And it's become obvious the President doesn't understand that:
President Trump said on Tuesday that Chinese manufacturing would “crumble” if the country did not agree to the United States’ trade terms, as newly released data showed his trade war was washing back to American shores and hurting the factories that the president has aimed to protect.
The president has continued to insist that pain from the trade war is falling primarily on China, not the United States. On Friday, he said American companies were leaving China in response to his tariffs, a development that put the United States in an “incredible negotiating position.” And he said any business that complained about financial pain from the tariffs was suffering from bad management, not the trade war.
"Blaming the victim" has become so common with this bumbling fool that we hardly even notice it anymore. But we should, because it exposes his inability to recognize a mistake when he's made one, a character flaw that puts our country at risk on almost a daily basis. In order to understand what his reckless trade war is causing, follow me below the fold for an ecological analogy:
Global supply chains are not naturally-occurring; they are a human construct. But once in place, they slowly evolve into an (almost) organic system. In any organic system, two major factors come into play: disruption and adaptation. While these effects may drive evolutionary growth, they are also destructive as hell. Literally millions of species have gone extinct because they could not adapt quickly enough to disruptions, so it's not a situation you should "welcome," by any stretch of the imagination.
America's farmers and manufacturers have built their supply chains over the course of decades in many cases, and the current level of tariffs on both sides of the trade war are massively disruptive. For many, rapid adaptation is simply not possible. Finding another market for your soybeans, or another source for your electronic components, may not even be possible. Or if you can, the price may be way too high (or low) for your operation to stay in the black.
Because Donald Trump really doesn't understand what it took to build those global supply chains, he works from the mistaken position they can be easily replaced with others. Logic would tell you that is wrong, because if that potential existed, the supply chains would (also) already exist.
Here's the kicker: Not only is breaking supply chains disruptive, the duration of that break is also critical. It's been 18 months since the first shots were fired in this trade war (steel and aluminum), and the manufacturing sector is right on the verge of dragging the entire economy down with it. Strangely enough, it's reports of power usage that signal that contraction:
For two weeks we heard one chorus about earnings: The consumer, backed by the confidence that comes from easy job-hunting and solid employment, is spending with alacrity, but well within means, and it's buoying the entire U.S. economy.
This week? It's a different story. Despite that two-thirds of our economy is consumer-spending driven, the other third?
It's gotten so bad, so fast, that it's crying out for federal intervention of some sort. That's what's causing the weakness in the market, and the non-consumer economy? It's just plain worrisome.
Tonight, for example, we are going to hear from one of the largest power companies in the country, American Electric Power (AEP) , which reported this very morning. Now when people hear data from the government about a fast or slow economy, they've gotten jaundiced about its accuracy.
There's nothing inaccurate about power data. So my breath was taken away when I heard CEO Nick Akins, say "the largest economic headwind we have at this impact of the trade war on the businesses is in AEP service territory."
They are turning the machines off, and sending workers home. And a big part of the reason for that is a second round of tariffs on Chinese steel and aluminum that went into effect back in April, after a 90 day "grace period" for companies to stock up. On already overpriced raw materials.
Our economic ecosystem is in trouble, and those broken supply chains are beginning to rust.