Friday, January 6, 2017

Legal, dangerous, sincere ? 6 questions about the protectionism of Trump – Obs

Carrier, SoftBank, Sprint, Ford, General Motors. And now Toyota… one at A time, Donald Trump points a finger at them, threatens them, or thank them through his megaphone of Twitter. The result ? Companies that are retreating or will make it on to the offshoring of jobs, a american public, intrigued and a political class attempted, including in France, where Marine Le Pen welcomes the firmness of the president-elect.

can This work ? Trump would have found the martingale winning economic formula which will stop the bleeding of industrial jobs ? Impossible to ignore the debate by shouting the blow of the com’ démago of a president a populist. The United States itself, it is not only the voters of Trump who applaud it : most of the elected officials of Michigan, all factions, have welcomed the decision of Ford to abandon a new plant in Mexico and, on Tuesday, the nine congressmen democrats have given a joint press conference with the president of the trade union central AFL-CIO, to indicate to Trump their support for a renegotiation of the Nafta (free trade Agreement north american).

A water drop

placed end to end, making “anti-relocation” announced by the companies, since the election, will create 55.000 jobs in the United States and not in others. This is a drop of water, on the scale of a country like this, a grain of sand statistic if one considers that, every three months, 6.7 million private-sector jobs are destroyed and 7.2 million created in the first global economy. But the signal is strong, it goes well beyond the figures announced. The decision of the most spectacular is that of Ford to cancel an investment of $ 1.6 billion in a mexican plant that was to produce the Ford Focus, and invest $ 700 million in a Michigan plant where final assembly will take electric cars and driverless.

The turnaround of Ford, whose CEO announced in December that he would not change his plans, is less forced than it seems : with the decline in the price of gasoline, the market for small engined cars has collapsed in the United States and Ford will continue to produce in Mexico. As to the factory cancelled, it was only in the preliminary stage.

Trump actually bend Ford, who surrenders to relocate to Mexico

To General Motors and Toyota, also threatened by Trump, it will be more complicated : GM, in particular, has planned to lay off more than 3,000 workers in Michigan and Ohio, just before you start in Mexico in the production of two models of 4×4. Bad timing ! It is hard to see a multinational such as GM, whose relations with the government are incestuous, directly challenging a President Trump. Mary Barra, the CEO, is also part of a “strategic forum” of business leaders who advise the new president.

announcements, relayed and amplified by Trump on Twitter, are worth gold politically : each time, a multinational bows and obeys a president is patriotic. But a series of tweets can become a system ? It raises, at the very least, many questions.

real capitulations ?

In announcing its decision, the CEO of Ford has recalled that his company would benefit largely from reduced taxes and regulations reduced under an administration Trump. The Big Three of Detroit are among other on a relaxation of the goals of petrol consumption, taxed by the Obama administration. They are therefore willing to make some sacrifices well-publicized in the media.

Is this a good method ?

For a large number of Republicans, the idea of seeing an administration that is choosing business champions and punish cancres is anathema to absolute, a door open to corruption and nepotism. Sarah Palin, the ex-colistière of John McCain in 2008, rejects :

“When the government interferes arbitrarily with individual subsidies, promoting a business rather than the other, this creates a precedent inconsistent, unfair, and illogical.”

once is not custom, a lot, to the right, to share his opinion.

This results in-t-he adverse effects ?

Carrier, a subsidiary of United Technologies manufacturer of boilers and appliances, air-conditioning, has agreed to save nearly 800 jobs in Indiana, but only after having received the promise of aid from the State of $ 7 million. Multinational corporations, already virtuosos in the art of playing a State or a city against one or another to get a maximum grant, may retain the record Carrier the idea that, really, the blackmail paid…

Is this legal ?

“Make the United States or to pay a big customs duty at the border !” This tweet threatening to Trump, at the address of General Motors, as a one for Toyota, glides over the fact that such a punishment is not legal. Except except well specific, a president cannot penalize imports or exports of a company said, only one category of products. Impossible, therefore, to impose a customs duty of 35% for small displacements of Toyota cars produced in Mexico, without affecting those constructed by others.

Is this dangerous ?

Trump has all the same a “remarkable leeway if he opts for protectionism,” said Paul Krugman, a Nobel prize winner in Economics and columnist at the “New York Times”. Among other things, “it can restrict imports if it “may endanger the national security.” A scenario openly protectionist – with the risk of escalation with China and other countries – is therefore possible, in a scenario that is of concern to many politicians, experts and business leaders americans. “I don’t want a trade war,” says Kevin McCarthy, the leader of the republican majority in the House, while Fred Smith, CEO of Federal Express, a prognostic of the “economic impact of massive” in the case of a withdrawal of the Nafta (that Trump wants to renegotiate), recalling that “nearly 14 million jobs americans depend on trade with Canada and Mexico”. Krugman, for his part, predicts an avalan che of measures of “retaliation” and an “emulation” abroad – “big time”.

Is this sincere ?

At the beginning of his presidency, Ronald Reagan had imposed a quota on imports of japanese cars. It has subsequently been the advocate of free trade. Trump, who has made his career in a real estate sector largely sheltered from imports, will probably never be a free-swinger zealous. But his cabinet indicates a policy much more mixed than its tweets. Robert Lighthizer, its representative in the foreign Trade is a lawyer who defends a long-standing sectors or companies affected by free trade, such as steel. But Trump has also appointed many free-swingers in key positions, men such as Gary Cohn (ex-number 2 of Goldman Sachs) or Rex Tillerson (ex-CEO of ExxonMobil).

It will have to wait, beyond the glitz and glitter of the ad-hoc, if the world should or should not “fasten seatbelts” sign, to take the word of Krugman.

Philippe Boulet-Gercourt


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