Crazy Stupid Trade
Panelists talk Trump, trade and German politics
What did it mean for Germany when Angela Merkel’s sister party, the Christian Social Union, got clobbered in last month’s Bavarian parliamentary election? Are trade wars good for Americans? And how can the first chapter of an economics textbook help Trump understand global trade?
On Thursday, the answers to these questions and many more were debated in a panel discussion billed “Trump, Trade and Transatlantic Relations.” The director for the Center for German and European Studies, Prof. Sabine von Mering (GRALL), introduced the panelists: Brandeis professors Robert Art (POL) and Peter Petri (IBS), along with Art’s son, David Art, who teaches political science at Tufts. The event was hosted by the Center for German and European studies.
Seated before an audience of roughly 50 people, Robert Art kicked off the show with a few jokes to get the crowd warmed up. “This is the first time I’ve been on a panel with my son, but gosh it feels like my whole life has been a panel with him,” he said, grinning. This joke would resurface throughout the afternoon, garnering just as much laughter the fifth time as the first.
Clearing his throat, Robert Art continued on a more serious note, addressing Trump’s repeated claim that our NATO allies are “freeloaders” reaping the benefits of U.S. dollars toward military defense while coming up short on their half of the bargain. He said that while he vehemently disagrees with Trump that multilateral institutions such as the United Nations have harmed the U.S. in any way, “There is actually a legitimate case to be made about whether our allies are paying their fair share or not.” The former secretary of defense under Obama, Robert Gates, famously complained to NATO allies before he left office that the U.S. was carrying too much of the burden and that it was time other countries started paying up. “Trump is actually right here; our allies are not holding up their end of the deal, but that’s very different than saying the entire alliance is, to quote the president, ‘obsolete.’ The biggest problem is the sad state of the German army. The fact that such an economic powerhouse is spending about half of what they should be on defense is what we should focus on. Sorry, Sabine,” Art said, as hands from the audience flew up and attendees peppered him with questions about the NATO alliance.
Petri echoed Art’s point about the importance of NATO but also stressed the value of other types of partnerships for which Trump has shown disdain. He said, “Just this morning Australia passed the Trans Pacific Partnership — so as of next January there will actually be a TPP, but it will be without the United States.” Petri noted that the current administration’s strategy of flexing its muscles and starting trade wars wherever possible seemed to be steered by Trump’s own misunderstanding of how trade works.
“The United States has delivered a very confused message that somehow, because China runs a trade surplus with the U.S., they are winning and we are losing,” said Petri. He pointed out that every time somebody eats at a restaurant they run a trade deficit and the restaurant a surplus, but this doesn’t indicate who is “winning” or “losing.”
“One of my friends who, is also an economist, turned the first few pages of an economics textbook into an op-ed for the New York Times trying to explain this simple concept to Trump,” he chuckled. While he believes Trump’s feuds with European leaders won’t amount to much, Petri expressed concern about the administration’s antagonistic view of China. “They are on the front burner now,” he said, “and virtually everyone in government who argued for a more productive dialogue with China is gone, leaving only people like John Bolton to make the negotiations. He’s a deeply paranoid person, and now he’s in a position of authority.” At the same time, Petri warned that China has taken a more aggressive response to the U.S. trade, doubled their military presence in the South China Sea and done little to protect intellectual property. He believes that this is just as much a problem for Europe as it is for the U.S. and that the U.S. doesn’t have the leverage to push back on China by itself — it needs allies.
Hearing the word allies, David Art broke his silence. He steered the conversation away from trade and into politics, talking about the recent parliamentary elections in Bavaria, and how the anti-immigrant sentiments that helped carry Trump to victory in 2016 are taking hold in German politics. “For the first time since the Second World War, a radical right wing party will be represented in the federal parliament,” he said, referring to elections in Bavaria earlier this month in which the Alternative für Deutschland party won 12 percent of the vote. He explained how the AfD was founded by a group of economists who didn’t like Angela Merkel’s decision to bail out the Eurozone and wanted lower taxes. “Seeing a decline in the polls, the AfD capitalized on Merkel’s controversial decision to allow over 1 million Syria[n] refugees into Germany. That’s basically when it became the ferocious anti-immigrant party,” he said. Art believes that since then, every single election in Germany at the state level has been a referendum on Merkel’s refugee policy. However, he noted, “The AfD is still not going to be able to have much influence in parliament.” Art remains optimistic that Merkel’s fragile Berlin Coalition will hold and that the German people will resist the type of nativist tendencies Trump peddled on the campaign trail. Art concluded, “Bottom line, Merkel’s experiment of allowing those refugees in has worked out much better than many expected.”
A brief round of questions followed the presentations, and as attendees filed out of the room, a group of students could be heard debating the efficacy of Trump’s tariffs as they exited — for them, the conversation was far from over.