Trump’s Trade-War Strategy: Ready, Fire, Aim

Today’s Agenda

• Trade-war casualties
• Women in the workforce
• Trump plays the race card
• Supreme Court decisions
• Erdogan's win

Harley Catches a Trade-War Flat

(Bloomberg Opinion) -- The friendly-fire casualties are piling up in President Donald Trump’s trade wars.

Today’s most iconic, and ironic, victim was Harley-Davidson Inc., which said it would move some manufacturing overseas to protect itself from European Union tariffs, which were themselves reactions to Trump’s opening trade-war salvo against U.S. allies. 

The perfectly retributive justice of this is striking. Companies don’t come more “American” than Harley, in all its in-your-face glory. Trump has held it out as an example of how his tax-cutting and deal-making would Make America Great Again, because here was the quintessential American Company just waiting to be re-en-Greatened. But Trump’s moves keep backfiring on Harley, writes Brooke Sutherland. Before Monday’s announcement, it had already moved some work to Thailand as a result of Trump’s pulling out of the Trans-Pacific Partnership.

If Trump insists on trade-warring, he should be more careful choosing targets and weapons. Europe and China may be better armed, or at least seem to be smartly picking targets to inflict maximum political pain on Trump. He, on the other hand, “isn’t inclined to surgical strikes,” Brooke notes. His saturation-bombing-with-nukes approach means: 

• Harley has to move jobs overseas in order to keep selling Hogs in Europe, its second-biggest market;
• Even as Trump pushes for “energy independence,” his tariffs hurt American makers of pipes that carry American oil and gas; and
• The negative effects of tariffs on corporate coffers may wipe out the positive effects of tax cuts.

Meanwhile, Trump’s mulling of “emergency powers” to clamp down on technological trade with China puts many more U.S. companies in peril, Brooke writes. Because of that, the entire U.S. stock market – which has seemed mostly immune to trade-war worries (maybe because the Fed has enough rope to make a lifeline, suggests Tim Duy) – had a mini-freakout today. It was just a 1.3 percent drop on the S&P 500 and 2 percent on the Nasdaq. But these little injuries add up. And the Trade Wars have only just begun.

Welcome to Gilead

Here’s a embarrassing chart, at least if you’re an American:

Less than 20 years ago, the U.S. led the developed world, by a wide margin, in female labor-force participation. Now it’s been lapped, points out Noah Smith. Women here have left the workforce even as they joined it elsewhere. How did this happen? There are so many reasons! But two of the biggest are bad: Family-leave, child-care and other policies that help working women are stingier in the U.S. than in other parts of the world. And women bear the brunt of the opioid epidemic.

One thing that might help, just a little bit, is to finally ratify the Equal Rights Amendment, write Bloomberg’s editors. More than 46 years ago, Congress submitted this to states for ratification. It quickly got 35 favorable votes, just three shy of what it needed, before Phyllis Schlafly killed it. But Illinois recently became the 37th state to ratify it. Given the time that has passed and the fact that several states have withdrawn support, it’ll take a court battle to amend the constitution now. But it’s one worth fighting: “American women deserve an unambiguous endorsement of unassailable equal rights.”

Also by Bloomberg’s editors: The euro zone isn’t strong enough to handle another crisis.

The Racism Was in Our Hearts All Along

For a while there, after the election of Barack Obama, white Americans might have hoped racism had been consigned to the margins of our democracy. The election of Trump – somebody who has used racism as a tool for most of his public life – revealed the naivete of such hopes, writes Tim O'Brien.

Take the issue of stripping immigrant babies from their mothers and putting them in cages, while describing immigrants as vermin "infesting" the country. If anything, this has helped Trump's popularity with Republicans, points out Jonathan Bernstein. 

Supreme Court Watch

The Supreme Court has handed down many decisions over the past couple of weeks, and on the surface the theme is that the conservative justices are fully in charge. In Ohio v. American Express, for example, the court’s five conservatives made known their skepticism of antitrust law, points out Noah Feldman. In another case, Justice Anthony Kennedy also called for tossing aside something known as “the Chevron deference,” which has nothing to do with letting somebody cut in line ahead of you at a gas station, but rather a tradition that judges defer to regulatory agencies. This would seem bad news for liberals who like regulatory agencies to do stuff, Noah writes. But it could open the door for more judicial activism that liberals might favor.

Regional Autocrat Barely Wins Rigged Election

In the latest blow to democracy’s global survival chances, Turkish President Recep Tayyip Erdogan narrowly won another five-year term over the weekend. The thinness of his victory might suggest it was a fair election, but the system was heavily rigged in his favor, writes Leonid Bershidsky (and rigged in ways that are starting to seem familiar). And now Erdogan’s got years in which to rig away. His win is certainly not great news for Turkey’s beaten-down lira, writes Marcus Ashworth.

Chart Attack

Don’t let Google and Facebook’s show of humility about advertising fool you – they are ambitious about dominating the business, writes Alex Webb.

General Electric Co. still seems to be nickel-and-diming it, writes Brooke Sutherland.

Speed Round

Maybe Boris Johnson and other Brexiteers shouldn’t chase businesses away from the UK. – Chris Bryant

Michigan State University is selling bonds to cover the cost of its Larry Nassar settlement; should you buy them? – Brian Chappatta

Truck drivers are a dying breed in America. – Virginia Postrel

What a turnabout from the ‘90s: Japan’s the safe haven, while the U.S. has the zombie companies. – Shuli Ren

Google Glass is still around, still bad for humanity. – Cathy O’Neil

ICYMI

Toys ‘R’ Us may live again. Hedge funds cleaned up on the Brexit vote. The FDA approved a pot-based medicine.

Kickers

I delivered packages for Amazon, and it was a nightmare.

Scientists keep putting bigger things in quantum states.

The AV Club’s favorite books of 2018 so far.

The AV Club’s favorite podcasts of 2018 so far.

Note: Please send Schroedinger’s cats, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

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To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net

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