Posted on 06/05/2023 3:39:20 AM PDT by FarCenter
Neoliberalism is out and neo-mercantilism in as US decoupling from China abandons adherence to rules-based, free market trade
Speaking at the Brookings Institution in April 2023, US National Security Advisor Jake Sullivan declared national security and industrial policy as the guiding lights for US trade. Sullivan couched his prescriptions in soft tones and catchy phrases. “Decoupling” is out, “de-risking” is in.
The goal is to “forge a new consensus” — something different to the market-oriented Washington Consensus of yesteryear. National security restrictions have their limits set in a “small yard, high fence.”
US security is not trying to engage in a “technology blockade” against China but rather on a “level playing field.” The phrasing recalls Napoleon’s remark of an “iron fist in a velvet glove.”
Embedded in Sullivan’s remarks were familiar neo-mercantilist themes. These include that post-Second World War trade agreements did little to improve US life and, at most, only enriched wealthy Americans instead of working people. Neo-mercantilist themes also suggest that industrial policy is essential to spark innovation in neglected sectors.
They emphasize that allies should accept heavy US subsidies even when they attract private investment to US shores and that national security, broadly defined, must take precedence over market forces.
Not surprisingly, Sullivan’s speech brought cheers from the deacons of neo-mercantilism. Clyde Prestowitz, an independent columnist, applauded Sullivan for turning his back on free trade and globalist policies. Todd Tucker of the Roosevelt Institute warmly endorsed Sullivan for embracing industrial policy and “moving away from a moribund neoliberalism.”
Oren Cass of American Progress quibbled that “decoupling is essential” and admonished Sullivan for not carrying the ascendancy of national security and industrial policy far enough.
Sullivan and his supporters dismiss fundamental facts. Post-war liberalization, accompanied by revolutions in transportation and communications, raised living standards for billions of people. Gains to the United States alone now amount to more than US$2 trillion annually, some 10% of GDP.
Despite its declining popularity, trade still commands majority support among Americans. Massive industrial subsidies that are awarded to select firms may fail to accelerate growth in the United States. Intense competition between leading firms — whether domestic or foreign — seems the better formula.
Sullivan on trade policy is like Kamala talking about AI
Whenever they are involved in anything, the result is an increase in their power, the waste of assets and resources, and the destruction of productivity.
Good God. This mouthpiece for the CCP has no shame, none at all.
You either have free and fair trade at one end of a spectrum, or you don't at the other end, and that is the end where Communist China resides.
The trade practices that are widespread and routine that Communist China engages in (at the direct, inflexible, governmental control and direction of the Chinese Communist Party) are anything but "free trade" in any kind of market.
“the market-oriented Washington Consensus of yesteryear”
I guess you could have blinked and missed that. Or, it’s the contradiction that it appears to be on its face. I think that the Republicans have generally been at least kind of market-oriented for a few decades; did the Democrats lie about it more effectively for some period of time?
Sorry but keeping our supply chain anchored in Communist China, after all that has been said and done over the past 5 years, is simply stupid. “De-coupling” from the CCP and re-industrializing the U.S. is absolutely the smart thing to do, and not continuing to buy the rope there with which to hang ourselves.
The USA is no longer spending treasure, jobs and blood to support global trade.
AMF-YOYO.
I sat in on a presentation by an economist last year who was discussing various forecasts about the U.S. economy. He was absolutely certain the inflation we were starting to see was not going to be “transitory,” and he based that on changes in our trade policy. One quote stood out to me: “As we de-couple from China and repatriate more industry here, we are going to see how much it really costs to produce things.”
Say it again!
Which never existed with China, which has practiced a ruthless mercantilism ever since it was granted access to the US and every other world market.
You can’t have free trade with people who themselves are not free.
What if we traded with the Japanese in the 1920s like we are with China now?
And back then Japan wasn’t our enemy.
I watch and listen to these “lawmakers” and “policymakers” in Washington. Absolutely nothing makes be at all confident that they aren’t steering us into catastrophic problems.
All depends on who your competitors are...
The USA cannot compete against countries like China, India, and Mexico, which do not have highly restrictive labor and environmental laws.
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