Realist, not conformist analysis of the latest financial, business and political news

Peter Navarro’s FART Act – Sound And Fury, Signifying Nothing.

We should all be aware that Peter Navarro – unfortunately Trump’s Director of the newly created National Trade Council – has some pretty odd views on trade. He’s even admitted it himself back when. In an interview he agreed that there probably wasn’t one single person in the entire county with an economics PhD who agree with him. A position which is consistent with either being the one true prophet or being wrong. The betting being on the latter in all such cases.

It is with this in mind that we can consider this new FART Act. And yes, it really has been called that:

A report that Donald Trump is looking to walk away from the World Trade Organisation and instead adopt a United States Fair and Reciprocal Tariff Act, or Fart Act, has been greeted with loud amusement on Twitter.

Axios reported that it had received a leaked early draft of a bill ordered by the president, that would see America take the unlikely step of abandoning WTO rules, allowing Trump to raise tariffs without the consent of Congress.

The bill – the existence of which has not been independently confirmed – would be a dramatic shift in trade policy with wide-reaching impacts, but it was the name of the proposed bill that caught people’s attention.

Well, yes, OK, perhaps the White House doesn’t have quite as many giggling schoolboys as there are out here. What the act – proposed, obviously – does is say that the President can ignore previous commitments made to the World Trade Organisation when determining what tariffs should be. For example, it abandons the most favoured nation idea – if you offer a tariff rate on the import of a thing then it should be the same for everyone who is also signed up to the WTO. This is the cornerstone of the multilateral trade system so a breach would be, well, a breach really.

However, what’s really important to understand here is that it is only a proposed bill. It would have to get through Congress for the President to gain such powers. And it won’t get through Congress:

Trump was briefed on this draft in late May, according to sources familiar with the situation. Most officials involved in the bill’s drafting — with the notable exception of hardline trade adviser Peter Navarro — think the bill is unrealistic or unworkable. USTR, Commerce and the White House are involved.

In a White House meeting to discuss the bill earlier this year, Legislative Affairs Director Marc Short bluntly told Navarro the bill was “dead on arrival” and would receive zero support on Capitol Hill, according to sources familiar with the exchange.
Navarro replied to Short that he thought the bill would get plenty of support, particularly from Democrats, but Short told Navarro he didn’t think Democrats were in much of a mood to hand over more authority to Trump.

This is an idea from Peter Navarro and as with most of his ideas on trade it’s somewhere between ignorant and crazed. But then we knew that, right?

a poor player,
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

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Darren
Darren
2 years ago

Didn’t Tom Clancy use this is the main plot driver in one of his books? Something about reciprocal tariffs etc on Japanese imports, leading to some nutter flying a plane in to the Capitol building?

Spike
2 years ago

Fortunately, the word “trump” over here suggests an attribute of playing cards rather than flatulence, while the Guardian, like most American lefties without an actual point to make, revel in their own crudeness. As the US Republican Party’s expertise is slogans and acronyms, the “FART Act” will surely be renamed before its launch. And before its immediate sinking. Congress is more likely to rein in the President on tariffs than to give him new authority. You need only be opposed to Trump or understand the self-inflicted damage that tariffs do or want to recapture the Constitutional authority of Congress over… Read more »

BniC
BniC
2 years ago

More misdirection
It’s sometime handy to have something you don’t care about to hand so that you can reluctantly concede it as a bargaining tool and the response to these fishing trips is likely proving to be interesting to the White House as well

Spike
2 years ago
Reply to  BniC

If Kudlow is to be believed, the entire tariff war is the same thing: You give us what we want (Canada opens up its dairy market, China stops stealing intellectual property, UK buys more goods from more Trump campaign donors) and we will have a summit and proudly announce that Peace is at hand.

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