Showing posts with label trade. Show all posts
Showing posts with label trade. Show all posts

Monday, February 17, 2025

Economic Theories That Disagree with Trump's Tariff Policy


Donald Trump has long argued that global trade rules are unfair to the U.S. because he believes they disadvantage American industries, favor foreign competitors, and lead to trade deficits. His perspective is rooted in a mercantilist view of trade, where a trade deficit is seen as a sign of economic weakness. He has criticized institutions like the World Trade Organization (WTO) for not doing enough to prevent what he sees as unfair practices by countries like China. His approach to trade policy emphasizes bilateral deals and the use of tariffs as leverage to renegotiate trade terms in favor of the U.S.

Economic Theories That Disagree with Trump's Tariff Policy

Several mainstream economic theories challenge Trump’s view and the use of widespread tariffs:

  1. Comparative Advantage (David Ricardo)

    • This principle suggests that countries should specialize in producing goods they make most efficiently and trade for the rest. Tariffs distort this natural allocation of resources, making economies less efficient.

  2. Free Trade Theory (Adam Smith)

    • Smith argued that free markets and open trade increase wealth for all nations. Tariffs create inefficiencies, raise prices for consumers, and reduce economic growth.

  3. New Trade Theory (Paul Krugman)

    • This theory acknowledges that while some government intervention can be useful in developing industries, broad-based tariffs harm competitive industries, restrict innovation, and trigger retaliation.

  4. Global Supply Chain Economics

    • Modern trade involves complex global supply chains. Imposing tariffs raises costs for American companies that rely on foreign components, making U.S. goods more expensive both domestically and internationally.

Potential Consequences of Imposing Tariffs

If Trump were to impose widespread tariffs, several outcomes could follow:

  1. Retaliation from Other Countries

    • Nations affected by U.S. tariffs would likely impose their own tariffs on American exports, making U.S. goods less competitive abroad.

  2. Higher Prices for American Consumers

    • Tariffs act as a tax on imports, raising the cost of consumer goods. Everyday items, from electronics to cars, would become more expensive.

  3. Disruptions in Supply Chains

    • U.S. manufacturers rely on global supply chains. Tariffs would increase production costs, making U.S. industries less competitive.

  4. Job Losses in Export-Dependent Industries

    • While tariffs might protect some domestic jobs in protected industries, they would hurt export-dependent sectors like agriculture, tech, and manufacturing.

  5. Financial Market Volatility

    • A trade war could lead to market uncertainty, discouraging investment and potentially triggering a downturn.

Global Reactions and Economic Impact

  1. China and the European Union (EU):

    • Countries like China, the EU, and Canada would likely impose reciprocal tariffs, targeting key U.S. industries such as agriculture, energy, and aircraft manufacturing.

  2. Shift in Global Trade Alliances:

    • U.S. allies may strengthen trade agreements with each other, further isolating America. This could accelerate the rise of China-led economic groups like the Regional Comprehensive Economic Partnership (RCEP).

  3. Global Slowdown:

    • If tariffs disrupt international trade, global GDP growth could slow, leading to reduced investment, falling stock markets, and lower consumer spending worldwide.

  4. Dollar Strength and Export Decline:

    • If tariffs drive uncertainty, investors might flock to U.S. assets, strengthening the dollar, making U.S. exports even more expensive and less competitive.

Conclusion

Trump’s tariff-heavy approach stems from a belief that trade deficits are a problem and that tariffs can coerce countries into better deals. However, most economists argue that tariffs ultimately harm both the U.S. and global economies by raising costs, disrupting supply chains, and provoking retaliatory measures. If implemented aggressively, Trump’s policies could trigger a trade war, cause economic slowdowns, and weaken U.S. influence in global trade governance.

@paramendrakumarbhagat

Trump's Tariff Policy: Economic Theories and Global Impact https://www.barackface.net/2025/02/economic-theories-that-disagree-with.html

♬ original sound Paramendra Kumar Bhagat
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Friday, December 13, 2019

Britain's Vote

Has the economic theory on trade been debunked by political process? I don't think that is the case. Trade leads to rises in productivity, but if the new riches are not widely shared, then the people will revolt. I think that is the message.

The UK is in a political funk. 52% of the voters voted for remain parties. And yet the results show a sweeping victory for the "Get Brexit Done" party. The country could use political reforms. But I don't see them coming.

If Brexit will happen, Scotland will break away. Northern Ireland might also. Europe is the "country" they might choose.

I think Boris Johnson and Donald Trump attempting a trade deal will be quite a horror show. The National Health Service will be part of the discussion. That will cause a lot of churn.

Socialism makes people uncomfortable. People clearly did not like the idea of someone like Corbyn coming anywhere close to 10 Downing Street. I think the vote was more about that than Brexit. Although clarity of message always helps. BoJo had great clarity. Corbyn was all over the map on the message. Was he for Brexit? Against? Was he for a second referendum?

This is a democratic downsizing of Britain. People are choosing this.

Plenty of Brits of South Asian origin are next in line for power. BoJo was London Mayor. So is Sadiq. BoJo's cabinet colleagues are several Indians. England + Wales might end up with a brown Prime Minister before 2030. That is one extrapolation.

It is still not computing. A hard Brexit will bring all sorts of horrors. I think, despite this vote, the negotiations with Europe will simply continue. A hard Brexit will form bread lines in England.

Britain's Brexit and the US-China trade war both point out the need for WTO reform. They don't suggest ending trade.

Most people lining up to replace Corbyn are women. I think that is positive.

There are those who are saying Labour lost this election, as well as the next one. One can't be so sure about that. Now BoJo has to deliver. That is the hard part. A clean Brexit is a fantasy, not a smart option. Britain has never been an island.

As for ideology, it is not that the market does not work. The market is not being allowed to work. Crony capitalism, bought capitalism is causing market distortions. It is not that democracy does not work. Democracy is not being allowed to work. A centrist leader who understands the implications of the impending fourth industrial revolution could build a counterweight. I have no idea who that is, or if someone of that description is waiting in the wings even.

In the US that might be a Pete-Yang ticket.

In the meantime, the world flirts with a willful global recession. You can badger trade for only so long before it has been too long.

What does Britain know and understand that France and Germany do not? All three are similar size economies.





U.K. Election Result Starts Clock on Brexit Talks With E.U. Few expect the negotiations on the country’s future trade and security relationship with the bloc to be quick or easy........... European leaders on Friday welcomed the clarity of the British election result, since they, too, want to “get Brexit done.” But Boris Johnson’s substantial majority will only start the clock on new negotiations about Britain’s future trading and security relationship with the European Union. ....... Few except Mr. Johnson expect the talks to be quick or easy. They can be quick, Brussels argues, if Britain agrees to keep its regulations and tariffs the same or very close to those of the bloc.......... But European leaders, in Brussels for the last day of a summit meeting, remain unsure whether Mr. Johnson, with his resounding mandate to ratify his Brexit deal by the end of January, will stick to his campaign pledge to finish any trade negotiation with the European Union by the end of 2020, or whether he will choose next summer to seek a year’s delay for longer talks.........

So long as the two sides are negotiating, Britain will be in a “transition” period, with its relationship with the European Union essentially unchanged, even if it will legally have ceased to be a member.

...... Brussels, in its conclusions on Brexit, is demanding a future relationship that “will have to be based on a balance of rights and obligations and ensure a level playing field.” That is Brussels-speak for British regulations and rules that do not diverge too far from Europe’s........ But if Mr. Johnson wants a free hand to make trade deals with the United States and other countries and to position Britain as more of a low-tax, light-regulation economy, Brussels will demand a tougher set of trade restrictions, unwilling to have a large competitor so close with significantly more favorable conditions for business and finance........ Mr. Johnson may favor a hard deadline, but that will put Britain, which will soon be negotiating from outside rather than inside the European Union, into a weaker position ......

The risk is that a quick trade negotiation, considered almost a contradiction in terms by trade experts, could fail, bringing Britain and Brussels back to the prospect of a “no deal” Brexit.

...... Many British businesspeople — and presumably some of the new Conservative Party members of Parliament from the industrial north of England — will want to be able to trade with Brussels with as little friction and paperwork as possible. That would mean closer alignment to the European Union than harder-line Brexiters advocate........ Leo Varadkar, the prime minister of Ireland, has managed his key goal: preventing the restoration of a hard border on the island with Northern Ireland. But he also wants to preserve close ties in a future relationship, he said on Friday — “a trade deal or trade deal plus” — to “ensure that we still have a tariff-free trade between Britain and the E.U. and a set of minimum standards.” ........ Prime Minister Viktor Orban of Hungary insisted that the less-affluent countries of Central Europe must get generous financial guarantees. “We cannot allow Brussels bureaucrats to have poor people and poor countries to pay the costs of the fight against climate change,” he said.

‘No ifs, no buts’: Johnson vows to get Brexit done after sweeping election win
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Sunday, October 20, 2019

India's Massive Unemployment Problem: China Actually Knows

India has a massive, massive unemployment problem. Even when there is some economic growth, the jobs are not being created. And China is one country that actually knows how to solve that problem. And it might even be eager to help.

That is why it is important to settle the border dispute with Pakistan. Because the same formula that will settle the dispute with Pakistan will also settle the long border dispute with China, the longest in the world.

The India-Pakistan border and the China-India border are unnecessarily militarized. Both need to be turned into trade membranes.

There is a region in Nepal called Karmali. It is right by Tibet in the west of Nepal. Karnali, about 500 years ago, used to be a prosperous empire, big enough to be called a civilization. Today Karnali is destitute. It has unimaginable poverty. It is because Karnali is like a house with all its windows closed. China has sealed the border with Tibet. That hampers trade or rather suffocates it.

Peace with Pakistan is important because peace with China is also important. Trade solves many problems. Peace is the greatest dividend of trade. Prosperity is secondary, but not minor.




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Sunday, September 29, 2019

Videos: India, Kashmir, Imran Khan, Saudi Arabia

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Friday, September 20, 2019

Modi's Big Political Mistake On Article 370 In Kashmir

The status quo was unsustainable. I grant you that much. But if the goal is lasting peace between India and Pakistan, the move just made by Modi and his Man Friday Amit Shah might not have been the best step forward.

First of all, let's start with the aspect that is black and white to me. Why do you have a curfew for so long? You have turned all of Kashmir into an open-air prison. You claim the move you just made is in the best interests of the people of Kashmir and their aspirations for peace and prosperity. Well then, let them speak. Let them come out into the streets and celebrate this wonderful move of yours. And if some want to peacefully protest, let them. Let the politicians out. Move Kashmir towards elections at the earliest.

I have long advocated that the key to permanent peace is for both countries to recognize the Line Of Control as the final border, and to boost trade and tourism across the border. That formula, applied between India and Kashmir, can then be taken also to the India China border, the longest disputed border in the world.

So you can say this abrogation of Article 370 is just a step in that direction. But a much better way would have been to take the people of Kashmir into confidence, to take the political leaders of Kashmir into confidence, to take Pakistan into confidence. Modi should have taken Imran Khan on his offer and organized summit talks, one attended not just by the Prime Ministers, but also by the two army chiefs, and the two intelligence chiefs.

And then the two could have agreed, let's leave the Pakistani Kashmir with Pakistan, and the Indian Kashmir with India, and let's pull back our troops and normalize the border. Let's now focus on trade and tourism. Let's compete to install full-fledged democracy across Kashmir. Let's compete on human rights.

After that summit and agreement with Imran Khan, Modi and team could then have taken people like Omar Abdullah and Mufti into confidence, and then the Article 370 could have been abrogated.

But now that where we are, the total focus has to be on restoring normalcy in Kashmir and heading towards elections. That is a black and white issue to me. And I will call out Delhi on that. Delhi is wrong to impose what looks like an indefinite curfew in Kashmir. That is wrong.

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Sunday, August 11, 2019

काश्मीर समस्या का समाधान कर्फ्यु और मार्शल लॉ नहीं हो सकता

इतिहास में क्या है उसी के तहत समस्या का समाधान ढुंढते रह जाएँगे तो फिर इतिहास में तो सब कुछ है। इतिहास में काश्मीर भारतका भी है और पाकिस्तान का भी। इतिहास में काश्मीर स्वतन्त्र देश भी है। इतिहास में भारत देश है भी और नहीं भी है। इतिहास में पाकिस्तान है भी और नहीं भी है। सिर्फ इतिहास को जिक्र कर के समस्या का समाधान ढूँढा नहीं जा सकता। इतिहास में तो एक से अनेक घाव हैं। पुरानी घावों को आप ताजा करेंगे?

इतिहास को बिलकुल नजरअंदाज भी नहीं किया जा सकता। लेकिन आपको सिद्धान्त पर चलना होगा। समस्या का समाधान सिद्धान्त पर चल के भी कठिन है लेकिन संभव है। कौन सा सिद्धान्त? कैसा सिद्धान्त? दुनियाकी सबसे बड़ी लोकतन्त्र का सिद्धान्त और क्या हो सकता है? लोकतन्त्र का सिद्धान्त।

जो लोकतन्त्र को मानते हैं वो ये मानते हैं कि ईश्वर ने प्रत्येक मनुष्य को बराबर का बनाया है। उसी सिद्धान्त के गणित को एक व्यक्ति एक मत भी कहते हैं। लेकिन लोकतन्त्र का मतलब बहुमत जो चाहे वो कर ले ये नहीं निकलता। लोकतन्त्र व्यक्ति से सम्बन्धित है। आप कह रहे हैं कि प्रत्येक मनुष्य के कुछ आधारभुत अधिकार होते हैं। उन अधिकारों को बहुमत तो क्या पुर्ण मत से भी नहीं छिन सकते हैं।

ये रियल इस्टेट की बात नहीं है। लोकतन्त्र का जमीन से सम्बन्ध होता तो दुनिया की सबसे बड़ी लोकतन्त्र भारतको नहीं माना जाता। छोटा सा देश भारत। भारत से लगभग तीन गुना बड़ा सहारा मरुभूमि है। सहारा को ही भारत से बड़ा लोकतन्त्र या देश कहते लोग। नहीं कहते हैं।

काश्मीर का मसला जमीन का नहीं है। काश्मीर का मसला वहाँ के अवाम से है।

एक होती है जमीनी यथार्थ। एक होती है क्लेम। यथार्थ है लाइन ऑफ़ कण्ट्रोल। क्लेम है कि पाकिस्तान और भारत दोनों पुरे के पुरे काश्मीर को क्लेम करते हैं। जब तक दोनों वो क्लेम करते रहेंगे टेंशन बना रहेगा। टेंशन बना रहेगा तो दोनों देशो में गरीबी बनी रहेगी। जितने गरीब लोग भारतके भितर हैं उतने दुनिका के किसी देश में नहीं।

गृह मंत्री कह रहे हैं ३७० हटा दिया। अब पाकिस्तान के अधीन जो काश्मीर है वो भी लेंगे। अक्साइ चीन भी लेंगे। कैसे लेंगे? ३७० तो हटाया बल प्रयोग कर के। बाँकी काश्मीर और अक्साइ चीन लेने के लिए पाकिस्तान और चीन से युद्ध करेंगे क्या? वो भी जानते हैं कि युद्ध असंभव है। बाँकी काश्मीर और अक्साइ चीन भारतका हो जाना असंभव बात नहीं है। लेकिन वहाँ तक पहुँचने का रास्ता युद्ध नहीं है। तीनो देश बातचीत करें। शायद रास्ता निकल जाए। आप ५० या १०० सालका टाईमटेबल निकालिए। शायद रास्ता निकल जाए।

नहीं अगर निकट भविष्य में ही हल निकालना चाहते हैं तो लोगों को इस तरह गुमराह मत किजिए।

जो लोकतन्त्र बिहार या महाराष्ट्र में है वही लोकतंत्र काश्मीर को भी दे सकते हैं तो कुछ हद तक माना जा सकता है कि चलो अकेले जितना कर सके किए। नहीं तो ये तो तानाशाही बात हो गयी। ये फ़ासिस्ट कदम हो गया।

वार्ता में होता है पॉस्चरिंग। थोड़ा बढ़चढ़ के बोलना होता है। बाद में वार्ता के दौरान थोड़ा पिछे हट जाते हैं और डील करते हैं।

ये जो कदम है ये स्थायी समाधान नहीं है। अस्थायी समाधान भी है कि नहीं ये कुछ समय बितने पर पता चलेगा। स्थायी समाधान है वार्ता। वार्ता किजिए। पाकिस्तान से। चीन से। फोर्मुला तो यही है कि तीनों देश लाइन ऑफ़ कन्ट्रोल को स्थायी सीमा मान लें और व्यापार पर फोकस करें। ताकि गरीबी को हटाया जा सके।


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Friday, June 28, 2019

The Trump Base

The 2016 election saw a large swathe of working-class whites gravitate to Donald Trump. These people used to be reliable Democrats. And it is hard to argue the only source of support has been racism. There are serious economic anxieties.

The 2016 mandate was that the US was tired of playing the world's policeman. For one, it is too expensive. The US spends something like 700 billion dollars every year on defense. For a fraction of that amount, it could solve the housing crisis, the education crisis, and the health crisis. It could make a serious dent in its infrastructure woes.

Trump questioned NATO. And people were aghast. But he was only responding to his mandate. Perhaps NATO is indeed a Cold War relic. Whether that is the case or not, a lot of Americans seem to think it is too expensive.

Globalization worked. Trade has worked. A lower-middle-class American today can go to her local Walmart and purchase stuff that Queen Victoria of England could only have dreamed of at the height of British power. There have been immense rises in productivity.

I wholeheartedly supported the idea of Trump holding summit level talks with the North Korean leader. I support the same between Trump and the Supreme Leader of Iran. Why not? Trying to reason things out in person is the basic democratic impulse. It is the most human thing to do.

Or, hey, how about video conferencing?

It is important to take Trump out of the picture and see that something happened in 2016. The US as a country is trying to readjust. The US feels like its defense treaty with Germany and Japan are no longer sustainable. They cost too much money. And perhaps they do. New arrangements have to be sought.

Maybe we are looking at a scenario where Japan gets an army again.

Peace on the peninsula would help. North Korea wants a peace treaty. That peace treaty would guarantee that the US will not invade North Korea. That North Korea wants such an assurance speaks to the paranoia of the regime. But that peace treaty is a small price to pay for peace. Normalized relations between the two Koreas would have cascading influences. We will very likely see a Germany repeat. And Japan will have many fewer security concerns.

The 2016 mandate has to be seen as a call for a new world order where the US plays a less central, a less expensive role. Some of the things Trump wants on trade can only be achieved if the dollar is no longer the global currency. Perhaps it is time for something like Libra, a currency resting on the Bitcoin technology that is pegged to a basket of the five major currencies of the world.

Trump spotted the well of anger in 2016. I don't think he has the solutions. The solutions he offers are misguided at best.

Take intellectual property law as an example. It makes no sense for the US Congress to pass intellectual property law and then impose that on the rest of the world. The US Congress is not the Congress for the whole world. A global parliament needs to shape something like that.

There are a lot of people who are happy someone is finally standing up to China. There are a lot of people who are very happy someone is finally standing up to the US. Both powers should take note.


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Tuesday, May 21, 2019

The US And The Chinese Economies Are Super Well-Connected

The US and the Chinese economies are super well-connected. It costs less to send a package from Shanghai to Los Angeles, than it does to send it from Los Angeles to any other destination in the US, no matter how close. China is not some distant country.

Not only are the US and Chinese economies super well-connected, but the two are also super well-connected to the rest of the world. If the two escalate this trade war, the global economy itself suffers. Every country will be impacted to various degrees.

The US and the Chinese economies are not only super well-connected at the level of consumption. That is there. But that is only the surface of it. China exports raw material to the US that the Chinese manufacturers use to produce and export to China which some Chinese producers use to build even more complex goods which they then export to the US, among other places.

That is why when the trade war started, the Trump administration started jacking up the tariffs, first on some imports, then on more, then larger tariffs on even more imports. That gradual increase might have been as much in consideration of the trade talks as to test the resilience of the US economy itself. China, of course, retaliated in kind. But so far it has been theatrics. Soon the trade war is about to hit the average consumer in the US in the form of higher prices. People who by and large did not much gain from the Trump tax cuts are about to start paying more at their local stores. This is going to be widespread. The trade war is no longer some remote thing impacting farmers in Iowa.

But then there is Huawei. The US intends to hurt Chinese companies like Huawei. Ends up Huawei imports things like computer chips from some American companies. But then also ends up China is the source of something like 90% of the supply of rare earth metals that are do or die for the high tech industries. The US might block the chips. China might block those rare earth metals. You are looking at constipation scenarios in the global supply chains.

But then China has been the hub of low tech industries. It produces goods that go to the Walmarts of the world where the working class, the lower middle class, the middle class go shopping. Ends up those working class, the lower middle class, the middle class are by now emergent classes in most parts of the world.

The US is not about to get back its lost manufacturing base. But it is already seeing the industries of tomorrow all over the horizon. It is automation, not China. China is also losing manufacturing jobs to automation.   

Yes, free speech is an issue. Yes, mass surveillance is an issue. Yes, freedom of religion is an issue. But white supremacy is also an issue. At some level, the trade war is white supremacist thinking taken from the Mexican border to the ports of China.

The FBI is on public record having asked Facebook and Apple for information on individuals. One thing Wikileaks revealed is the US spied on the German Chancellor. I don't doubt the US and Chinese intelligence agencies do their best to snoop in.

Cybersecurity is a major issue. But it is for the tech companies of the world to come together and set standards. It is for the governments of the world to make the policy moves.

5G is going to be a game changer. Too bad the two leading economies cannot get their act together.



Trade War Endgame Scenarios
US China Trade War: A Meeting Of The Hot And Cold Fronts
New Twist In The Trade War: China Devalues Its Currency

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Friday, May 10, 2019

China US Trade War Escalation



How Goes the Trade War? by Paul Krugman Donald Trump ... provided us with many iconic quotations .... extremely clear examples of bad ideas........ foreigners paid none of the bill, U.S. companies and consumers paid all of it. And the losses to U.S. consumers exceeded the revenue from the new tariffs, so the tariffs made America poorer overall...... These price hikes led to substantial changes in behavior. Imports of the tariffed items fell sharply, partly because consumers turned to domestic products, but also in large part because importers shifted their sourcing to countries that aren’t currently facing Trump tariffs. For example, a number of companies already seem to have begun buying goods they previously bought from China from Vietnam or Mexico instead........... Consider the following example: pre-tariff, the U.S. imports some good from China that costs $100. Then the Trump administration imposes a 25% tariff, raising the price to consumers to $125. If we just keep importing that good from China, consumers lose $25 per unit purchased – but the government raises an extra $25 in taxes, leaving overall national income unchanged.......... Suppose, however, that importers shift to a more expensive source that isn’t subject to the tariff; suppose, for example, that they can buy the good from Vietnam for $115. Then consumers only lose $15 – but there is no tariff revenue, so that $15 is a loss for the nation as a whole........... But what if they turn to a domestic supplier – say, a U.S. company that will sell the product for $120. How does this change the story? ......... Here the crucial thing is that producing a good domestically has an opportunity cost. The U.S. is near full employment, so the $120 in resources used to produce that good could and would have been employed producing something else in the absence of the tariff. Diverting them into producing what we used to import means a net loss of $20, with no revenue offset. ....... in practice any manufacturing jobs added by the Trump tariffs are probably offset by losses of other manufacturing jobs. ........ most of the tariffs are on intermediate goods – inputs into production, so that job gains in, say, steel are offset by losses in autos and other downstream sectors. Beyond that, the tariffs have probably contributed to a rising dollar, which makes U.S. exports less competitive.
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Thursday, May 24, 2018

Botched



When North Korea had already held talks with the Chinese president and had talked of peninsular denuclearization and a possible Korean unification with a major gesture of time zone synchronization, those were positive signs. Pulling out of the Iran nuclear deal was not good timing, to say the least. The US sounded like it wanted a deal with North Korea that it had with Iran. If that is your tune to sing, you don't walk out of the Iran nuclear deal. That was a clear signal to North Korea even if they agreed to a deal that the US wanted, the US had no intention of honoring it. Trump also managed to talk about Libya and Gaddafi in the meantime. That was like saying to Kim, sign the deal that we will not honor, and, by the way, we want you killed out in the streets.

The first order of business was a path to denuclearization. Then massive engagement leading to a Korean unification. The North Korean regime as is would not have stayed in its current shape. West Germany did not become East Germany. And there has not been a one state two systems in Germany.

In the mean time the US has managed to lose all of its allies in Europe on the Iran nuclear deal. And that was not the first strike. The Paris Climate Accord, and trade were already major issues. Japan kept the Trans Pacific Partnership, that Trump would now like to join, he says. To that the TPP nations have said, welcome, but there is nothing to negotiate anymore. Join as is.

And India thought America, Europe, India, Japan and Australia are a thing. That was before Trump declared his intentions for a trade war with China, a recipe for a global Great Depression. India's Modi has had to spend two full days in informal talks with the Chinese president in response, and another full day with the Russian president.

Just like the climate accord and the Iran deal can go on with or without the US, the two Koreas should take steps towards unification.

Trump’s Relationship With North Korea Just Got More Dangerous: Some Republicans have praised Trump for his North Korea diplomacy, and there’s been talk about him winning a Nobel Peace Prize. That was always ludicrous, and his North Korea policy is in fact a fine example of ineptitude. .......... Trump’s jingoistic rhetoric didn’t particularly intimidate North Korea, but it terrified South Korea, which feared it would be collateral damage in a new Korean War. So President Moon shrewdly used the Olympics to undertake a careful peace mission to bring the U.S. and North Korea together, flattering each side to make this happen (Moon is a world-class Trump flatterer, and other leaders around the world have noted his success). This was commendable on Moon’s part; he’s the one who genuinely did have a shot at the peace prize. ........ Yet John Bolton, Trump’s national security adviser, spoke up in ways calculated to unnerve the North Koreans, by talking about the Libya model. When you cite as a model a country whose leader then ended up being executed by his own people, that’s not usually persuasive to another dictator. ....... North Korean leaders themselves responded to Bolton’s comments with harsh, over-the-top rhetoric, including the comment about Pence. This was a major miscalculation on their part, escalating the ineptitude and helping to kill the summit. ......... While the North Koreans didn’t get the summit they wanted with Trump, they have managed the process quite well. They used the rush of diplomacy to rebuild ties with Beijing and start discussions about economic integration with South Korea, and to moderate their international image. They’ve also created something of a wedge between Washington and Seoul, as was apparent in the response to Trump’s cancellation by a South Korean government spokesman: “We are attempting to make sense of what, precisely, President Trump means.”

Trump’s foolish conviction on North Korea: In the end what we had was the Art of the Schlemiel. It’s a Yiddish word — a New Yorkism — which President Trump may know. It means a foolish person, in this case a president who accepts the North Korean leader’s invitation to a summit meeting with no preparation but a touching belief in his own negotiating brilliance. That summit is now off. ......... The president announced he would be a no-show at next month’s planned meeting after North Korea showed “tremendous anger and open hostility displayed in your most recent statement.” Trump was referring to recent comments by North Korean officials. The latest called Vice President Pence “ignorant and stupid.” Pence is neither, but it was not smart of him to advance Libya as the model for North Korea’s nuclear disarmament. Not only did Libya essentially capitulate to Western demands, but its leader, Moammar Gaddafi, lost both his regime and his life. ......... Trump’s narcissism and his lack of empathy are a hindrance in foreign affairs. He has to put himself in the shoes of his adversaries and that he cannot do. ......... he was wrong in the first place to plunge into a summit that had not been meticulously planned. Characteristically, his ego got the best of him and he trusted his instincts which he feels are never wrong. It is the conviction of a schlemiel.

North Korea nuclear test tunnels 'destroyed'

South Korean president says Trump cancelling Kim Jong Un summit is 'very regretful and disconcerting'



Twitter Critics Mercilessly Mock Trump For Canceling Summit With Kim
Donald Trump cancels Kim Jong-un summit, citing North Korea’s ‘tremendous anger’ and boasts of US’s ‘massive’ nukes
'Very Perplexed': International Confusion, Concern After Trump Cancels Summit: "Denuclearization of the Korean Peninsula and the establishment of permanent peace are historic tasks that can neither be abandoned nor delayed," Yonhap quotes Moon as saying.......... Moon, who spoke to Kim Jong Un in a historic meeting in April, was in Washington earlier this week to meet with Trump and discuss strategy for the summit......... And other world leaders expressed confusion or alarm about Trump's decision. ........... British Prime Minister Theresa May said the U.K. is "disappointed" that the talks have been called off ........ On Tuesday, Trump warned that there was a "very substantial chance [the meeting] won't work out." North Korea had been signaling that it might call off the summit itself, objecting to military exercises in South Korea and comments from American politicians.



North Korea launches tirade against ‘stupid’ US officials: North Korea has launched a tirade against the “ignorant and stupid remarks” of US officials and threatened to walk away from a landmark summit with US President Donald Trump next month..........“Whether the US will meet us at a meeting room or encounter us at nuclear-to-nuclear showdown is entirely dependent upon the decision and behaviour of the United States,” said Choe Son Hui, a North Korean vice-foreign minister, on Thursday. ........ The comments followed continued references by US officials, in particular vice-president Mike Pence, to the “Libya model” for denuclearisation, which is increasingly being used by the White House as a euphemism for the overthrow and murder of North Korean leader Kim Jong Un. ....... Libyan leader Muammer Gaddafi was toppled and murdered in 2011 by western-backed rebels — a fate that North Korean officials believe he could have avoided had he not abandoned his nuclear weapons programme years earlier. ....... the potentially historic meeting has been thrown into jeopardy in recent days amid a bitter backlash from Pyongyang over what it calls Washington’s “unilateral” demands. ....... At the crux of the issue lies a chasm in perception over what prompted the summit in the first place. .......... Mr Trump believes his “maximum pressure” strategy coerced Mr Kim to the negotiating table and the US can dictate terms as a result. ......... For its part, North Korea said it agreed to the meeting out of its own volition and should be treated as an equal nuclear power in negotiations. ........ Initially hailed as “gracious gesture” by Mr Trump, the dismantlement of the site has been criticised by experts, who say evidence about the extent of the regime’s nuclear programme will be lost in the process. 

North Korea says it has officially dismantled its nuclear test site

When Trump meets Kim, a whole lot could go wrong: Washington and Pyongyang are presenting different interpretations of what denuclearization means to the world (more on that later), and they clearly have conflicting expectations about how the mechanics would work...... Pyongyang is thought to have a number of deadly agents in its hands, including anthrax, cholera and the plague....... Kim and Trump's red lines may be unbridgeable. Although the North Korean dictator has been talking about peace treaties and a nuclear-free Korean peninsula, there is a strong likelihood that he never intended to follow through. As last week's "no unilateral denuclearization" announcement indicated, it defies common sense for the Kim regime to give up its nuclear weapons after decades of research, development and testing. North Korea has endured harsh sanctions, political isolation and financial deprivation; why would it destroy its functioning nuclear deterrent at the urging of the U.S. now? ...... The summit may be called off.

North Korea: U.S.' actions will determine if there is a summit or a "nuclear-to-nuclear showdown"

China’s backroom talks with North Korea thrust into spotlight: Trump blames Beijing for summit setbacks, but experts say Pyongyang is not a vassal state........ Analysts say Kim Jong Un could be playing the big powers off each other to North Korea’s advantage ...... China has always preferred to do diplomacy in quiet back rooms, far away from the public glare. ....... But against the backdrop of a similarly epoch-making diplomatic opening between the US and North Korea, Beijing’s behind-the-scenes role has been thrust into the limelight by US President Donald Trump.......... It is a position where China is profoundly uncomfortable. “One side is whispering, and the other is saying everything through a bullhorn,” joked one foreign diplomat. ........... China insists it backs peace talks between the US and North Korea, although it wants bilateral talks replaced by multilateral talks as soon as possible, giving Beijing a seat at the table.......... North Korea’s overture to the US of a freeze on nuclear testing earlier this year was not accompanied by a corresponding freeze on military exercises in the South. ........ China has always championed the idea of a “dual freeze” — of nuclear tests by the North and military manoeuvres by the South. ....... Kim Il Sung, Mr Kim’s grandfather, grew adept at playing the Soviet Union against China in the 1950s and 1960s, and now his grandson may be using the same tactics with China and the US.

The hypothetical reunification of Korea: ...... the transfers from West Germany to East Germany in 1989, calculating a cost at around €1.7trn in today's euros, around 62 per cent of West Germany's current GDP, or roughly 8 per cent of the European Union's nominal GDP ......... The Korean populations are closer in size, with around 26m North Korean citizens compared to South Korea's 51m, a near 2-to-1 ratio versus West and East Germany's split of around 4-to-1. So all else being equal, the lack of a need for serious population flows from south to north should at least partly aid unification. ........ Much of the industrial base in Germany that supported the war efforts during the 1940s were located in the former East Germany. Mercedes, BMW, VW, ThyssenKrupp, and Bosch, which are household names today, but all of them had major factories before May 1945 in support of Germany’s military operations. The industrial ‘culture’ has never disappeared in EG, even if it had faded somewhat under communist rule. ........ the severe lack of industrial infrastructure north of the Korean border will ultimately require heavier investment than Eastern Germany. For perspective on just how far behind North Korea's infamously isolated economy is, UBS estimates GDP per capita in North Korea to be only $648. In comparison, the equivalent figure south of the peninsula comes in at $27,396. ........ Scaling its per-capita figure up to nationwide GDP, North Korea's economy totals $16.3bn, about 12 per cent of Jeff Bezos's net worth. If North Korea's economy was to match it's southern counterpart, this figure would have to grow by a factor of 43, or $684bn. ....... the US, China, Japan, and South Korea split the costs evenly: USD500 billion each over a decade. ......... This would be 2.4%, 3.5%, 9.7%, and 29.5% of today’s GDP of the US, China, Japan, and SK, and only 1.7%, 1.6%, 7.3%, and 18.3% of the GDP of the four nations over the coming decade. This price tag seems affordable for the four countries mentioned above. ........... Around $2trn over ten years then. Whether the four named countries will deem it “affordable” is another question, particularly as the Trump administration seems reticent to fiscally support Puerto Rico after Hurricane Maria last year. ...... the extreme malnutrition in North Korea. A UNICEF estimate from January estimates around 200,000 children in North Korea suffer from the affliction. Malnutrition, of course, carries health effects beyond childhood, such as a reduction in motor skills and learning ability. ........ Malnutrition’s economic costs are substantial: productivity losses to individuals are estimated at more than 10 percent of lifetime earnings, and gross domestic product (GDP) lost to malnutrition runs as high as 2 to 3 percent ....... less risk of nuclear apocalypse is bullish for global growth.

Britain disappointed after Trump cancels North Korea summit: UK PM May
Canceling of Trump-Kim Meeting Upends Asia but Could Help China: “Trump walking away from the summit lets North Korea meet all its objectives: public recognition, lighter sanctions, damage to U.S. alliances and continued nuclear advancement” ........ Prime Minister Shinzo Abe of Japan, on the other hand, may be breathing a sigh of relief. Officials in Tokyo were worried that the talks were moving too quickly, without enough Japanese involvement, and could result in a deal that would benefit the United States but leave Japan vulnerable to North Korea’s arsenal. ........ Mr. Trump also called Mr. Xi a “world-class poker player,” a backhanded compliment for a world leader whom Mr. Trump has called a friend and a partner in enforcing international sanctions on the North over its nuclear weapons program. ...... The confusion and finger-pointing show how complex the situation is, with numerous actors negotiating in multiple channels with myriad and sometimes overlapping agendas. ....... Chinese analysts say China has much to gain from a peace deal that would prevent a potentially disastrous conflict with the United States on its border, and that in the long run might result in the removal of American troops from South Korea. ....... “Blaming the Chinese for the change in tone from North Korea strikes me as trying to find a Chinese scapegoat for a summit failure"

My holiday in North Korea – what I learned in the world's most secretive state: On our 10-night tour, our three English speaking guides, the enforcer, the cheerleader and the persuader, show us a good time while keeping us on message. They take the lead in the open mic sessions on the bus that becomes our daytime home. They sing Korean folk songs with gusto but take even more pleasure in telling jokes against Americans and Japanese, the latter loathed on both sides of the DMZ for their brutal colonisation (1910-1945) and the “comfort women” they conscripted to pleasure the Imperial Army. ......... citizens have no foreign television, no internet and no right to travel outside their provinces. The fields, seen through the windows of the bus, are ploughed by oxen and harvested by hand. On occasion, uniformed soldiers are spotted digging ditches. Housing allocation ensures that children stay with their parents until they get married. Workers have 15 days holiday a year plus Sundays. What do they do? Go to the cinema or have a picnic in the park.

Inside the luxury world of Kim Jong-un: satellite images revealed that construction had been completed on a series of five private aircraft runways next to a few of the leader’s palaces. ...... "These runways are located near Kim family compounds - sometimes within the security perimeters - and next to private train stations that were used by Kim Jong Il” ...... The palace area is said to also house the leader’s private yachts, jet-skis and villas used for entertaining guests, while another extravagant palace a short drive from the new runway was said to be a summer haunt of Kenji Fujimoto, the Japanese chef who claimed to have spent summers with the leader’s father. ....... The former NBA (National Basketball Association) star described the life of Mr Kim, who he referred to as a “good friend” at the time, as a “seven-star” party of endless cocktails and jet-skis following a week spent on the leader’s private island........"It's [the island] like going to Hawaii or Ibiza, but he's the only one that lives there," Mr Rodman said. ........... "He's got 50 to 60 [people] around him all the time - just normal people, drinking cocktails and laughing the whole time..... "If you drink a bottle of tequila, it's the best tequila," he added. "Everything you want, he has the best." ......Mr Kim’s 200 foot-yacht was a "cross between a ferry and a Disney boat," according to Mr Rodman. ....... Princess Yachts, the manufacturer of the yacht, is owned by LVMH, the French luxury goods group which includes the luxury fashion brand Louis Vuitton. The 98MY model of the yacht, which was an updated version of the 95MY, was estimated to cost more than £5.6 million at the time. ........ Perhaps inspired by the boarding school days of his formative teenage years spent in Switzerland, Mr Kim also ordered a “world class” luxury ski resort to be built, which opened last year. The estimated £21 million ski resort, which features 70 miles of multi-level ski runs, a hotel, a heliport and cable cars, was visited by Mr Kim in late 2013 who spent New Year’s Eve there and described “with great satisfaction" that everything was "impeccable". ........ While some of the country's nearly 24 million people might be lacking food, shelter and other basic necessities, the North Korean leader's regime was found to have had an increase in imports of musical instruments, cosmetics, handbags, leather products, watches and cars made in Japan and China ........ Other purchases that were revealed included bottles of high-end alcohol costing the state $30 million (£20 million), electronic goods costing $37 million and luxury watches costing a further $8.2 million.



Libyan remarks may have sunk Donald Trump’s North Korea summit: both sides have resorted to chest-beating about their respective nuclear arsenals. ....... increasingly clear that the US and North Korea understand different things by the term “denuclearisation”. For the Trump administration, that must simply mean that North Korea scraps its nuclear weapons and dismantles its nuclear programme. For the North Koreans, however, “denuclearisation” was always framed as being part of a general disarmament process on the Korean peninsula, which would probably also involve the departure of US troops from South Korea ..... In the soap opera of “the Donald” and “little rocket man”, almost any plot-twist remains possible.

Trump Can Win by Walking Away From Korea Talks: What’s more, the U.S. can promise Kim not to invade his country. The U.S. can entice Kim with cash and trade. The U.S. can perform all kinds of diplomatic acrobatics and pretend this tyrant is a statesman. But no one can guarantee that one day the North Korean people will not rise up against him. The Soviet Union had a nuclear arsenal that could destroy the world dozens of times over, but even that regime eventually met its end after Boris Yeltsin decided holding the empire together wasn’t worth the repression required. ..... Back when Bolton was undersecretary of state in George W. Bush’s first term, he used to keep framed copies of Iranian and North Korean propaganda sheets that denounced him. ..... Bolton knows the nuclear file and rogue states better than almost anyone else in the foreign policy establishment. If anyone will know a tough nuclear agreement, it’s the man who has spent the last three years trying to get America out of the weak one Barack Obama cut with Iran....... Ronald Reagan was also eager for a diplomatic victory, in his summit with Mikhail Gorbachev. The two leaders came close to an agreement that would end the arms race that had bankrupted the Soviets. But at the last minute, Gorbachev asked Reagan to end testing missile defense systems. The Bolton of that scenario – administration hard-liner Richard Perle – told Reagan that this demand would kill the Pentagon's program. ....... Reagan went against popular opinion and walked out of the summit. Within three years the Soviet Union collapsed......Forget “the art of the deal”; sometimes you win by walking away. Reagan never received a Nobel Peace Prize for reaching a grand bargain with Gorbachev. He had to settle for winning the Cold War.

White House: North Korea's response to Pence was 'last straw'
Trump calls off North Korea summit with Kim

'Political Dummy' and 'Libya Model': The Mike Pence - North Korea Exchange That Killed the Summit: When asked to clarify if he was threatening Kim as the 'Libya model' ended with regime change and death for Moammar Gadhafi, Pence added this is not a 'threat' so much as a 'fact' ......... She added: “To borrow their words, we can also make the U.S. taste an appalling tragedy it has neither experienced nor even imagined up to now.”

South Korea's President Moon Says Talks With Kim Will Resume When U.S. Air Drills End: Pyongyang pulled out of high-level talks with Seoul on May 16, blunting the optimism that followed Moon and Kim’s historic April 27 meeting, in which the latter pledged “a new era of peace” on the peninsula. Calling the joint drills a “provocative military ruckus” North Korea also said it would “reconsider” Kim’s planned June 12 summit with the U.S. if America tried to “force” its “unilateral nuclear abandonment.” ........ Pyongyang has long regarded U.S.–South Korea joint military exercises a rehearsal for invasion and particularly objects to the inclusion of bombers. The U.S. dropped more ordinance on North Korea in the 1950’s than it did in the entire Pacific theater during World War II. ...... While Pinkston has described North Korean nuclear disarmament as analogous to “the Pope abandoning Jesus” he says that Moon, an accomplished diplomat, would be hoping that social interaction and engagement will persuade Kim leader he is not under threat. ...... Trump meanwhile, “is applying the kind of tools and instruments and tactics in a local real estate market in NYC,” says Pinkston. But “with an international system there are no courts, there’s no third-party enforcer. It’s way over his head and it’s dangerous.”

North Korea Demolishes Its Nuclear Test Site In A 'Huge Explosion'



Trump cancels summit with North Korea's Kim, warns that military ready: and warned that the U.S. military was ready in the event of any reckless acts by North Korea. ....... what would have been the first-ever meeting between a serving U.S. president and a North Korean leader in Singapore on June 12. ..... The cancellation came just hours after North Korea followed through on a pledge to blow up tunnels at its main nuclear test site, which Pyongyang said was proof of its commitment to end nuclear testing....... North Korea’s announcement of its plan to destroy its only nuclear test site had been widely welcomed as a positive, if largely symbolic, step. Kim has declared his nuclear force complete, amid speculation the site was obsolete anyway...... South Korean President Moon Jae-in, who worked hard to help set up the summit and urged Trump at a White House meeting on Tuesday not to let a rare opportunity slip away, said he was “perplexed” by the cancellation. He urged Trump and Kim to talk directly......... The reference to Pence that offended the White House came in a statement released by North Korean media citing Vice Foreign Minister Choe Son Hui. She called Pence a “political dummy” for comparing North Korea - a “nuclear weapons state” - to Libya, where Muammar Gaddafi gave up his unfinished nuclear development program, only to be killed later by NATO-backed fighters. ....... “You talk about your nuclear capabilities, but ours are so massive and powerful that I pray to God that they will never have to be used” ..... Rhetoric reached new heights under Trump as he mocked Kim as “little rocket man” and threatened to “totally destroy” North Korea if necessary. Kim called Trump mentally deranged. ....... It comes at a time when Trump’s withdrawal from the Iran nuclear deal has drawn criticism and his moving of the U.S. Embassy to Jerusalem has fueled violence. An investigation into alleged Russian meddling in the 2016 election hangs over his presidency.

Why did anyone ever take Trump’s North Korea diplomacy seriously?: Trump lies and says nonsense all the time. ....... He never delivered his much-promised plan to release a “terrific” Obamacare alternative that would cover everyone. Instead, he backtracked on his promise to protect Medicaid from cuts. He never took on the National Rifle Association. He never delivered a solution for DREAMers, and, of course, Mexico isn’t going to pay for the wall...... He’s dropped the promise to negotiate lower prescription drug prices for Medicare. He dropped the promise to break up big banks. He dropped the promise of a $1 trillion infrastructure bill. He dropped the promise to develop a tax program that would leave the rich paying more. And, of course, his version of “draining the swamp“ has brought a level of corruption to official Washington that would have embarrassed the congressional barons of the Gilded Age....... it has been conducted so far like you would expect a bullshitter to conduct policy. ...... “for at least two decades, leaders in North Korea have been seeking a personal meeting with an American president,” and across all that time, American presidents have been saying no. ...... “Kim Jong Il wanted to meet with President Clinton.” ...... rather than defend the president’s dovish new direction, Republicans — including the White House itself — spun the meeting as a concession by the North Koreans. ....... When a notorious liar does something dramatic and new and immediately tries (poorly) to cover up what it is that he’s doing, a sensible reaction would have been to become alarmed and suspicious — not to suddenly become credulous and naive. ....... Much of the US national security establishment, however, decided to simply block out everything they have learned from everything Trump has ever done in his career in business and politics. ...... It’s good that Trump gave up the ghost here rather than trying to fake his way through a summit. But it’s critical that the country’s political and media establishment try to actually learn its lesson here. Trump lies about a lot of things. He talks nonsense constantly. And while those of us who don’t work in the White House can’t stop him from doing those things, we can certainly cover him as a habitual liar and bullshitter rather than waking up each morning like we’ve never seen Trump in action before.

Trump canceled the Kim Jong Un summit — but you can still buy the official summit coin



Kim Jong Un holds second meeting with Xi Jinping in China: North Korean leader Kim Jong Un has paid a second visit to China in two months, meeting with President Xi Jinping ahead of highly anticipated talks between Kim and US President Donald Trump...... Kim said he was willing to denuclearize "as long as relevant parties eliminate the hostile policy and security threats" against Pyongyang...... In an unprecedented meeting at the demilitarized zone separating the two countries, Kim became the first North Korean leader to step into South Korean territory since 1953...... During the summit, Kim and Moon committed themselves to the complete denuclearization of the Korean Peninsula and pledged to bring a formal end to the Korean War, 65 years after hostilities ceased...... In the past, North Korean leaders have been reluctant to travel by air on international journeys, especially Kim's father, Kim Jong Il, who famously went everywhere in his personal armored train....... The Chinese President is reportedly planning a trip to the North Korean capital Pyongyang



South Korean president says Trump cancelling Kim Jong Un summit is 'very regretful and disconcerting': "It is very regretful and disconcerting that the US-NK summit will not happen as planned," Moon's office said. "Denuclearization and the lasting peace on the Korean peninsula cannot be abandoned or delayed as they are the historical assignment.........."South Korea's Blue House added: "The sincerity of the affected parties who have been working to resolve the problem has not changed. It is hard to resolve sensitive and difficult diplomatic issues with the current way of communications. [We] hope that the leaders resolve problems through direct and close dialogue." ...... The meeting, which was scheduled for June 12 in Singapore, would have been the first-ever face-to-face meeting between a U.S. president and a North Korean leader...... North Korea had recently canceled planned talks with South Korea, saying the annual military drills between its southern neighbor and the U.S. represented a threat.

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