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Does the company owned by the world’s wealthiest man really deserve nearly $7 billion of taxpayers’ money?
Joanne Black
Last weekend, a friend and I visited Culpeper, a small town in the state of Virginia, southwest of the capital. The original town centre has nice cafes and independent shops, many selling handmade, second-hand or repurposed items.
The shops provided a welcome refuge from the swirling snow outside and from the strip malls along the highway nearby and the chain stores near where I live.
Increasingly, the only difference between malls in various US cities is the number of stores that are permanently closed. But online retailing is not solely to blame; if, as the saying goes, the customer is always right, then the customer is responsible for the white-bread retail diet.
Almost all retailers are struggling, which is why recent moves by the state government here are such an affront. Maryland politicians have just taken another step towards offering Amazon an astonishing US$5 billion ($6.9 billion) in incentives if the company builds its proposed “HQ2” here in Montgomery County, where
I live, a few kilometres from the border with Washington
DC. Amazon has a shortlist of 20 locations for its massive complex, including two other sites nearby, one in DC and one in Virginia. As a Maryland taxpayer, I oppose this huge package of subsidies. If the state has billions to give away, we are being overtaxed.
I also oppose it because recently I walked a few blocks through central Baltimore, which is also in Maryland, and saw, sleeping in doorways, numerous examples of need far greater than Amazon’s.
I consider it a matter of principle that public money should not be used to subsidise any private company. But for funds to be earmarked for Amazon – the world’s biggest online retailer, owned by the world’s wealthiest person, Jeff Bezos – is simply offensive. Every state competing in Amazon’s beauty contest is offering incentives, but no proposal is a as generous as Maryland’s. The world over, nothing comes as easily to politicians as spending taxpayers’ money.
It is not yet clear how President Donald Trump’s confident declaration on Twitter last month that “trade wars are easy to win” is panning out. The balloon went up when he suddenly imposed import tariffs on washing machines, solar panels and, later, steel and aluminium, especially from China.
Trump then upped the ante, threatening tariffs on US$50 billion worth of imports from China, ranging from motorcycles and snow ploughs to material used in dental fillings. China retaliated with threats of tariffs on pork, nuts, fruit and sparkling wine, and later, after more provocation, proposed tariffs on American cars, chemicals and soybeans. This tit for tat is reminiscent of two kids goading each other in the back seat on a long car trip.
The opaque nature of Chinese commerce means its companies are often subsidised, so Trump is correct to say that there is not a level playing field in international trade. Every country that trades with China knows this and resents it. Tackling it is a good idea. But Trump’s wilful insistence that complexity is reducible to a tweet is unhelpful.
Trading pacts such as the Trans-Pacific Partnership and its “comprehensive and progressive” successor, the CPTPP, are a better response, because transparency, rules and dispute procedures are agreed.
But why negotiate complex deals when you can tweet from bed instead? Perhaps, rather than say that trade wars are easy to win, Trump meant to tweet that trade wars are easy to start. If so, he has proved his point.
The tit for tat is reminiscent of two kids goading each other in the back seat on a long car trip.