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MAY 1, 2018
Meyerson on TAP
Angela Merkel has come and gone, her visit to the White House late last week a veritable blip between the rapturous welcome given Emmanuel Macron and the uneasy chortles accorded Michelle Wolf. President Trump seems somewhat confounded by the challenge that Merkel’s Germany presents: an ally, but also a nag insisting that the U.S. adhere to the Iran agreement (as did Macron’s France, but Macron talks Trump’s language, as they share a common ideology: narcissism). A nation with which we run a trade deficit, but we can’t ask them to revalue their currency, since they use the euro. A major manufacturer of high-end steel, though little of it ends up here, and even if it did, it doesn’t undercut the U.S. steel industry, as its workers’ pay ranges from comparable to higher than ours’, and the same is true for the price of its steel.
So Trump has postponed unveiling his list of nations against whose steel he’ll impose tariffs. The grand Trumpian gesture would be to include everybody, but by firing that blunderbuss, he’d penalize both the trade-law miscreants and the trade-law compliers (not that distinctions such as these have deterred Trump up to now). The United Steelworkers have made clear that the point of the tariffs shouldn’t be to penalize producers like Canada, which don’t undercut U.S. steelmakers, but those nations that provide state subsidies to their producers so they can underprice us.
If Trump (for that matter, if the American economic establishment) wished to ferret out the real culprits behind our massive trade deficit, they’d look first and foremost to Wall Street. It was the rising power of American finance and its shareholder-über-alles ideology that propelled our manufacturing sector to move offshore in search of cheaper labor and higher profits. There are many reasons why Germany has retained its manufacturing sector while we have not, but chief among them is the fact that Germany has no equivalent of Wall Street or London’s “the City.” But for Deutsche Bank, Germany lacks a global investment titan, and its far stronger community-banking sector is committed, by virtue of its control by local stakeholders rather than distant shareholders, to bolstering domestic manufacturing. Germany has problems of its own, but a financial sector committed to undermining the nation’s economy isn’t one of them. It’s only one of ours. ~ HAROLD MEYERSON

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