MICHAEL BARONE: Trying To Take Trump Seriously.
Their deep reduction in the corporate tax rate, from the highest in the developed world to below average, obviously incentivized both U.S.- and foreign-based firms to invest here. Trump’s rejection of the Trans Pacific Partnership and renegotiation of NAFTA, in Cowen’s view, will make lesser-developed Asian nations and Mexico less attractive alternatives to the U.S. for investors.
Trump critics are right to say that this upends—the regnant cliché—the thrust of American policy since the years just after World War II. Then there was bipartisan agreement on encouraging free trade and foreign investment, as economist Douglas Irwin writes in Clashing Over Commerce. Europe was in ruins and voters thought its revival was in our interest.
But that was 70 years ago, and economic situations seldom remain static so long. A revived Europe has turned sluggish, while low-wage nations in Asia, Latin America, and even Africa are open for investment. First Japan, then China, now others will be moving up as competitors.
America has proved competitive at the top levels. But a country whose labor force is always going to include many low-skill workers may have some continuing interest in incentivizing low-skill employment. That’s not Cowen’s view or mine, but it’s apparently President Trump’s. Maybe it’s not just dismissible as crazy ranting.
Something similar may be said for the Trump foreign policy, considered as a perhaps unstable amalgam of his sober drafted national security Strategy and his sometimes impulsive tweets. This view explicated by David P. Goldman, writing this month in the Asia Times.
Trump’s view, Goldman argues, is of an America that is more competitive than cooperative, not necessarily hostile to others but not willing to rely on assertions of abstract common interests. “Competition does not always mean hostility, nor does it inevitably lead to conflict—although none should doubt our commitment to defend our interests.”
The national security strategy has a tough enough approach to Russia to disabuse all but the most dogmatic believers of the notion that Trump is Russian President Vladimir Putin’s Manchurian candidate. It is sharply critical of some actions by President Xi Jinping’s China. It drops former President George W. Bush’s earnest promotion of democracy in the Middle East and former President Barack Obama’s gauzy faith that Iran will abandon its nuclear weapons program and become a normal constructive power in the region.
Read the whole thing.