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Visualizing Trump's Trade Flip-Flops On Actual Shipping Routes

The bulk carrier RB Eden changed course twice thanks to Trump's trade reversals. A third time may be in the works.

The Voyage of the RB Eden tracks Trump's trade policy reversals with China.

The bulk carrier RB Eden was loaded with the grain at Archer-Daniels-Midland Co.’s terminal in Corpus Christi, Texas, and was initially bound for Shanghai. When China announced a 179 percent tariff on imports of sorghum in mid-April, it performed a U-turn in the Indian Ocean, according to vessel data tracked by Bloomberg, and sailed back around southern Africa toward Europe.

The vessel’s destination was changed to Cartagena, Spain, but according to the data, it never docked. On May 18, China scrapped its anti-dumping and anti-subsidy probe into sorghum. The same day, the RB Eden began sailing back toward the Atlantic. It’s currently bound for Singapore.

Reversal

Saga of the RB Eden

In response to Trump's sanctions on Chinese telecom giant ZTE, China put huge tariffs on US agricultural goods. That's what caused the RB Eden to turn the first time.

Then, just as the RB Eden nearly reached dock in Spain, Trump removed sanctions on ZTE and in turn, China removed tariffs on agricultural goods.

The RB Eden turned around and is headed back to Asia.

Will the RB Eden make it this time?

It's rather questionable. Trump has again reversed course on China.

Under pressure from Congress, Trump reversed course on ZTE sanctions yesterday, after declaring trade success on Sunday.

If China responds with agricultural tariffs again, the RB Eden will not make it to port in China.

Neither Here Nor There

I made a fitting comment yesterday, unaware of the saga of the RB Eden.

"Trump's trade policy is like a page from French president Emmanuel Macron. It's neither here nor there, nor anywhere."

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Mike "Mish" Shedlock

Nothing wrong with Trump, nor any other of Menken’s downright morons, confronting China. Nor engaging in any other nonsense for that matter. Just leave those of us higher up the evolutionary ladder out of it.

The way to “deal with” anti-something-too-complimecated-for-both-consummate-morons-and-their sycophant-army-to ever-begin-to-understand, hobgoblinistic China; in no way differs from how to best deal with anyone else: Buy that from them which they can offer a good deal on, sell them whatever they want to pay a decent price for, and otherwise grow up and leave others to do the same. It ain’t that hard.

Then end the Fed by noon tomorrow; default on all Federal debt an hour later; again define a dollar as 1/22 ounce of Gold from now until forever no matter how many tanks in the streets, starving children and other imaginary hobgoblins supposedly result from it; and be done. Solved! No more trade problems, debt problems banksters running around robbing and ruining people, overgrown governments nor any other of the currently fashionable pathologies blighting our progressive Dystopia.

I answered that question a dozen times already. I would scrap all tariffs and subsidies regardless of what any other nation did. If China is supplying cheap goods to the US we should be grateful. Anything that benefits the consumer is a good deal. Standards of living rise when costs go down. China, not the US loses under current policy. Chinese taxpayers are subsidizing US consumers! And we complain. It's idiotic!

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Mish, as you know, I'm on precisely the same page with you on trade, and this story of the ship that seems forever lost at sea with nowhere to go is truly funny.
From a realpolitik standpoint though, I would just adopt a "wait and see" stance. Trump's flip-flopping often leads to surprisingly positive outcomes (see North Korea).

Unilateral free trade may be fine in theory, but not so good in the real world. Fully agree that bi-lateral free trade is the nirvana to which we should aspire. But unilateral free trade has negative consequences when the other side of the trade is a country like China, which clearly has no interest in concepts like Comparative Advantage; with policies like "Made in China 2025 Initiative", China is clearly aiming to take it all.

Theory should always be compared with evidence. The US has had an approximation to unilateral free trade since the end of World War II, with much lower tariffs and non-tariff barriers than our trading partners. (Compare the prejudice in Japan or Korea against driving a foreign car with the joy Democrat elites find in driving cars which are not made by unionized US workers). The longer-term results of that approximation to unilateral free trade are clear -- hollowing out of the US economy, loss of manufacturing capabilities, reduced workforce participation, trade deficits, budget deficits. Yes, there are other factors involved (excessive regulation, degraded education, etc), but unbalanced terms of trade are clearly part of the Devil's Brew.

Based on the real world evidence, unilateral free trade is unsustainable in the long-term versus a mercantilist trader like China. We need a better solution. President Trump deserves credit for finally putting the trade imbalance issue on the table. If we don't like his negotiating style, it is up to us to suggest something better -- something that will work in the real world.

Mish is right that none is best, but failing that, balanced is essential; sustained unbalanced trade at it's core is simply a model for exporting one's own unemployment to trading "partners." Germany, China and Japan are among the current worst offenders.

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