Foreign Affairs

America’s Dangerous Amnesia About World Order

Francis Gavin: “Americans regularly make three curious – and contestable – claims about peace, world order and their country’s role in achieving both. First, they often assume that they are a peace-loving people, and that our republic has been a force to promote amity and stability in the world. Second, they assume that peace is an unalloyed good, both a tool and product of progress, providing incontrovertible benefits; war and conflict, meanwhile, have brought nothing but misery and disaster. Third, they see peace and order as the natural state of the world, and view any actor or force that disturbs this harmony as both anomalous and deviant, to be identified, isolated and eliminated.”

“An honest portrayal of our own history, and that of world politics over the past few centuries, casts doubt on all three assumptions.”

Sorry America, Your Taxes Aren’t High

Ben Steverman: “The Organization for Economic Cooperation and Development analyzed how 35 countries tax wage-earners, making it possible to compare tax burdens across the world’s biggest economies. Each year, the OECD measures what it calls the “tax wedge,” the gap between what a worker gets paid and what they actually spend or save. Included are income taxes, payroll taxes, and any tax credits or rebates that supplement worker income. Excluded are the countless other ways that governments levy taxes, such as sales and value-added taxes, property taxes, and taxes on investment income and gains.”

“Guess who came out at the top of the list? No. Not the U.S. At the top are Belgium and France, while workers in Chile and New Zealand are taxed the least. America is in the bottom third.”

Trump Finds His Niche: Fixing Problems That No Longer Exist

Matt O’Brien: “President Trump has finally found an economic issue that’s not too complicated for him to do something about. That’s stopping China from manipulating its currency that it hasn’t been manipulating for the past two years.”

“It’s not that Chinese companies have stopped earning so many dollars. They haven’t. It’s that now they don’t want to turn those dollars into yuan, and would rather keep them offshore. China’s recent slowdown — that’s what 6.6 percent growth is for them — has scared people into moving as much money as they can out of the country in case things get worse. It’s a vicious circle where all this money leaving puts pressure on the yuan to weaken, which makes even more people rush to pull their money out before it loses any more value, and so on, and so on.”

“Beijing, for its part, has tried to put an end to this by manipulating its currency in reverse.”

“China isn’t manipulating its currency, and all Trump had to do was nothing. Success!”

How Is China Feeding Its Population of 1.4 Billion?

Center for Strategic & International Studies: “Decades of near double-digit GDP growth have enabled China’s leaders to make considerable strides in increasing food access across the country. Yet China’s economic boom has generated a new set of demographic demands and environmental strains that have affected its agricultural capacity. This feature explores China’s domestic production, the changing dietary demands of its public, and the role international trade plays in China’s food security.”

China Surpasses Canada as Top Buyer of U.S. Crude

Bloomberg Markets: “China became the biggest buyer of U.S. crude oil in February, surpassing Canada, at a time when OPEC is cutting back output.”

“The surge in U.S. shipments to Asia, a market long dominated by Saudi Arabia and other Middle East producers, comes as the Organization of Petroleum Exporting Countries trims output in an effort to end a glut that battered the economies of global energy exporters. Saudi Arabia reduced its pricing for some of its April crude sales to Asia as supplies from the U.S. became more competitive.”

Behind Trump’s Trade Deficit Obsession: Deficient Analysis

Peter Goodman: “In the world according to President Trump, trade deficits are among the clearest indication that Americans have become habitual chumps in the global marketplace. The United States sells fewer goods and services than it buys from the rest of the planet, and this is supposedly evidence that Americans are getting rolled.”

“But Mr. Trump’s portrayal of trade deficits entails crucial departures from economic reality.”

“Trade is not zero-sum. Expanded trade has historically tended to support economic growth, which generates more spoils to be divvied up for all.”

A World Unsafe for Democracy

Bret Stephens: “How did the world become unsafe for democracy?”

“The striking finding in the Freedom House report is that the global erosion of political liberty is largely taking place in the democracies. People are losing faith in freedoms that no longer seem to deliver on the promise of a safer, richer, fuller, fairer life.”

“If Americans can’t be persuaded of the merits and decency of our system, why should anyone else? If the winner of a U.S. presidential election is a man who embarrasses—or terrifies—much of the free world, how do we make the case to ordinary Russians or Chinese that the road of democracy isn’t simply the way of the buffoon?”

“Americans used to care deeply about the future of freedom in the world. Lose the care, risk the freedom.”

U.S. to Lose $1.6B as Mexican Vacationers Choose Canada

Forbes: “After decades of sitting pretty as a bucket list destination, the stars and stripes might be on their way out. Experts warn that anti-immigration rhetoric as well as confusing travel and electronic bans have dampened foreign interest in U.S. vacations, especially from Mexico.”

“At the same time, Canada has made it easier than ever to visit.”

“Mexico is America’s second-largest inbound tourism market, accounting for some 18.4 million visits in 2015. Just this year, experts predict 7% less visits from Mexico, totaling a $1.6 billion loss in direct economic spending by 2018, according to Tourism Economics, a research firm.”

A Smarter Way for Trump to Cut Foreign Aid

Jared Pincin and Brian Brenberg: “First, the president should eliminate all tied foreign aid — assistance that must be spent by the recipient country on goods and services supplied by the donor country. Such rigidity drastically increases the cost of foreign aid, by as much as 30 percent — especially when it comes to food.”

“Second, the president should support distributing foreign aid only to countries in true economic need. This would dramatically reduce the number of countries receiving economic aid, allowing USAID to focus its resources where they can do the most good. If the United States focused its foreign aid on countries classified by the World Bank as low-income economies, it would distribute aid in 31 countries, rather than the 158 countries we’re sending aid to today.”

“Lastly, Trump should insist on a Leahy-style amendment for foreign aid. The Leahy Amendment prohibits any military assistance to parties who are guilty of human-rights violations. The same standard should apply to foreign aid, which is designed to promote human development and humanitarian purposes. Adopting this type of restriction on who can receive aid encourages accountability, both in terms of who is eligible for aid and how USAID distributes the aid.”

This Program Has Fed 40 Million Kids in the World’s Poorest Places. Trump Wants to Get Rid of It.

Washington Post: “Former senator Bob Dole, a pillar of the Republican Party and a staunch supporter of President Trump during his campaign, has accused the president of threatening “one of the proudest achievements of my lifetime” — by cutting a program that has provided school meals to more than 40 million children in some of the world’s poorest countries.”

“The McGovern-Dole Food for Education Program, a bipartisan aid enterprise championed by Dole and his Democratic Senate colleague George McGovern in the early aughts, was a casualty of the White House budget proposal released last Thursday.”

“Relative to other foreign aid programs, McGovern-Dole is both small and narrowly tailored: The Department of Agriculture requested $182 million to fund it this year, with the bulk of that money going toward commodity purchases and grants.”

America May Miss Out on the Next Industrial Revolution

The Verge: “Robots are inevitably going to automate millions of jobs in the US and around the world, but there’s an even more complex scenario on the horizon, said roboticist Matt Rendall. In a talk Tuesday at SXSW, Rendall painted a picture of the future of robotic job displacement that focused less on automation and more on the realistic ways in which the robotics industry will reshape global manufacturing.”

“The takeaway was that America, which has outsourced much of its manufacturing and lacks serious investment in industrial robotics, may miss out on the world’s next radical shift in how goods are produced. That’s because the robot makers — as in, the robots that make the robots — could play a key role in determining how automation expands across the globe.”

“The difference, he added, is how China is responding to automation, which is by embracing it instead of shying away from it, as the US appears to be approaching the issue. This is in stark contrast to industrial advances of the previous century, like Ford’s assembly line, that arrived first in American industries and transformed the country’s economy into one of the most robost on the planet.”

The World Prepares to Move on Without U.S. on Trade

Adam Behsudi: “Here’s what happens when the U.S. pulls out of a major trade deal: New Zealand seizes the opportunity to send more of its milk and cheese to China. Japanese consumers pay less for Australian beef than for American meat. Canadians talk about sending everything from farm products to banking services to Japan and India.”

“President Donald Trump dumped the 12-nation TPP right after he took office, saying it was a ‘horrible’ deal and blaming it for sucking American jobs abroad. But now other countries are ready to rush into the vacuum the U.S. is leaving behind, negotiating tariff-cutting deals that could eliminate any competitive advantage for U.S. goods.”

Solar Power Growth Leaps by 50% Worldwide Thanks to US and China

The Guardian: “The amount of solar power added worldwide soared by some 50% last year because of a sun rush in the US and China, new figures show.”

“New solar photovoltaic capacity installed in 2016 reached more than 76 gigawatts, a dramatic increase on the 50GW installed the year before. China and the US led the surge, with both countries almost doubling the amount of solar they added in 2015, according to data compiled by Europe’s solar power trade body.”

“Solar is still a relative minnow in the electricity mix of most countries, the figures show. Even where the technology has been embraced most enthusiastically, such as in Europe, solar on average provides 4% of electricity demand.”

Fearing U.S. Withdrawal, Europe Considers Its Own Nuclear Deterrent

Max Fisher: “An idea, once unthinkable, is gaining attention in European policy circles: a European Union nuclear weapons program.”

“Under such a plan, France’s arsenal would be repurposed to protect the rest of Europe and would be put under a common European command, funding plan, defense doctrine, or some combination of the three. It would be enacted only if the Continent could no longer count on American protection.”

“In practical terms, the plan would change the flag on Europe’s nuclear deterrent from that of the United States to that of France. But this would risk making an American exit from Europe more permanent.”