’s tailspin is not about villains, though there are some. It is not about a conspiracy to bring the country down, nor did it spring from one single source… But there is a theme that threads through and ties together all the strands: many of the most talented, driven Americans used what makes America great—the First Amendment, due process, financial and legal ingenuity, free markets and free trade, meritocracy, even democracy itself—to chase the American Dream. And they won it, for themselves.”

“Then, in a way unprecedented in history, they were able to consolidate their winnings, outsmart and co-opt the forces that might have reined them in, and pull up the ladder so more could not share in their success or challenge their primacy.”

Health Care Tops Economy as Biggest Issue

A new CBS News poll finds that “health care tops the list of most important issue for voters, ahead of the economy — and by two to one voters say they’ve been hurt, not helped, by the GOP’s changes to the health care laws.

“Few Americans — only 15% — feel that the recent changes to health care laws made by Republicans have helped them and their family.”

Unemployment Rate Drops Below 4%

The unemployment rate has dipped below 4% for the first time since 2000, CNN reports.

New York Times: “April marked the 91st consecutive month of job gains, far and away the longest streak of increases on record. The average monthly gain has declined each year since 2014, but that’s normal for an economy that’s been in recovery for such an extended period.”

Trump’s Tariffs Could Cost GOP Control of Congress

Joshua Green: “Farm districts… put Trump in the White House and are the backbone of the GOP majorities in Congress. They’re also uniquely positioned to suffer from a trade war with China. In early April, responding to Trump’s proposed $50 billion in tariffs on Chinese goods, China announced or implemented retaliatory levies on roughly $50 billion in U.S. exports, including wheat, corn, cotton, sorghum, tobacco, and soybeans—a direct strike at the deep-red, Trump-friendly heartland.”

“It’s also a strike at the Trump voters the GOP is depending on to show up in November. According to data compiled by Bloomberg measuring which U.S. congressional districts rely most on soybeans for economic activity, far more GOP than Democratic districts will suffer… But party affiliation alone doesn’t capture the extent to which Trump voters stand to be hurt: Of the 30 districts most reliant on soybeans, Republicans represent 25 and Democrats 5; all voted for Trump in 2016.”

Said one frustrated GOP strategist: “It’s like he’s microtargeting policy to screw his own supporters.”

U.S. Allies Brace for Trade War

“A few weeks ago, it felt as if a trade war pitting the United States against allies like Australia, Canada and the European Union was over before it even began. The Trump administration dispensed so many temporary exemptions to steel and aluminum tariffs that many countries figured the threats were just political theater,” the New York Times reports.

“But with only days left before the exemptions expire and punitive tariffs take effect, it’s dawning on foreign leaders that decades of warm relations with the United States carry little weight with a president dismissive of diplomatic norms and hostile toward the ground rules of international trade.”

Lawmakers Concerned a New NAFTA Deal Wouldn’t Pass

Playbook: “Senior Republican aides on Capitol Hill are growing increasingly concerned about their ability to ratify a NAFTA deal that the White House cuts. They worry that if the president’s negotiators come to an agreement in the coming months, they will not have the support to pass it. It’s the middle of an election year, and trade politics are particularly thorny on Capitol Hill.”

“It is getting almost no attention but Congress would have to ratify a new NAFTA deal — Trump can’t do this alone. The Trump administration has done absolutely nothing to prepare the Hill for a bruising trade vote in the middle of an election year, according to key aides involved. GOP leadership is well aware of the void. When the Trans-Pacific Partnership cleared the Capitol, it benefited from a multi-year, multi-million dollar lobbying campaign.”

Politico: “One strategy that has seemed to gain favor is to force a congressional approval on the new NAFTA by withdrawing from the existing pact even before the new one is ready. The thinking is that Congress will have to approve whatever terms are in the new deal quickly, lest the U.S. is left hanging without an agreement with two of its largest trading partners.”

Winging a Trade War

Jonathan Swan: “When the president threatened China with $100 billion in new tariffs, there had hardly been any White House discussion.”

“There wasn’t one single deliberative meeting in which senior officials sat down to debate the pros and cons of this historic threat. Trump didn’t even ask for advice from his new top economic adviser, Larry Kudlow, instead presenting the tariffs as a fait accompli. Chief of Staff John Kelly knew Trump wanted more tariffs but was blindsided by the speed of the announcement. And Legislative Affairs Director Marc Short — the White House’s liaison to Capitol Hill — was totally in the dark.”

“Trump had melted down Capitol Hill and roiled the markets with zero substantive internal debate.”

Trump Faces Backlash from Farmers

“As President Trump moves to fulfill one of the central promises of his campaign — to get tough on an ascendant China — he faces a potential rebellion from a core constituency: farmers and other agricultural producers who could suffer devastating losses in a trade war,” the New York Times reports.

“Mr. Trump’s threat to impose tariffs on Chinese goods came with a presidential declaration that trade wars are good and easily won. But the action has injected damaging uncertainty into the economy as Republicans are already struggling to maintain their hold on the House and the Senate in a difficult election year.”

Kudlow Didn’t Know About Trump’s Latest Tariff Move

National Economic Council Director Larry Kudlow “was apparently blindsided Thursday night by President Trump’s threat to impose an additional $100 billion in tariffs on Chinese imports,” Politico reports.

“Asked by reporters Friday when he first learned of the president’s decision to instruct his top trade official to consider the new tariffs, Kudlow took a lengthy pause before responding: ‘Last evening.’ The White House statement announcing the move went out shortly after 6:30 p.m. Eastern Daylight Time.”

Romney Sides with Trump on Tariffs

U.S. Senate candidate Mitt Romney (R) sees President Trump’s proposed $100 billion in new tariffs on China as a shot across the bow but doesn’t think it would lead to trade war, the Deseret News reports.

Said Romney: “I think the president is leading with some policies that will wake up our friends in China and they’ll recognize that business as usual is going to have to change. China over the years has taken advantage of the attitude in America, which is we haven’t watched very closely and they’ve been cheating.”