Sunday, March 4, 2018
Tariffs Are Like Defense, It Is Time for Everyone to Bear Their Fair Share
THE REAL QUESTION TODAY IS WHAT IS NEXT? I suspect that the ProgDems will cut back on their Russia 'collusion charges that are going nowhere fast and jump on the 'trade war' bandwagon this week, leaving special counsel Mueller on his own with the growing pile of evidence that it was Democrats who 'colluded,' not Trump. • • • TRADE WARS? TheHill reported on Saturday that : "Foreign governments are threatening to launch stiff retaliatory measures against the United States if President Trump carries through on his threats to impose a 25% tariff on all steel and an 10% tariff on all aluminum imports to the United States." TheHill cites European Commission President Jean-Claude Juncker telling a German television station that Europe would retaliate against the sanctions with tariffs of its own : “We will put tariffs on Harley-Davidson, on bourbon and on blue jeans — Levi's." If, as some charge, Trump's tariffs will penalize American consumers, Juncker's proposed tariffs will knock Europe's Millennials for a Levi-less loop. • Experts believe Juncker's warning was a message to leading Republicans, who may still prevail upon Trump to change his mind or soften his approach. In that regard, Juncker seemed to pick the right products to target for higher tariffs. Senate Majority Leader Mitch McConnell is from Kentucky, where the bourbon industry exported $154 million to the European Union last year alone, according to figures cited by CNBC. Harley-Davidson’s headquarters are in Milwaukee, Wisconsin, House Speaker Paul Ryan’s home state. Levi-Strauss blue jeans are headquartered in the blue state of California, which is also home to House Majority Leader Kevin McCarthy. In previous trade standoffs, Junker had threatened tariffs on Wisconsin dairy and Florida orange juice. Canada, the largest source of US steel imports, noted that the steel trade was a two-way street. • Canadian Foreign Affairs Minister Chrystia Freeland says : “The United States has a $2-billion surplus in steel trade with Canada. Canada buys more American steel than any other country in the world, accounting for 50% of US exports." On a broader scale, last year, US exports of goods and services accounted for 12% of the entire US economy, so a broad-based reaction from US trade partners could hit the economy hard, says TheHill, citing agriculture as one major US export sector that could be targeted if the tariffs go ahead. Jeff Schott, a senior fellow at the Peterson Institute for International Economics told The Hill : “When you’re talking about sectoral actions, the vulnerable industries are the ones that are dependent on exports, and that’s a lot of agricultural products," noting that Canada, South Korea and Japan, all major steel exporters to the US, are also big importers of US agriculture, and adding, “If they’re looking for ways of inflicting pain on the United States, then agriculture is going to be a prime target." GOP politicians also know that agriculture is a major contributor to key red state economies, and they could use that fact to pressure President Trump to scale back the proposed tariffs. Economics expert Claude Barfield of the conservative American Enterprise Institute told TheHill : “What they’ll be looking for are products where they think there will be a political impact. If you look at agricultural products, they’re all around the Midwestern states, which are Republican states." In another sector, countries that want to send the US a strong message on trade could easily hit the aerospace industry by targeting Boeing, which employs nearly 150,000 Americans. Not only would Boeing suffer from higher steel prices, but foreign buyers hoping to hit the US could simply opt to buy aircraft from Boeing’s European competitor, Airbus. Barfield thinks that Trump’s decision to sidestep trade law by invoking national security could open up a longer-term threat to US trade : “Where the US is also in danger right now is that we are setting a terrible precedent on invoking national security for trade." US trade partners could follow America’s lead and claim all sorts of industries in their countries need protection for national security reasons. In 1975, for example, Sweden invoked national security when it imposed quotas on footwear, claiming that its army’s need for shoes made the industry critical. China, in particular, is adept at using national security arguments to shape their trade and manufacturing policy, said Barfield. "This is just a gift to the Chinese,” he told TheHill. • • • TRUMP IS GETTINGF A LOT OF ADVICE. The final decisions are due this week, so major modifications are not impossible. As he usually does, President Trump on Friday strongly defended his decision to impose tariffs on steel and aluminum, even as he acknowledged the move could trigger a global trade war. In early morning tweets, President Trump continued to defy members of his own party -- and some of his top advisors -- by tweeting that the tariffs would benefit the US economy. Trump tweeted : “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win.” Trump also suggested the tariffs were merely the trade war’s opening shot, tweeting that he wants “RECIPROCAL TAXES” on goods from countries that have high taxes on US exports. But, administration officials have not provided details about what a potential reciprocal tax might entail. The President returned to one of his central themes during the 2016 campaign; that foreign countries are taking advantage of the US on trade and need to be stopped. He tweeted : “Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!” Trump claims the US has a trade deficit of $800 billion, but analysts told TheHill that if trade in services is included, the trade deficit in 2017 was $566 billion, according to Commerce Department figures. • Many economists and Republican lawmakers disagree with the President, arguing that free trade helps drive down consumer prices while fueling the world’s largest economy with a needed influx of goods and services. But Trump has wanted to take action to stem seemingly unfair trade practices by foreign countries. The President stressed how the tariffs would help strengthen the US steel and aluminum industries in comparison to their foreign competitors, telling industry executives that “they used to be a lot bigger, but they're going to be a lot bigger again.” • However, members of Trump's senior staff were apparently not consulted on his final decision and the President surprise announcement on Thursday took Washington and some in the White House by surprise. A group of Trump senior advisors, including National Economic Council Director Gary Cohn, thought they had persuaded him not to follow through on his promise to take the aggressive trade measures he promised during the campaign. Their allies were dismayed with Trump’s decision to break with the Cohn group, arguing the tariffs will have bad, unintended consequences for American consumers.The tariff announcement was a rebuke to Cohn and some wonder if it could force Cohn to resign. But, White House press secretary Sarah Huckabee Sanders told reporters Cohn seems ready to stay on : "Gary was here yesterday afternoon, I talked to him in my office several times, so I don't have any reason to think otherwise." • Senator Ben Sasse, a Nebraska Republican who is not a friend of Trump, said : “Trade wars are never won. Trade wars are lost by both sides. Kooky 18th century protectionism will jack up prices on American families and will prompt retaliation from other countries. Make no mistake : If the President goes through with this, it will kill American jobs -- that’s what every trade war ultimately does. So much losing.” • Many of the details of the tariffs remain unclear, including whether certain US allies will be exempted. When asked if the tariffs will apply to all countries, Commerce Secretary Wilbur Ross, the leader of the pro-tariff group advising the President, said : “That’s what the President seemed to announce yesterday." Ross added that the tariffs would have to be “fairly broad” to have the desired effect. • Trump’s defense of the tariffs, despite disagreement within the ranks of his senior advisors and a drubbing on Wall Street late on Thursday (and again on Friday) after his surprise announcement, has also raised new fears about whether the President intends to end the North American Free Trade Agreement (NAFTA) with Mexico and Canada or scrap a free-trade pact with South Korea, both of which his administration is renegotiating. Stock market reactions were highlighted by executives from the automobile, construction and beverage industries, who expressed concern that tariffs would raise the prices of their products, negating consumers’ gains from the humming economy and tax cuts that Trump has so deftly put together. • • • WHY IS TRUMP SO DETERMINED ABOUT TARIFFS? Many are asking why the President would risk undoing all his good work to boost the economy by enacting high tariffs that might damage some major US industries. The EU, Canada and other major US trading partners threatened to retaliate if their exports to the US are affected. In addition to the EU's Juncker talking about bourbon, Harley-Davidsons, and Levi's, Canadian Foreign Minister Chrystia Freeland vowed to take "responsive measures" if the Trump administration imposes stiff tariffs on Canadian steel and aluminum products. Hans Jürgen Kerkhoff, president of the German Steel Federation, said Friday that the measures “clearly violate the rules of the World Trade Organization. If the EU does not react, our steel industry will pay the bill for U.S. protectionism." Canadian prime minister Justin Trudeau said : “The United States has a two billion surplus on steel with us so we regard the imposition of any new tariffs or any tariffs on steel or aluminum between our two countries as absolutely unacceptable." That would seem to argue for a swift settlement of the NAFTA renegotiation, something Canada could certainly advance if it chose to do so. And, the United Kingdom, meanwhile, gave a tempered, but wary reception to the announcement : “We are engaging with the US on what this announcement means in practice,” a spokesman for the prime minister said. “We have been clear that we are particularly concerned by any measures that would impact the UK steel and aluminum industries.” The UK may be hoping for an exemption, particularly as it is engaged in its own trading and tariffs standoff with the EU over the implementation over its 2016 decision to leave the union, and its steel industry has been decimated by Indian and Chinese steelmakers dumping steel and buying up British steelmakers. But, a White House official told the Wall Street Journal that such exemptions were unlikely. • BUT, President Trump is not all wrong. On Saturday he tweeted : "The United States has an $800 Billion Dollar Yearly Trade Deficit because of our 'very stupid' trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!" And, Commerce Department figures aside, whether the deficit is $566 billion or $800 billion makes very little difference. And, President Trump has supporters -- some in unusual places. The tariff move was cheered by labor unions, including the AFL-CIO, which said Thursday that the tariffs are “critical to leveling the playing field and ensuring that US steel producers and their employees have a fair shot in the global economy.” Trump has long argued that foreign countries, especially China, are flooding the US market with cheap steel that has forced domestic producers to shutter plants and cut jobs. Secretary Ross downplayed the gloomy predictions. During his appearance on CNBC, he held up a can of Campbell’s soup and Coca-Cola to argue their prices would only rise marginally as a result of the tariffs : “All this hysteria has a lot to do about nothing." • Fighting the US trade imbalance was a promise Trump made during the 2016 campaign, and he has been assiduous in keeping his campaign promises. • • • THE US TRADE DEFICIT PROBLEM. The United States has the largest trade deficits that the world has ever seen. It's been that way since 1975. The deficit in "goods and services" was $566 billion in 2017. Imports were $2.895 trillion and exports were only $2.329 trillion. The US trade deficit in goods, without services, was $810 billion. The United States exported $1.551 trillion in goods. The biggest categories were commercial aircraft, automobiles, and food. It imported $2.361 trillion. The largest categories were automobiles, petroleum, and cell phones. The United States could make almost everything it needs. But some countries, like China and Mexico, can make products just as well for a lower price. Theoretically, it makes sense to pay less for these goods because this provides savings that are then invested in the industries America does best, but that doesn't always happen in practice. For other products, America has an advantage. These are agricultural products and industrial supplies like organic chemicals. They also include capital goods like transistors, aircraft, motor vehicle parts, computers, and telecommunications equipment. The United States runs a trade deficit with countries who fit at least one of the following criteria -- they produce things more cheaply than the US can or they don't need what America is good at making. Most of the trading partners that the United States has deficits with fall into thes two categories. • The two largest are China and Japan. The largest US trading deficit is with China -- more than 65% of the US trade deficit in goods was with China. The $375 billion deficit with China was created by $506 billion in Chinese imports into the US. The main Chinese imports are consumer electronics, clothing, and machinery. America only exported $130 billion in goods to China. Many of the imports are sold by American companies that ship raw materials to be assembled for a lower cost in China. They are counted as imports even though they create income and profit for these US companies. BUT, this practice does outsource jobs away from US workers and seriously weakens the US economy. • And, the US trade deficit with Germany is $65 billion, just slightly less than that with Japan at $69 billion. The US exports $53 billion, a large portion of which is automobiles, aircraft, and pharmaceuticals. It imports $118 billion in similar goods : automotive vehicles and parts, industrial machinery, and medicine. The US also has a trading deficit with its NAFTA partners -- Canada and Mexico. The trade deficit with Canada is $18 billion. That's only 3% of the total Canadian trade of $582 billion. The United States exports $282 billion to Canada, more than it does to any other country. It imports $300 billion. The largest export by far is automobiles and parts. Other large categories include petroleum products and industrial machinery and equipment. The largest import is crude oil and gas from Canada's abundant shale oil fields. • The US trade deficit with Mexico is $71 billion. Exports are $243 billion, mostly auto parts and petroleum products. Imports are $314 billion, with cars, trucks, and auto parts being the largest components. Under NAFTA's imbalanced trade regime, US jobs have, literally, been "exported" to Mexico. • The importance of the EU is even greater because foreign direct investment (FDI). European companies accounted for $1.5 trillion, or 63%, of total FDI in the United States. American companies accounted for $1.7 trillion, or 50%, of FDI in Europe in 2009. These investments used four million workers on both sides of the Atlantic. That's how many were employed by the affiliates of European or US-based companies in 2009. For example, the German company Siemens, employed 60,000 people in the United States. General Electric employed 70,000 workers in Europe. (This information is cited from "U.S.-EU Trade and Economic Relations: Key Policy Issues for the 112th Congress," Congressional Research Service, January 18, 2012.) • • • THE CHINA TRADE PROBLEM. The UK Daily Mail reports that : "The US, China’s biggest trade partner after the EU, buys about 20% of Chinese exports but allows Beijing to run multibillion-dollar surpluses that offset its deficits with other partners. Last year, China exported goods worth 2.80 dollars to the United States for every dollar of American goods it bought, according to Chinese data. Its trade surplus of 275.8 billion dollars with the United States was equal to 65% of its global total." The Daily Mail says that makes China the "more vulnerable partner in this,” and that "Beijing has satisfied its trade obligations and appealed to Washington to settle market access and subsidy disputes through negotiation." • Will China respond forcefully to Trump's steel and aluminum tariffs, if they are enacted? The Daily MAil says : "Chinese leaders must weigh the need to back up threats with action against the risk of disrupting US market access for smartphones and other exports that matter more to the economy than metals." Economist Louis Kuijs of Oxford Economics says : "China will definitely respond. It doesn’t want to be seen as weak. But it will be relatively restrained. They don’t want to be seen as a party that is wrecking the international trading system.” • On the EU side, Deutshce Welle reported earlier this year that : "The Trump administration for its part has put leveling the trade playing field high on the agenda for Sino-US relations....the US president said he would push for a 'reciprocal tax' against nations that levy tariffs on US products. But officials did not provide details on how such a tax would be structured or what goods it would apply to. US President Donald Trump's first year in office saw the US trade gap leap to its highest level in seven years due to record imports. According to the fresh figures released by the US Commerce Department on Tuesday, the annual trade deficit in 2017 rose 12.1%....The deficit grew especially strongly in the final month of the year, adding 5.3% to reach $53.1 billion in December, the highest since October 2008. The news is likely to annoy US President Donald Trump, who has made narrowing the US trade deficit with the rest of the world one of his main goals." To achieve this, DW states that Trump has canceled the TPP (Trans-Pacitic Partnership) trade agreement with Pacific Rim countries and is renegotiating the North American Free Trade Agreement (NAFTA) with Canada and Mexico. He has also raised the trade rhetoric with China. Rightly so, because in 2017, "the US goods trade deficit with Mexico increased to $71 billion, while that with China rose by $375 billion -- the highest level on record." The cause of the higher trade deficits in 2017, according to economists, was mainly the result of higher demand from consumers and companies, showing that the US economy gathered speed in 2017. However, a broadening trade gap could also weigh on future growth as it might indicate a loss of US competitiveness. Deutsche Welle said : "For the time being though, it should not provide reason to worry because growing imports went along with rising US exports last year. Total US exports of goods and services in 2017 rose 5.5% to $2.3 trillion, their second highest level on record. The US posted all-time record goods exports to 29 countries, with $243 billion exported to Mexico, $130 billion to China and $56.3 billion to the United Kingdom. Imports rose faster though, climbing 6.7% for the year to reach $2.9 trillion, the highest level ever, according to the Commerce Department." • • • LARRY KUDLOW, ARTHUR LAFFER AND STEPHEN MOORE TALK ABOUT THE TARIFFS. Last Saturday, TheHill published a "Contributor" piece by Larry Kudlow, economic commentator with CNBC; Arthur Laffer, president of Laffer Associates; and, Stephen Moore, senior fellow at the Heritage Foundation. They are founders of the Committee to Unleash Prosperity and served as advisors to the 2016 Donald Trump campaign. The trio of conservative economists warned : "Trump must think twice about tariffs." • Kudlow, Laffer and Moors wrote : "One of the ironies of trade protectionism is that tariffs and import quotas are what we do to ourselves in times of peace and what foreign nations do to u?s with blockades to keep imports from entering our country in times of war. Or consider that we impose sanctions on US enemies such as North Korea, Russia and Iran because we want them to feel the economic pain of being deprived of imports. But now we are imposing sanctions on our own country by punishing with tariffs in order to make Americans more prosperous. If ever there were a crisis of logic, this is it." Al lthree agree that President Trump "genuinely believes that his steel and aluminum tariffs will save thousands of blue-collar jobs. We know from our interactions with him that he truly cares about these workers in Pennsylvania, Ohio and other Rust Belt states. We do too and we don't want factories to shut down. But even if tariffs save every one of the 140,000 or so steel jobs in America, it puts at risk five million manufacturing and related jobs in industries that use steel. These producers now have to compete in hyper-competitive international markets using steel that is 20% above the world price and aluminum that is 7% to 10% above the price paid by our foreign rivals. In other words, steel and aluminum may win in the short term, but steel and aluminum users and consumers lose. In fact, tariff hikes are really tax hikes. Some of those five million jobs will be put in harm’s way. If they sell less to foreigners, the trade deficit goes up, not down. Since so many of the things Americans consumers buy today are made of steel or aluminum, a 25% tariff may get passed on to consumers at the cash register. This is a regressive tax on low income families." • Kudlow, Laffer and Moore also raise the unsettling history of tariffs : "They have almost never worked as intended and almost always deliver an unhappy ending. The Smoot Hawley tariff of 1929 signed into law by Herbert Hoover gave us the Great Depression and worsened it. Richard Nixon’s 10% import surcharge contributed to the stagflation of the 1970s. George W. Bush tried to save the steel industry by imposing tariffs on steel. If those tariffs worked, we wouldn't be having this discussion today. ?We tried to save the color television industry with protectionist measures. Instead, they wiped out domestic production." • Turning to the Trump administration's argument that the tariffs are needed for national sucurity reasons, the three economists said : "We aren’t persuaded by the Trump administration’s claim that we need to impose these tariffs for national security reasons. Despite stiff competition from imports, many specialty steel producers are doing just fine and actually exporting steel to Mexico and Canada. Meanwhile, Canada is the No. 1 exporter of steel to the United States. Does anyone really believe Canada is a national security threat to the United States?" • BUT, the trio is worried -- about the fact that "that Canada and Mexico are now both threatening retaliatory tariffs against America. This tit-for-tat trade breakdown could put the North American Free Trade Agreement in serious jeopardy. That could inflict severe economic damage to all three nations, and a stock market meltdown." • The advice of Kudlow, Laffer and Moore? "Trump should continue to make American producers more competitive in global markets through tax, regulatory, energy, and other pro-America policy changes that bring jobs and capital back to the United States. That is happening at a furious pace right now as Trump has made America almost overnight the best and most reliable place in the world to invest. Steel and aluminum import tariffs will work decisively against this goal. In the early 1980s, Ronald Reagan invoked anti-dumping provisions against Japanese steel. It was one of his few decisions he later confessed he wishes he hadn’t made. Trump will come to learn the same thing, and we hope it is sooner, not later." • • • THE REAGAN TARIFFS ON JAPAN. The New York Post wrote on Saturday : "Trump loves to tout his love for making things right for the American worker. What he’s less willing to brag about is the impact of Reagan’s tariffs in the 1980s on cars, motorcycles (to protect Harley-Davidson) and semiconductors from Japan. Those moves produced a mixed bag of results. Yes, US manufacturers got some protection from Japanese 'dumping' of cheap products on our markets, but for the most part, consumers got hosed with higher prices and the automobile industry continued to bleed jobs. Then there’s the canard that somehow, the country will return to the 1950s manufacturing nirvana if we start making it difficult for the rest of the world to sell their goods here. But today, the world is a big, integrated place. A US economy that was once built on being an industrial powerhouse is now more modern and efficient and produces more jobs in the service sector than it does in manufacturing. Those services are consumed by our overseas trading partners. Meanwhile, raw materials are made in China and shipped to plants in the US, so American factories can remain competitive and keep people employed. To be sure, most economists outside of the 'fair trade' brigade inside the White House (economist Peter Navarro and Commerce Secretary Wilbur Ross) know that the 'fair trade' remedies of tariffs and tearing up NAFTA are foolish ideas. And maybe Trump does as well, and perhaps all his saber-rattling on trade is just him pulling a page from “The Art of the Deal” and looking to negotiate better terms from our trading partners." • The NYPost makes some good points. BUT, the US needs a manufactring base, and not just services sectors, for both jobs and national security. That is not even arguable. And, what ought to work in an ideal world is often messed up by greedy trading partners squeezing the US. • In fact, President Reagan advocated protectionism early in his 1980 campaign, telling the US auto industry : "Japan is part of the problem. This is where government can be legitimately involved. That is, to convince the Japanese in one way or another that, in their own interests, that deluge of cars must be slowed while our industry gets back on its feet..." He imposed a 100% tariff on selected Japanese electronic products for allegedly "dumping" computer memory chips, he said he did it "to enforce the principles of free and fair trade." And Treasury Secretary James A. Baker boasted about the protectionist record, saying that President Reagan "has granted more import relief to US industry than any of his predecessors in more than half a century." But, in 1988, the World Bank estimated that import restrictions in 1984 had the same effect as a 66% income tax surcharge on America's poorest citizens. The Mises Institute, the libertarian and classical-liberal economics research organization based in Atlanta, wrote in 1988 : "Less obvious was the harm to American producers, who lost exports and paid more for capital goods because of protectionism. For example, everyone, including the beleaguered American auto industry, paid more for steel because of the Reagan administration's restrictions on imports. Even the steel industry was hurt because artificially high prices stimulated the search for alternative materials." NOTE that at the time this included aluminum. • • • DEAR READERS, President Reagan was a very practical politician, as well as a conservative. He learned from his errors on tariffs and became a devoted defender of free trade. • On August 6, 1983, in his early period when tariffs on Japanese cars and eelctronisc were being enacted, in a radio address to the nation, President Reagan spoke about the benefits of trade and the dangers of protectionism. He said : "I’d like to talk to you today about trade -- a powerful force for progress and peace, as you well know. The winds and waters of commerce carry opportunities that help nations grow and bring citizens of the world closer together. Put simply, increased trade spells more jobs, higher earnings, better products, less inflation, and cooperation over confrontation. The freer the flow of world trade, the stronger the tides for economic progress and peace among nations. I’ve seen in my lifetime what happens when leaders forget these timeless principles. They seek to protect industries and jobs, but they end up doing the opposite. One economic lesson of the 1930’s is protectionism increases international tensions. We bought less from our trading partners, but then they bought less from us. Economic growth dried up. World trade contracted by over 60%, and we had the Great Depression. Young Americans soon followed the American flag into World War II. No one wants to relive that nightmare, and we don’t have to. The 1980’s can be a time when our economies grow together, and more jobs will be created for all. This was the spirit of the Williamsburg summit in May. The leaders of the industrialized countries pledged to continue working for a more open trading system. But sometimes that’s easier said than done." • Then, in 1985, and later, Reagan warned that he would veto protectionist legislation bouncing around Congress. He stated, “So-called protectionism is almost always self-destructive, doing more harm than good even to those it’s supposed to be helping....Protectionism almost always ends up making the protected industry weaker and less able to compete against foreign imports....From now on, if the ghost of Smoot-Hawley rears its ugly head in Congress, if Congress creates a depression-making bill, I’ll fight it.” Indeed, Reagan meant what he said. In 1985, he vetoed legislation imposing tariffs on textiles, shoes, and copper. • In 1986, under the General Agreements on Tariffs and Trade (GATT), Reagan started the Uruguay Round of multilateral trade negotiations. It culminated in lowering tariffs throughout the world and eventually the World Trade Organization. Over one hundred countries were signatories. • In 1987, as Congress was discussing more protectionist legislation, Reagan again warned against it. • In 1988, Reagan vetoed another textile protectionist bill over Democrat Party objections. Reagan said : “It would impose needless costs on American consumers, threaten jobs in our export industries, jeopardize our overseas farm sales and undermine our efforts to obtain a more open trading system for U.S. exports. This bill represents protectionism at its worst.” • The Reagan record of promoting trade, through words and actions, abounds. President Trump, who loves to quote President Reagan about tariffs, should read all of Reagan's history with tariffs. And, he ought to do it now -- before walking down a tariff and trade war road that President Reagan finally rejected. But, President Trump is right to pursue a reduction in US trade deficits, and his great negotiating skills will help immensely. A more even playing field in the import-export game played around the world -- mostly at the expense of the United States -- is both fair and needed if world trade is to continue to provide the right worldwide distribution of goods, services, AND jobs. The post-World War II days when the US had to shoulder a world that had been literally flattened by bombs are long over. The US did its job then. It is now time for the world to step up to its obligations as equal trading partners with the United States, not as its needy client states. Those days are gone -- forever, we hope.