Is Trump finally getting a reality check on trade and China?

The news isn't good.  Actually, it's terrible.

This past year, America's overall trade deficit in goods and services grew by 12 percent to $566 billion.  The trade gap hasn't been this wide since back in 2008.  The country responsible for the lion's share of this deficit is you know who: China.  The U.S. trade gap with China rose to $375 billion, up from $347 the year before – an 8-percent increase.  Doing the math, China accounts for over 60 percent of our trade imbalance.  This is a particular problem for President Trump, especially because, to date, his fire-and-brimstone rhetoric on the campaign trail regarding trade has not been adequately matched by his actions as president.

To Trump's credit, he has assembled a formidable America First "trade troika" consisting of secretary of commerce Wilber Ross, Jr.; White House trade adviser Peter Navarro; and Robert Lighthizer, U.S. trade representative.  This is a team that is not about to lie down for the globalists, the "free" traders, or the Wall Street Journal.  The president has also slapped a 30% tariff on solar panels and washing machines (washing machines?) aimed essentially at China.  Trump's trade team continues to urge him to impose additional tariffs on steel and aluminum and to be more aggressive in punishing China for its continual theft of U.S. intellectual property.

If his first year in office has shown anything, it's that Donald Trump is not shy about pushing his agenda.  So the question is, why is he seemingly dragging his feet on trade when he knows that from the days of Alexander Hamilton up to the end of WWII, the U.S. has prospered with high tariffs to protect its industries and American workers?  The best possible explanation is that there has been a standoff between the America First troika and the trade doves both within and outside the White House.  This latter group consists of the likes of national economic adviser Gary Cohn; chief of staff John Kelly; secretary of state Rex Tillerson; and the CEOs of the big global companies like Boeing, G.M., and Apple, all of whom derive sizable profits from business with China.

What has likely stayed Trump's hand up until now from ending this stalemate is North Korea.  That is, the president hoped that if he went easy on China regarding its mercantilist trade policies, China would then cooperate with the U.S. in resolving the North Korea situation.  This might not have been a bad move on Trump's part, given that Kim Jong-un is a certifiable loon with nuclear weapons.

But alas, the hope was in vain.  As is often the case, China – like so many other countries in the world – took solid concessions from an often clueless America while giving nothing but hollow words in return.  Not only that, but good evidence is emerging that China is actually helping North Korea get around the existing sanctions. 

Where does all this leave us?  It seems that three things are converging that indicate a trade war with China just over the horizon.  Better said is that events are pushing the U.S. to finally man the ramparts to defend its middle class and workers from predatory trade practices by China and other countries like Germany and Mexico.

These events stand against the background of certain truths:

1. Trump's campaign promises on trade must be realized if he's to have credibility.

2. The growing trade deficit is intolerable and a major embarrassment to the Trump administration.

3. It is now clear that China has no intention other than paying lip service to help solve the North Korea situation.

Given the realities of today, a full blown trade war, as unfortunate as it may be to the globalists, might be what is necessary to reset trading arrangements to something that is actually fair to America.  As things now stand, the world is using the U.S. to absorb its excess labor via immigration and its products, often made with factories transplanted from our heartland and U.S. technology.  This status quo has pummeled our middle class.  It can't be allowed to continue, trade war or not.  

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