Will there be a trade war?
This is Randy Russell sitting in for my good friend Jack Block. And now today’s commentary.
Just one week ago there were elections in Virginia and New Jersey that sent a clear message—Americans don’t want to be governed by the political left. Glenn Youngkin, a businessman and political novice, beat former Virginia Governor and Democratic National Committee Chairman Terry McAuliffe by two percentage points. Just 12 months ago Joe Biden carried Virginia by over 10 points. Interestingly, one year ago Glenn Youngkin’s name recognition stood at less than 2%. Republicans also elected Winsome Sears as Lt. Governor and Jason Miyares as Attorney General, the first African American and Latino, respectively, to serve in these positions in Virginia history. And Republicans gained control of the House of Delegates.
What happened in Virginia? Youngkin ran a state-based election focusing on education, school curriculums, and holding local school boards accountable. Meanwhile, McAuliffe tried to nationalize the campaign linking Youngkin to Donald Trump every opportunity he could. In the end, McAuliffe’s strategy failed. Youngkin won Virginia’s rural counties with 80% of the vote, won the Hispanic vote by 9 points, and made substantial inroads with suburban women who strongly favored his focus on education and local school curriculums.
Meanwhile, New Jersey, a state Joe Biden won by 16 points, saw incumbent Governor Phil Murphy eke out a slim victory over a political novice. And in a stunning upset, truck driver Ed Durr, who spent just $2,000 on his campaign, beat Steve Sweeney, the President of the New Jersey State Senate. And finally in Minneapolis, voters rejected by 12 points a ballot initiative that would abolish the Police Department and establish a Department of Public Safety.
So…. what is the key takeaway from last week’s election? Governing from the left is not what most Americans want nor expect from the Government. Most importantly, government overreach—including excessive spending and continued mandates—aren’t what people voted for in the 2020 elections. And in an ominous sign for Congressional Democrats, Dave Wasserman, a highly respected political observer is now predicting that the Republicans will pick up 40 seats in the House and take back control of the Senate in 2022.
Beyond the elections, the U.S. House of Representatives, after months of infighting, completed action on the $1.2 trillion infrastructure bill which will fund roads, bridges, ports and rural broadband. Far less certain is the fate of the so-called human infrastructure package which would greatly expand health and education programs and new climate-related initiatives. Continued debate between progressives and moderates in the House and Senate, such as Senator Joe Manchin of West Virginia, have left the fate of this nearly $2 trillion package in doubt.
Finally, a very special thanks to all those who have served in the military. It is because of their efforts and sacrifices that each of us are blessed to live in this Great Nation. As we celebrate Veterans Day, God bless every one of our veterans! May we never ever take for granted the freedoms they fought and sacrificed for. This is Randy Russell reporting from Washington.
Senator Bernie Sanders and his Socialist-leaning Members of Congress continue to press to spend more money on social programs. I remember when President Reagan came to town, he stood up for smaller government, less regulations, less spending. A new Gallup poll today says that support for bigger government is headed down. Only 43% want more government. We don’t need a dramatic expansion of the welfare state.
Turn to trade which is so important for our country. Our U.S. Trade Representative Katherine Tai has a big challenge in dealing with China. The Biden Administration is not ready to just lift tariffs on China imposed by President Trump. It is a real trade war. China has tariffs of 58.3% on imports from U.S. We have a 66.4% tariff on China’s goods coming into the U.S.
Representative Tai says “decoupling relations with China is not a realistic outcome in terms of our global economy. Washington needs a co-existence with Beijing.” I agree. China has the biggest population and just behind the U.S. has the number two economy in the world. We need to live together and avoid conflict. We don’t want trade conflict and we certainly don’t want military conflict.
The Phase One trade deal that President Trump negotiated with China is worth keeping even though China is coming up short on purchases from the U.S. Representative Tai said “We need to communicate directly with China. Our objective is not to inflame trade tensions with China.” Also, it isn’t a good idea to rely too much on any one country when it comes to trade. We do need to diversify. However, as long as China is buying, we are selling. Since China has made progress in controlling African Swine Fever, they have rebuilt their swine herds and that pork export market is on the decline. But the Chinese beef market is booming. Our beef exports to China are up 21% compared to last year. U.S. total ag exports will exceed our ag imports this year which is a reversal of the last two years. I don’t have the time to cover the threat of inflation, but maybe next week. Gasoline, rent, food, labor everything is up – 5.4% and rising.