Are we on the verge of a Trade war?

[Michael J. Fletcher]

The trade talks on steel imports were dragging on, and Robert Lighthizer didn’t care for the Japanese offer. So he folded it into a paper airplane and launched it across his desk at Japan’s lead negotiator.

Within days, the Japanese agreed to cut their nation’s share of the U.S. steel market, a key piece of then-President Ronald Reagan’s plan to curb foreign steel imports. The 1985 deal capped weeks of negotiations in which Lighthizer, then the deputy U.S. Trade Representative, shocked his Japanese counterparts with rough-hewn jokes and wore them out with his disdain for their proposals, former colleagues recalled. During one Japanese presentation, he devoted his attention to playfully disassembling his microphone.

Robert Lighthizer

Source: Skadden
Now, Lighthizer, 69, has been handed a megaphone. He’s preparing to take over as top trade negotiator for a president who argues that the true roots of Republicanism lie in the protectionist bent of such early leaders as Abraham Lincoln. Donald Trump has promised a tough new approach to trade that will shield American workers and companies, even if that means slapping tariffs on foreign goods and ignoring decisions made by the World Trade Organization.

https://www.bloomberg.com/politics/...hammer-aims-to-pound-china-mexico-and-the-wto

 

[zdreg]

The trade talks on steel imports were dragging on, and Robert Lighthizer didn’t care for the Japanese offer. So he folded it into a paper airplane and launched it across his desk at Japan’s lead negotiator.

is this a known negotiating tactic?

 

[tommcginnis]

is this a known negotiating tactic?

Absolutely.
As a trustee of my undergraduate college, I was in a board meeting chaired by the CEO of Sentry Insurance.
He was upset -- we were bumping up against the t-off time he'd called for the company golf course. He let us know that we *had* to make that time, and that we weren't going to be the cause of a whole slew of other Sentry employees being off by hours that day, because their t-off time got bumped by the CEO. Just wasn't going to happen!

We were appalled.

But eventually, we all came to understand -- all the yammering in the world (and we were *yammering*) would not solve the issues being faced, and that we needed to *move*. DO something. Ready, Fire, Aim. "Get 'er done." came out so many years later....

So, throwing a little cold water on things is a great way to remind people that ceremony should support process, not be a process unto itself. Lyndon Johnson (another "insider" who was rebranded as a change-agent) was famous for dozens of such acts.

 

[tommcginnis]

I'll even confess my own tactic:
I work as hard as anything to figure out a fair position for both sides, and enumerate what that position is based upon. Then I go *to* that fair number, and plant my flag. If you want to do business, "Good." If you don't wish to do business at a fair price, then I don't wish to do business with you, period, and my offer goes further away, step by step. If you have new facts or factors you wish to see re-considered, I'm all ears, and entirely willing to re-evaluate the bargain from the top down. But don't come to the table with a 50¢ offer to my $1.50, expecting to go half-way "together" to $1.00 -- cuz I just went to $1.60, and that is fading fast.

(It's not a paper airplane, but it does wake people up.)

 

[murray t turtle]

The trade talks on steel imports were dragging on, and Robert Lighthizer didn’t care for the Japanese offer. So he folded it into a paper airplane and launched it across his desk at Japan’s lead negotiator.

Within days, the Japanese agreed to cut their nation’s share of the U.S. steel market, a key piece of then-President Ronald Reagan’s plan to curb foreign steel imports. The 1985 deal capped weeks of negotiations in which Lighthizer, then the deputy U.S. Trade Representative, shocked his Japanese counterparts with rough-hewn jokes and wore them out with his disdain for their proposals, former colleagues recalled. During one Japanese presentation, he devoted his attention to playfully disassembling his microphone.

Robert Lighthizer

Source: Skadden
Now, Lighthizer, 69, has been handed a megaphone. He’s preparing to take over as top trade negotiator for a president who argues that the true roots of Republicanism lie in the protectionist bent of such early leaders as Abraham Lincoln. Donald Trump has promised a tough new approach to trade that will shield American workers and companies, even if that means slapping tariffs on foreign goods and ignoring decisions made by the World Trade Organization.

https://www.bloomberg.com/politics/...hammer-aims-to-pound-china-mexico-and-the-wto

%%
Japan is smart,MJF, they dont hold Hiroshima against US. As far as the US auto market goes , i say Japan is still king, since they built plenty of HI quality plants in US, Honda, Toyota, Datsun-Nissan.......I have owned Saturn-GM, before they[GM] went belly up LOL Thanks.

 

[Handle123]

It is a given USA are not equal in goods exported, President Trump going to stick it to those who don't play fair. Between lowering corporate taxes so companies can bring in funds they been holding elsewhere to building factories here is the states, by taxing foreign made products is THE only way to do it. People do not change unless it is painful, more pain the more change, no one changes any more for the good of the country, so it is long overdue to make things right again.

 

[Daal]

"Would major exporting countries retaliate in other ways? Would this start another Smoot-Hawley tariff war? Hardly. At the time of Smoot-Hawley we ran an unreasonable trade surplus that we wished to maintain. We now run a damaging deficit that the whole world knows we must correct.

For decades the world has struggled with a shifting maze of punitive tariffs, export subsidies, quotas, dollar-locked currencies, and the like. Many of these import-inhibiting and export-encouraging devices have long been employed by major exporting countries trying to amass ever larger surpluses--yet significant trade wars have not erupted. Surely one will not be precipitated by a proposal that simply aims at balancing the books of the world's largest trade debtor. Major exporting countries have behaved quite rationally in the past and they will continue to do so--though, as always, it may be in their interest to attempt to convince us that they will behave otherwise."

Who said this? Some loon who supports Trump and hates mexicans? No, it was Warren Buffett in 2003. His 'proposal' was to implement a tariff system to bring down the US trade deficit, which he views as a problem

http://fortune.com/2016/04/29/warren-buffett-foreign-trade/