A Korus Line

The Trump administration delivered its first major achievement on the trade front last week — reaching a preliminary agreement with South Korea to renegotiate portions of the KORUS free trade deal in return for granting it exemptions to new US steel tariffs. Fellow Signalista @gflipton assesses how big a win this actually was, or wasn’t.


On the economic front, the revisions make only a Kafkaesque contribution to President Trump’s stated goal of reducing America’s bilateral trade deficit with Korea, which is concentrated almost entirely in the auto sector. The agreement loosens Korean regulations on US exports that don’t currently apply and extends US tariffs on vehicles that Korea doesn’t currently make. The changes could certainly affect future investment decisions by Korean and US firms, but it would take a lot to change South Koreans’ strong preference for German and Japanese cars.

On the domestic political front, however, Trump can claim that he’s delivered on his core campaign promise to renegotiate the “terrible, no good, very bad” trade deals of his predecessors and use the renegotiation to shore up support among the blue-collar base that carried him to the White House. He can even present the 30% reduction in Korean steel exports as a win to steel country, though early indications on the success of this strategy are mixed. Keep an eye on auto country in November.

On the international front, Trump has shown that by playing a tough, zero-sum game he can extract defined economic concessions from allies. That said, KORUS was a comparatively simple renegotiation, affecting a small number of sectors with clear objectives. What’s more, Seoul and Washington had a mutual incentive to reach a deal ahead of the upcoming summits that each will hold with Pyongyang.

Other pending US trade negotiations — most importantly, with Mexico and Canada on NAFTA and with China — will be much more complex, involving much larger players with stronger cards of their own to play. KORUS went well enough, but can Trump demonstrate a similar Art of the Deal on those much larger canvasses?

Wrecking the global economy's hopes for a relaxing late-August Friday, China and the US have taken fresh shots at each other in their deepening trade war.

First, China announced new tariffs on US goods in response to US levies on China's exports that are set to take effect next month.

Trump responded with a vintage tweet storm, lashing out at China and demanding that US firms stop doing business there. The Dow plunged as markets waited for the next shoe to drop. And drop it did: later in the day Trump announced higher tariffs on nearly everything that China exports to the United States.

Why now? Bear in mind, all of this comes right as Trump is leaving for this weekend's G7 summit in France. That gathering already promised to be a testy one – but with the global economy slowing, the impact of Trump's increasingly nasty trade war with China will add fresh tensions to the occasion.

So where are we in the trade war now? Here is an updated list of what measures each side has imposed to date, and what's next. Both sides have a lot at stake, but from the looks of it, the list isn't going to get shorter any time soon.

When Donald Trump first started talking about buying Greenland last week, we figured it was a weird story with less legs than a Harp seal.

Signal readers, we were wrong. President Trump was so serious about purchasing the autonomous Danish territory that this week he abruptly cancelled a trip to Denmark after the country's prime minister, Mette Frederiksen, labelled the idea "absurd."

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The Amazon in flames – More than 70,000 forest fires are burning in Brazil right now, most of them in the Amazon. That's up 84% over the same period last year, and it's the highest number on record. This is the dry season when farmers burn certain amounts of forest legally to clear farmland. But critics say Brazilian president Jair Bolsonaro's efforts to loosen conservation rules have encouraged farmers, loggers, and miners to set more fires, many of them illegally. Bolsonaro – a science skeptic who recently fired the head of the agency that tracks deforestation – says, without proof, that NGOs are setting the fires to embarrass his government. Meanwhile, the EU is holding up a major trade deal with Brazil unless Bolsonaro commits to higher environmental protection standards, including those that affect the Amazon.

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Over the past fifty years, the Amazon rainforest has shrunk by an area equal to the size of Turkey. In the 1960s and 1970s, the Brazilian government supported settlement of the sparsely populated region for security reasons. Since then, huge swaths of the forest -- which is crucial for limiting the world's greenhouse gasses -- have been cleared for farmland used to feed Brazil's population and support its massive agricultural exports. Greater awareness of the environmental impacts in the 1990s produced tighter conservation regulations, though plenty of illegal clearing continues. In recent years, the annual deforestation rate has begun to rise again, and Brazil's new president Jair Bolsonaro has pledged to weaken regulations further in order to support businesses.