By Paul Davis and Chiman Zebari
Today the world is holding its breath to see the response of the United State to an anemic attack by Iran on Iraqi bases housing Americans. The Islamic Republic launched around 15 missiles at targets in Iraq, some of which were shot down most of which missed the target. The attack was in response to the killing by the US of an Iranian terrorist and commander of an Iranian terrorist group.
Some say the Iranians missed their targets on purpose in order to avoid a major retaliation by the US. The Iranian FARS news network at one point said up to 80 Americans had been killed. The US is saying no casualties. While there may have been no US casualties there were Iraqis injured. So, what is next.
This is also being called a face-saving device so that the Iranian leadership, playing to a domestic audience, can show that they took decisive action to retaliate for the US actions. The operation was called the “Martyr Soleimani.”
The fact is that the death of Soleimani was a major blow to the Iranian ability to continue to export the Islamic revolution. The technical capabilities of Iran have increased in the last few years but the war fighting capabilities are far short of what they need to engage in any protracted war. This however will not fully deter the actions of Iran since there war model has been to use proxy forces to carry out limited attacks on selected targets.
The belief that this is a one-off operation does not track. The anger in the Islamic Republics leadership is very strong and revenge in their history. The President in his statement announced additional sanctions on Iran and justified the strike that took out Soleimani. The foreign minister of Iran told the world that this missile strike was proportional and served it purpose. This is difficult to believe since Iran has been attacking anyone or any country it sees as an enemy for 40 years. What may be considered is that Iran may not launch attacks by its forces from Iranian soil again. The standard Iranian tactic is to use proxy forces which gives them deniability.
The President also said that it appears that Iran is standing down, not sure what that means, in fact the next day there was an attack on the Green Zone in Baghdad. I expect to see a lull, which means back to normal, and then a spike in attacks in Syria and Lebanon as well as a potential Hamas or Hizballah attack on Israel. The Iranian dominated Iraqi militias will continue to act independently of the Iraqi government and under the control of Iran.
It should also be pointed out that the missile attacks were aimed at bases in Sunni and Kurdish areas. This tracks from past IRGC controlled attacks by the PMF militias. Soleimani’s main objective has been to spread the Islamic revolution, increase Iranian hegemony and remove the US (west) from the region. This last is important to understand, Iran sees little to no difference between the US and other western nations yet will continue to manipulate those western nations for trade.
Short of all out war with Iran the US needs to adjust it position in the region in order to continue a US presence as well as be prepared to defend US interests and allies. Based on the resolution of the Iraqi Parliament to seek to have all US forces leave one solution would be to move the US embassy from Baghdad to Erbil and ask the Kurds to hold another referendum on independence, and this time back them up fully. Kurds as we have mentioned previously are the only true allies the Americans have in the region. A truly free and independent Kurdistan would be a game changer. Removing US forces from Iraq would be a financial blow to Iraq and a political blow to Iran and Turkey.
With Soleimani out of the way Iran does not have a replacement of his caliper. Much of the control and personal contacts may begin to weaken and allow for the different actors to operate on their own. Beside the Kurds, the Sunni in Iraq have been victims of the Iranian control of Iraq. It is within their power to vote for autonomy and break away from Baghdad. What has stopped this in the past was not Iran but the US which maintains a one Iraq doctrine.
While so many are saying this is going to lead to World War III I would reiterate that the Iranian are in no condition to wage an actual war. As for terrorist attacks Iran and the IRGC are the leading exporter and planners of terrorism already. The Iranian government is facing a dilemma with a shift in the way the American government is reacting, holding Tehran accountable for the actions of its proxies, and the widespread protest in Iran and Iraq. This is in fact the perfect time to apply maximum pressure. The only thing that is working in Iran’s favor is the US House pushing a new War Powers Act exclusively to stop any action by the US in the event it is needed.
We need to build a strong coalition that will truly isolate Iran and end the regimes reign of terror. It is time for the majority of the government to understand that to do nothing now will result in a greater loss of national security then what they can understand in their current state.
I have watched the impeachment hearings and seen President Trumps tweets and am embarrassed for my country. We have lost sight of the core values of America, those values that have made us the envy of the world. Chief among those values was and should be a sense of fair play. Everyone should have the right to speak their mind and if accused of wrongdoing be able to defend themselves. The president is wrong when he comes out and attacks his critics and accusers. If you do not like the president, then you have the right to say so. There was a time when this was done without invective, but no longer. Today we attack any and all personal habits and traits. The president makes up names and insults the integrity of his opponents. The democrats attack the president with insults and name calling. The worst part of all of this is the current impeachment hearings, begun with little to no evidence of an impeachable crime. They have concluded without the presentation of any hard evidence, only rumor and hearsay. The next step was the House Judiciary Committee review of the results of the hearings and writing articles of impeachment. The house will then get the articles and will almost certainly vote to impeach. Unlike past impeachments such as Richard Nixon or Bill Clinton, there is no hard evidence to support the commission of a crime that is impeachable.
Most of what we have seen, and likely will see, is hearsay and opinion. The Ukrainians themselves have said there was no demand and they felt no pressure. We are not currently talking facts or evidence but opinion and spin. We followed this up with the House Judiciary committee, chaired by Congressman Jerry Nadler of NY, a man who has been an adversary of Donald Trump for years. The committee heard from four so called experts on the constitution and impeachment. Of the four, three were acknowledged opponents of the President and the fourth was a token republican because the chair would not allow any other republican picks.
One of the things that bothers me is that there is not even a pretense at any form of judicial fairness. The Intelligence Committee first meet in secret then had a couple of open hearings. According to those with access at the beginning and then on live TV the Democrats ran the hearing as a Star Chamber, controlling the questions and the witness’ while going for a predetermined conclusion. Then onto the Judiciary Committee which began by bringing on four law professors three of whom have been on record as avid Trump haters. One of the witness’, Pamela Karlan, a law professor from Stanford was quoted from a video last year as saying “ “I came in from the airport yesterday and I got off the bus from Dulles [Airport] down at L’Enfant Plaza and I walked up to the hotel, I was walking past what used to be the Old Post Office Building and is now the Trump Hotel, I had to cross the street of course.” Noah Feldman of Harvard once spoke of the high standard of proof needed in Sharia law. In 2008 wrote in the New York Times, “Today, when we invoke the harsh punishments prescribed by Shariah for a handful of offenses, we rarely acknowledge the high standards of proof necessary for their implementation. Before an adultery conviction can typically be obtained, for example, the accused must confess four times, or four adult male witnesses of good character must testify that they directly observed the sex act.” This of course is what is written but rarely is this standard kept. Feldman and three of the four are hardy keeping to a high standard of evidence since none has been forthcoming. Michael Gerhardt of UNC has written a number of books on the presidency and impeachment said the founding fathers would impeach Trump. Only Jonathan Turley of George Washington University pointed out that the evidence so far does not hold to the high standard of Impeachment.
All of this goes to the main problem, there is no way to shift through the noise to determine the facts. The only fact we actually know is that a phone call happened between President Trump and President Zelensky of Ukraine in which, amongst a number of topics Trump used the phrase “.. do me a favor.” This was followed by request to see what was known about the DNC server and a group known as crowd source. Later on Hunter Biden was mentioned as well as a request by VP Biden to fire a prosecutor. This last is also considered a fact since Biden himself admitted it.
After all of this we are left with the question, what was the intent of the president? Some who listened to the phone call did not hear anything that they construed as wrong. Others said it was an improper request. None have said it was a violation of law. The house is moving forward with the impeachment proceedings. Speaker Pelosi told Nadler to move forward with articles of impeachment, even though the hearings were only in their second day.
After a very raucous session the Judiciary Committee passed two articles of impeachment, abuse of power and contempt of congress. It will now go to the full house and pass at which point it will go to the Senate for trial. In support of the articles the committee issued a 169-page assessment of the case. In the 169-page report the committee brought up the constitution 259 times. Never citing evidence but saying the evidence was irrefutable in showing the President violated his constitutional oath. They pounded on the fact that the president obstructed the congressional probe by refusing to allow his staff to appear under order of subpoena by the House. While it is not clear how many subpoenas are active the ones that were issued are being reviewed in the courts. While the house has insisted that the president is not above the law, agreed, neither is the House. Stating that the House has the sole authority to impeach and that they are co-equal to the president, then so is the judiciary. Let the courts decide the limit of Presidential power to resist the House. Yet while the courts decide many of the democrats are saying it is not up to the courts that the house has the sole power to decide, therefore ignoring the co-equal branch of the Judiciary.
The case of abuse of power hinges on an interpretation of the July 25th phone call. The democrats say it showed an attempt to interfere with the 2020 elections by a foreign power. The republicans say it was a request to investigate a potential crime by Hunter Biden and perhaps his father, then the VP. The true motive can neither be proved or disproved. This brings us to another legal term, reasonable doubt. If a charge cannot be proved beyond a reasonable doubt, there must be an acquittal. In the 169-page assessment the Judiciary Committee contends the president committed multiple federal crimes including criminal bribery and wire fraud. Why then not include these charges in the articles of impeachment. Likely because they are criminal charges that need to be proved. Abuse of power is a catchall phrase that lacks specificity or the stringent standards of a criminal charge.
The President has not helped his cause with a constant stream of tweets that for the most part attack the opposition with child like invective. Calling people names and insulting them in other ways does not bode well in Washington or the rest of the country. The concept of inocencent until proven guilty should be the way to go. Put out the facts and let the other side try and prove guilt. The release of the transcripts and the denial of the Ukrainian government vs. the opinions and hear say of the witnesses against him should stand on there own. The president did send Speaker Pelosi a 6 page letter detailing the political nature of the House actions and laying out the defense that was denied him.
The question to resolve is whether or not the President broke the law in a way that justifies his removal from office. The democrats have said that he does not need to actually break the law to be removed that his actions alone demonstrate that he is unsuited for office. They have called him dangerous to the constitution and the country. They have called “witnesses” that have witnessed nothing and have been shown to be prejudicial to the president. During hearings in the house the presidents’ side was not allowed to make a concerted defense and when they questioned the witnesses they were, in many cases, gaveled to silence.
None of the actions mentioned prove the President innocent, but that is not what drives American justice. You do not have to prove your innocence, the other side needs to prove guilt, which they have not done. The actions of the House are not about constitutional power or a need to save the country but about a political campaign begun November 9th, 2016. The people need to understand the reality of what is going on and understand the danger the country faces if we reduce the process of impeachment to a political activity.
This entire process is driven by politics, not a concern of law or constitutional fidelity. I am concerned that it may work, not that Trump will be removed but that he will be damaged enough to loss in 2020. We will need to see how the Senate handles the trial and what kind of coverage it gets.
So now we have an open and pubic vote on beginning an official impeachment investigation. All republicans voted against, no surprise, but two democrats also voted against, a little surprise. It will be interesting to see how the various committees handle themselves when the hearings are open. Will they call back witnesses who had testified behind closed doors or not? Will they truly allow the republicans to call witnesses or will they throw up roadblocks? How will they handle cross examinations? It is interesting to also note that unlike the Nixon and Clinton impeachment investigations different committees will hold hearings instead of just the judiciary committee.
There is no doubt the house will impeach since all the democratic members of the committees as well as most of the house have already declared Trump guilty. I am sorry, regardless of guilt or innocence of the president there is no way to take these investigations seriously. This has devolved into what the president has called a witch hunt. The hope here is that open and fair hearings can right this ship and show the president broke the law beyond a shadow of a doubt or that there is not enough actual evidence to move forward giving the dems plausible reason to end this.
We can only wait and see.
President Donald Trump is not a great communicator, nor is he a racist, Nazi or wannabe dictator. The tragedies of the last week call on us all to come together as a country and face up to the problems that have led us to the point we find ourselves. When the president of the United States calls for unity and a rejection of hate and bigotry the opposition, regardless of politics, should get behind him. The incessant chatter from the news media and Trump opposition, calling him a racist repeatedly for anything he says or does, does not make it true. When used for political gain I understand, to a point, but when a national tragedy strikes it is time, even for a moment to come together as one people.
Something has happened and continues to happen to our country and society that goes beyond the normal. Is the prevalence of guns to blame on mass shootings or is it mental illness, video games or whatever? The answer is a little bit of all. But a broad look at the country and its past must show that we have had guns and mental illness and racism etc. since the beginning. What has changed? Is the prevalence of violent video games making our youth insensitive to mass killing?
It has been 20 years since Columbine, what have we learned? Apparently, nothing, as we have a hard time learning. Violence against immigrants is also nothing new. In Louisville Kentucky 22 people were killed in religious and race induced rioting, 164 years ago. On Bloody Monday Protestant mobs rioted and attacked German and Irish Catholic neighborhoods causing a migration of citizens out of the city. The Protestant Democrats were bitter rivals of the Know-Nothing Party with a large German and Irish support base.
Did Trumps tweets in the last two and a half years suddenly increase race hatred in the country, of course not. The constant misquotes and opinions passing as news stories have not help but are also not totally to blame for the increase in violence and mass shootings.
We have a societal problem that returns every now and again, but this time we have social media platforms and mass media bias fanning the flames. Increased gun control laws are not the answer since a very tiny fraction of legally owned guns are used in the reported gun violence in the country. Will increased background checks or “red-flag” laws help, maybe. But until we look to the underlying cause we will continue to suffer the consequences. Pointing fingers and backing feel-good laws that will accomplish nothing will not replace taking a long hard HONEST look at the problem.
Time for the politicians to once again learn the difference between what they perceive as reality and how the rest of us see it. Two examples are the hearings before the House Oversight Committee with Michael Cohen and the end of the Trump-Kim summit.
I will not waste a lot of time on the Cohen hearings since it was just a political circus not meant to archive anything other then to push forward an agenda. Nothing new was learned from a full day of statements and political attacks from both side. What we were told is what we knew: Donald Trump spent his life as a real estate developer and had for years attempted to build a hotel in Moscow. It never happened and other then Trump associates saying they tried to get it done is a nothing. Donald Trumps attorney facilitated payments to two blackmailers in order for their stories, true or false, not to tarnish the image of Trump. Since according to Cohen, Trumps personnel money was used this is again a nothing. The rest of the time was spent on rumors and innuendo as well as personnel attacks by the members on Cohen and each other. Paying hush money is not a crime and if it was to enhance the election possibility then it might be a crime except for the fact that it was Trumps personnel money of which there is no limit on use in his own campaign. The only facts that are evident in the hearing are that Cohen is going to jail for perjury and tax evasion. What was gained by this stunt is negligible, those that like Trump, still like him. Those that hate Trump, still hate him, and most everyone else was not tuned in and was not fooled by this Congressional circus.
The other story, one that was buried by the news and through manipulating the timing of the Cohen hearing, was the Trump-Kim summit. It is only front page today because of its perceived failure. This is the story that points out the greater difference and lack of understanding between politicians and the real world. While hoping to achieve the next stage of denuclearization on the Korean peninsula the negotiations ended early because the North Korean leader wanted more then the US was willing to give. The fact that the US then ended the negotiations and left must have come as a shock for Kim who, like the rest of the world, was trained to understand that the West would give into anything just to get a deal. Welcome to true negotiations Mr. Kim. I could make that welcome to most of the politicians and diplomats who have lived in a bubble for years.
Negotiations between people, companies or nations required certain elements. Among these are a give and take with known parameters, a set understanding of the end state and realistic expectations. In this case the North Koreans came with unrealistic expectations of complete sanctions relief while giving only limited movement toward the goal of denuclearization.
The world however has seen in recent years that the US, when negotiating, will accept almost any end state just to have an agreement. The most notable of these is the Joint Comprehensive Plain Of Action, or the Iran Deal. The Iran Deal saw the west give Iran everything it wanted and receiving nothing but empty promises in return. This was apparently the Norths expectation, leaving when it became obvious that there would be no true negotiated end, the US left.
The main stream media immediately called this a diplomatic failure showing Trumps lack of negotiating skill or knowledge of international relationships. Those of us who have been in business, or just life, understand this as reality. When you realize that the negotiation is going no where or that the demands of the person on the other side of the table are more then you are willing to give, you end the negotiation. This is standard when any two people or companies sit down to talk, this is however a sea change in government and diplomatic circles.
This is all part of what Donald Trump has brought to Washington, part of the drain the swamp movement. I fear however, like so many other reform movements, this will run into the wall that is Washington. Conservatives and progressives alike are very resistant to true change. If this change is going to be effective almost all who are a part must be removed, which is highly unlikely.
The hypocrisy of the west knows no bounds. The murder of Saudi journalist Jamal Khashoggi is a prime example. There is no doubt that the government of Saudi Arabia murdered Khashoggi at their embassy in Turkey, we all accept that as fact. That the world should be outraged is not in question, but that Turkey led the original call for justice is the height of hypocrisy. An opinion piece in Newsweek in September called Erdogan’s Turkey the worlds biggest prison for journalist. While true numbers are hard to come by the estimate is that between one-third and one-half of all journalist imprisoned in the world are sitting in Turkish jail cells.
The murder of Khashoggi was a despicable act, of that there is no question, the reaction however could be said to be excessive when put in the light of other events around the region. The moral outrage from the press and the call for the United States to punish Saudi Arabia is valid, but it has dominated the headlines and has been politicized. The facts are that Khashoggi was a Saudi citizen who engaged in actions that opposed the Saudi government and especially the Royal family, which is a crime in Saudi Arabia. He was technically executed on Saudi territory, inside the embassy, under orders from someone in the Saudi government. While this violates international norms and laws it does not violate Saudi custom of an absolute monarchy. Let’s look at the region.
Staying with Saudi Arabia, criminals can be executed by beheading for crimes that range from murder to adultery and vary from blasphemy to homosexuality. There were 146 executions in Saudi Arabia in 2017 and according to human rights organizations the number rose by over 70% in the first quarter of 2018. The kingdom also imposes other punishments such as stoning and lashes for crimes, all of which violate international norms. The world knows of these barbaric practices and yet continues to ignore them, likely for the sake of oil.
Turkey, once a shining light of democracy in the region, has devolved into a dictatorship where the rule of law is up to the capriciousness of politicians and judges. Based on political beliefs or ethnicity, Turks as well as foreigners are tried and sentenced to long prison terms with no transparency or right to defense. This system has been used to silence and imprison not only journalist but political opponents as well as shut down opposition news papers and news outlets. Foreigners traveling to or transiting through Turkey are subjected to searches of there computers and other electronic devices for anything that may be anti-Turkish and subject to arrest and prosecution if materials are found. While widely publicized in the United States the arrest and detention of US Pastor Andrew Brunson on trumped up charges are just an indicator of how Turkey subverts its laws. Less well know is the case of German journalist Mesale Tolu who was held in detention for months on terrorism charges but was allowed to leave the country in order to leverage the German government. There has been no call from the world or US politicians to punish Turkey.
Iran is without a doubt the worst abuser of human rights in the region if not the world. There is no covering up the crimes, in fact they seem proud of how they treat their citizens. Their interpretation of Islam and sharia law allows them to do so under the guise of religion. There is no free press or even freedom of expression. Recently a young woman in protest stood up and took off her head covering, she has been sentenced to 19 years in jail. Not long ago a 16-year-old was stoned to death for crimes against chastity because she was raped. The war against the Kurds is ongoing, declared terrorist or apostate Kurds are hung every day in Iran, woman are stoned to death and the jails are filled to over capacity by Iranians and foreigners. The jails are filled through the use of closed courts and unknown charges, while the world objects to these actions they are more then willing to allow them to continue in order to do business. There is no outcry for protection of the innocent. While the Trump administration has withdrawn from the Iran deal and reinstated sanctions the rest of the world objects to these actions and continues to deal with Iran.
Iraq has abandoned all pretense of a true legal system and has subverted or ignored its constitution. The highest court in Iraq was to be appointed by the government with apportioned seats so that all of Iraq was included. This has never been done and the court that rules is left over from the Saddam regime. Recent activities have included the illegal attack on Kirkuk and other disputed territories following a legal referendum in the Kurdish region that the central government disapproved. This was preceded by more then a decade of ignoring article 140 of the constitution calling for resolution of the problem. Illegal use of private militias such as the PMF and the suppression of individuals and groups is the norm, and yet the world ignores this in hopes that Iraq can be held together and some how become a functioning democracy.
There are many countries that violate human rights or operate outside of international norms and are ignored by the world, but this must be addressed. The world is getting smaller and cultures are clashing harder. This is not to say there should be a culture war, but moral outrage cannot be a light that is turned on and off for the convenience of governments. Saudi Arabia should be held accountable for the extrajudicial execution of Jamal Khashoggi, it should also be held to account for its barbaric justice system. Turkey and the others as well should be made to address their systems. The UN’s Universal Declaration of Human Rights should be a key not just a document. It was once said that human history would be much less bloody if we were as upset over the death of millions as we can become over the death of one individual.
So now the process of government is to be slowed by a single unsubstantiated allegation about something that happened almost four decades ago during a drunken High School party. Unless there are additional accusations or some evidence of this being indicative of a continuing pattern of abuse then it must end, and the process allowed to continue.
Having been vetted by the FBI since 1993 with no derogatory findings the allegation cannot be proven, and the man’s character should not be called into question, but will be. If inappropriate behavior doing high school is a bar to government service, then the halls of congress would be empty. This is not to say the accusation is true but given context to life it is of little relevance to the process unless it were part of a pattern. While this is one letter from someone being reported as a left leaning social justice warrior it is counter balanced by a letter signed by 65 woman who knew him when, who say this is not indicative of the person they knew. All we have for evidence is the accuser’s letter supposedly backed up by a therapist note from a session 30 years after the fact and denials from the accused and a friend of his that was implicated.
Should these allegations be investigated, yes, but how? Considering the amount of time that has gone by and lack of any concreate evidence what can be done at this late date. Senator Dianne Feinstein has had the accusatory letter in hand since July, long before the hearings began. Claiming to honor the writers request for anonymity Feinstein did not disclose the letter to anyone other then some staff until after the committee had finished its questioning and was moving toward a vote. I am sure the committee could have designed questions about the incident without revealing names. But the minority decided to wait until the week of the confirmation vote to spring this surprise.
This maneuver is without a doubt designed to confuse and delay the vote as well as an attempt to sway those in the majority and give them reason to not vote for confirmation. Even if this event did happen, and I seriously doubt that it did, it is not as some are saying an automatic disqualifier. If there were a history of drunken sexual assaults over years then yes it would be, but on this there is no evidence.
The court begins its next session in about two weeks, congress must do everything in its is power to ensure for the people that there are nine qualified justices on the bench. All I ask is that everyone PLEASETHINK if there is truly enough here to delay the vote or that disqualifies Brett Kavanaugh from becoming a justice.
When I read “Art of the Deal” years ago I was impressed by the pragmatism but did see some parts that to me as a young man starting out in business did not make sense. I have continued to read Trumps books, “Art of the Comeback” etc., and they now make sense. I also remember a scene in the movie “Patton” in which, after defeating Rommel, Patton yells out “ I read your book.” Today we don’t read books but get our information from TV or the web, at least that’s how it appears listening to politicians and pundits. If you see Trump as an enemy I suggest you follow Sun Tzu and “Know your enemy as you know yourself,” read his books and study his back ground.
The most recent political blowback on Trump has been his pulling out of negotiations with North Korea, with the talking heads and opposition politicians trumpeting how Kim has played us and that it was never going to work etc. Many of those who are saying these things went to the Kennedy School of Government at Harvard or got there degree in political science from Georgetown and so forth. Had they gone to Harvard Business School or Wharton they may understand how Trump will handle negotiations. It would also have helped if any of them had bothered to read his books.
What we are seeing, playing out in the open is the give and take of true negotiations. These types of negotiations used to go on in government and between governments after the lights went out, at cocktail parties and behind closed doors. Today there are no negotiations just posturing for the cameras and picking positions based on ideology and the latest poll. Little thought is given today on the impact of decisions for the future if that future goes beyond the next news cycle. Business cannot run that way and neither should government. A politicians legacy should not be decided on just getting a deal but getting the right deal.
The other difference here is that Trump is use to moving fast while government moves glacially, if at all. There will be a summit with North Korea, just don’t know when. The stage has been set and Trump maneuvered China to our side which has blocked North Korea. This is a beginning and will play out. It will take time and more back and forth, but it will end. Its time for those who report the news and work in government to catch up with the new paradigm or get out of the way. The cost of failure is to great and should not be the subject of a sound bit.
While everyone is concentrating on the recent interview of an overaged porn star trying to extend her 15 minutes of fame, while writing a cheap crime story, the president has again improved the US position in the world. With the announcement that President Trump was going to impose a tariff on steel and aluminum, the economic experts went nuts. Tariffs are counterproductive, tariffs will cost more jobs then they save, this will start an all-out trade war with the rest of the world, etcetera. The problem is that we have been taught over the years to only see the close in results on a narrow timeline. We have lost the ability to see a larger picture over an extended period. In other words, we have lost the ability to think and reason out situations.
Much of this has been the result of politicians learning to respond to news cycles in the past and to the present day 24/7 news coverage. Politicians on both sides of the aisle have learned to be circumspect in any statement and not take a firm position. The exceptions are those who demand ideological purity. Then along comes Donald J. Trump, a complete amateur in the field who speaks his mind and is willing to change position as needed to accomplish a needed end. Add to this the fact that he accomplished the impossible by defeating the anointed one for the presidency causing the news media to declare all out war. We need now return the American people to the point where they can think and reason.
Trump is a negotiator and as anyone who has negotiated knows, the first thing to do is set up the conditions of the negotiation. In the case of the tariffs it appears that the initial conditions were just that, setting the stage. Since the declaration of the tariffs the President has exempted counties such as Canada and Mexico and has begun trade negotiation with several others. One such negotiation was with South Korea which has now agreed to reduce the amount of steel exported and to double the number of US manufactured cars to be sold in the country. While South Korea is the third largest exporter of steel to the US we have also begun to negotiate with China which has now come to the table.
We must also look to the claims of the tariffs on US production and employment, which the talking heads scream will be negatively impacted. To begin most steel used in the US is domestically produced. Of what is imported 26% comes from Canada and Mexico which we have said is already exempted from the tariffs. South Korea accounts for an additional 10% of imports. To find the rest we see Brazil contributes 14%, which now brings us to 50% of all imports. The rest of the worlds top ten contributes another 27% and the balance of the world adds 23%. All this imported steel represents around 25% of all steel used in the US. Domestic with US mills are running at about 75% capacity. This means US mills can cover the loss of imported steel. The problem is not in the amount of steel however it’s the cost. All of this is not to confuse the issue but to point out that this issue, unlike what many are claiming, is complicated and needs thought, not emotion to reason out.
Because of several factors US manufactured steel is more expensive then imported steel, tariffs are designed to compensate for the difference. Which leaves two potentials, products that use steel will increase in price or the price of those products must come down. There is also the probability of US steel manufactures finding ways to reduce the cost of steel, which likely would cost jobs as efficiencies increase. The Trump administration has cut several cumbersome regulations and passed a tax bill that gives both corporations and most Americans additional income therefore we can look to market equilibrium containing pricing.
What have we learned, first that we should not react to actions without thinking about them in the long term. Second many negotiations begin without the intent that they will meet all the initial demands. Which brings us to the conclusion that nothing is black and white. That all things are negotiable if both side understand the rules and that obviously both sides don’t always understand the rules. There will be an impact on US markets, but it will not be the end of the world.