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Direct talks to settle Korean conflict between the two Koreas edge closer

In his New Year address Kim Jong-un embraced the Russian-Chinese proposal for direct talks between the two Koreas to settle their conflict

Alexander Mercouris

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Kim Jong-un’s New Year address to the Korean nation – addressed pointedly to all Koreans, not just to those who live in the North but also to those who live in the South – has mainly attracted Western attention because of his inflammatory comments about the nuclear button on his desk.

North Korea’s own official account of Kim Jong-un’s address shows however that these were only passing words.  Instead the speech’s primary focus was the diplomatic initiative Kim Jong-un extended to South Korea.

These words deserve to be set out at length;

The prevailing situation demands that now the north and the south improve the relations between themselves and take decisive measures for achieving a breakthrough for independent reunification without being obsessed by bygone days. No one can present an honourable appearance in front of the nation if he or she ignores the urgent demands of the times.

This year is significant both for the north and the south as in the north the people will greet the 70th founding anniversary of their Republic as a great, auspicious event and in the south the Winter Olympic Games will take place. In order to not only celebrate these great national events in a splendid manner but also demonstrate the dignity and spirit of the nation at home and abroad, we should improve the frozen inter-Korean relations and glorify this meaningful year as an eventful one noteworthy in the history of the nation.

First of all, we should work together to ease the acute military tension between the north and the south and create a peaceful environment on the Korean peninsula.

As long as this unstable situation, which is neither wartime nor peacetime, persists, the north and the south cannot ensure the success of the scheduled events, nor can they sit face to face to have a sincere discussion over the issue of improving bilateral relations, nor will they advance straight ahead towards the goal of national reunification.

The north and the south should desist from doing anything that might aggravate the situation, and they should make concerted efforts to defuse military tension and create a peaceful environment.

The south Korean authorities should respond positively to our sincere efforts for a detente, instead of inducing the exacerbation of the situation by joining the United States in its reckless moves for a north-targeted nuclear war that threatens the destiny of the entire nation as well as peace and stability on this land. They should discontinue all the nuclear war drills they stage with outside forces, as these drills will engulf this land in flames and lead to bloodshed on our sacred territory. They should also refrain from any acts of bringing in nuclear armaments and aggressive forces from the United States….

A climate favourable for national reconciliation and reunification should be established.

The improvement of inter-Korean relations is a pressing matter of concern not only to the authorities but to all other Koreans, and it is a crucial task to be carried out through a concerted effort by the entire nation. The north and the south should promote bilateral contact, travel, cooperation and exchange on a broad scale to remove mutual misunderstanding and distrust, and fulfil their responsibility and role as the motive force of national reunification.

We will open our doors to anyone from south Korea, including the ruling party and opposition parties, organizations and individual personages of all backgrounds, for dialogue, contact and travel, if they sincerely wish national concord and unity.

A definite end should be put to the acts that might offend the other party and incite discord and hostility between fellow countrymen. The south Korean authorities should not try, as the previous conservative “regime” did, to block contact and travel by people of different social strata and suppress the atmosphere for reunification through alliance with the north, under absurd pretexts and by invoking legal and institutional mechanisms; instead, they should direct efforts to creating conditions and environment conducive to national concord and unity….

The south Korean authorities need to know that they will gain nothing from touring foreign countries to solicit their help on the issue of inter-Korean relations, and that such behaviour will give the outside forces, who pursue dishonest objectives, an excuse for their interference and complicate matters further. Now it is not time for the north and the south to turn their backs on each other and merely express their respective standpoints; it is time that they sit face to face with a view to holding sincere discussions over the issue of improving inter-Korean relations by our nation itself and seek a way out for its settlement in a bold manner.

As for the Winter Olympic Games to be held soon in south Korea, it will serve as a good occasion for demonstrating our nation’s prestige and we earnestly wish the Olympic Games a success. From this point of view we are willing to dispatch our delegation and adopt other necessary measures; with regard to this matter, the authorities of the north and the south may meet together soon. Since we are compatriots of the same blood as south Koreans, it is natural for us to share their pleasure over the auspicious event and help them.

We will, in the future, too, resolve all issues by the efforts of our nation itself under the unfurled banner of national independence and frustrate the schemes by anti-reunification forces within and without on the strength of national unity, thereby opening up a new history of national reunification.

Availing myself of this opportunity, I extend warm New Year greetings once again to all Korean compatriots at home and abroad, and I sincerely wish that in this significant year everything would go well both in the north and in the south.

(bold italics added)

Whilst Kim Jong-un’s speeches may come across to Westerners as cliché ridden and bombastic, to North Koreans long accustomed to the all-but invisible rule of their previous Great Leader Kim Jong-il they are more likely to come across as straightforward and direct.

In this case the thrust of Kim Jong-un’s comments is clear enough.  He has enthusiastically embraced the plan for direct talks between North Korea and South Korea to settle the Korean conflict which was first proposed by the Russians and which was subsequently supported by the Chinese.  The words in his New Year address which I have highlighted clearly say as much.

Here is how I described this plan when I discussed Russian diplomatic moves to end the Korean  conflict in an article I wrote for The Duran on 22nd October 2017

…….for Russia peace on the Korean Peninsula opens up tantalising economic opportunities.

As well as its longstanding links to North Korea, Russia has developed extremely friendly relations with South Korea, which has expressed great interest in investing in the Russian economy.

Beyond this however lies the prospect for Russia of Russia building a gas pipeline and railway to South Korea across North Korea, providing South Korea with Russian gas, North Korea with a source of revenue in the form of Russian transit fees, and both Koreas – but most importantly South Korea – a land bridge to Europe…..

Obviously for the Russians, anxious to develop their economic and political relations with the East Asian nations and seeking investment in their own Far Eastern territories, this is an attractive prospect.

It comes moreover with a political dimension, with the Russians looking forward to a restoration of political links between the two Koreas, possibly in some sort of confederation with each other.  The idea of a confederation between the two Koreas was actually proposed by Kim Il-sung in the 1970s, and though Cold War conditions at that time made it impossible, it may not be so farfetched today.

If the two Koreas – with an aggregate population of almost 80 million people, a highly trained and well-educated population, abundant natural resources, and advanced industries (including some in North Korea) – were ever to come together in that way the result would be an economic colossus, potentially rivalling Japan as the second biggest economy after China in East Asia.

For the Russians – with their good relations with both Koreas – it is a tantalising prospect, especially if they can use the prospect of better economic and political links between themselves and the two Koreas – and between the two Koreas with each other – to distance South Korea from the US, and to draw the two Koreas into closer relations and perhaps in time into full integration with the Eurasian powers (ie. with China and Russia).

That these ideas hover in the background – at least in the minds of some Russians – was confirmed by Putin during his recent question and answer session at the Valdai conference, where he specifically alluded to the project to build railway and pipeline links to the Koreas, linking them to Russia and ultimately – via the Eurasian powers – to Europe.

What role can Russia play? It can act as an intermediary in this case. We proposed a number of joint tripartite projects involving Russia, North Korea and South Korea. They include building a railway, pipeline transport and so on. We need to work. We need to get rid of belligerent rhetoric, to realise the danger associated with this situation, and to move beyond our ambitions. It is imperative to stop arguing. In fact, it is as simple as that.

(bold italics added)

…..the Russians apparently now see an opening in the latest crisis to put their ideas for the Korean Peninsula back on track, as Putin’s words at the Valdai Forum show.

The result is a flurry of Russian diplomacy, with repeat visits to Moscow of Choe Son Hui, the head of the North American department of North Korea’s Foreign Ministry and one of North Korea’s most senior diplomats….

…….the fact that the Russians tried to set up a meeting in Moscow between the North Koreans and the South Koreans, even if it was unsuccessful, should serve as a warning to the US.

Going back to what Putin said at the Valdai Forum, it is notable how he spoke of “tripartite projects involving Russia, North Korea and South Korea”.  By contrast Putin’s comments about the US role in creating the Korean crisis shows little confidence – to put it mildly – in US diplomacy.

We did agree at some point that Korea would stop its nuclear weapons’ programmes. No, our American partners thought that was not enough, and, a few weeks later, I believe, after the agreement, imposed more sanctions, saying that Korea can do better. Maybe it can, but it did not take on such obligations. It also immediately withdrew from all the agreements and resumed everything it was doing before.

If the US persists in its present posture – saying it is ready to talk to North Korea but refusing to do so, saying it has no plans for regime change in North Korea but refusing to give North Korea any security guarantees, saying North Korea must disarm but ruling out any withdrawal of US troops from the Korean Peninsula, criticising Kim Jong-un for imposing hardships on North Korea’s people and then searching for ways to increase the hardship which is inflicted on them, and demanding that China solve the Korean crisis for the US without the US giving anything in return – then sooner or later the point will come when the Russians will tell the South Koreans that the biggest obstacle to a peaceful settlement of the crisis in the Korean Peninsula is not North Korea but the US.

At that point the Russians will no doubt point out to the South Koreans that they have a far greater interest in a peaceful settlement of the crisis than the US does, since a failure to resolve the crisis is putting the future survival not just of North Korea but also of South Korea and of the whole Korean nation at risk.

At that point the Russians will no doubt also point out to the South Koreans that it is in their hands to end the Korean crisis by coming to terms directly with North Korea, and that they do not actually need the US to achieve this.

It is not after all as if the contours of a possible Korean settlement are difficult to see: a non-aggression pact between the two Koreas, a withdrawal of US troops from the Korean Peninsula, and an agreement by North Korea that it give up its weapons in return for formal security guarantees from the Great Powers (in this case this means the two Eurasian Great Powers, Russia and China).

There is no logical reason why any of this should require the agreement of the US, and if the two Koreas were to agree to this the US would not be in a position to prevent it.

The South Koreans are not ready for this message at the moment, but the Russians – who privately probably already think all these things – may calculate that if they bide their time and wait for the right moment the South Koreans will become more willing to listen as the true extent of US intransigence becomes clear.

In a subsequent article for The Duran dated 19th November 2017 I pointed out that China fully backs this plan and the two Great Eurasian Powers – Russia and China –  are working closely together to achieve it, with the Russians talking to the North Koreans and the Chinese talking to the South Koreans in order to get the two Koreas to talk to each other

The Chinese and Russian objectives are in all respects identical, conclusively confirming that the two Eurasian Great Powers are acting in concert towards the same objective,.

Clearly there is an agreed division of labour between them, with the Chinese talking to the South Koreans over whom they have substantial economic leverage (see this article by Reuters), and with the Russians talking to the North Koreans, with whom – unlike the Chinese – they have traditionally always had good relations…..

In light of all this the possibility of an eventual South Korean realignment with South Korea agreeing to become part of some sort of regional structure bringing together however loosely the two Koreas and China and Russia does not seem to me altogether farfetched….

[the Chinese and the Russians] are pressing Seoul and Pyongyang to begin direct talks with each other.  At the back of their minds they will hope that when such talks begin the idea of a realignment will emerge naturally out of them.

The prospects are in fact better now than they have ever been.

A rapprochement bringing together the two Koreas and China and Russia would have been inconceivable during the Cold War when Kim Il-sung first proposed it because of the bitter ideological divisions of that period.

In the early 2000s, when it was again mooted, the US was still very much the hyper-power with an effective veto over any move by South Korea and with the Chinese and the Russians having little to offer.

By contrast today the huge growth of Chinese power and the strong recovery of Russia mean that for the first time a rapprochement between the two Koreas, China and Russia looks both attractive and viable.

Whether the negotiations currently underway between the Chinese and the South Koreans and the North Koreans and the Russians eventually lead to that outcome remains to be seen.

However already Chinese diplomacy has achieved a dramatic success, with South Korea’s agreement to limit THAAD deployments on the Korean Peninsula, the South Koreans ruling out the idea of a tripartite alliance between themselves the US and Japan, and with the South Koreans also agreeing to re-start defence talks with China.

My guess is that a rapprochement bringing together the two Koreas and realigning them closer to China and Russia is both fully viable and much closer than many realise.

Indeed its logic is so strong that if or rather when the two Koreas finally begin to talk to each other I expect it to come to the forefront quickly.

The challenge is to get those talks started.

The Russians have made a strong pitch to the North Koreans, whilst the Chinese breakthrough with the South Koreans suggests that the start of direct talks between Seoul and Pyongyang may not be as far off as most people think.

Kim Jong-un’s New Year speech and the positive response it has received in South Korea means that some form of dialogue between the two Koreas is likely to start soon.

Whether that will result in direct talks on a security treaty to settle the conflict in the Korean Peninsula as the Russians and the Chinese want remains to be seen.  In a discussion on this issue in which I appeared on Press TV Michael Lane of the American Institute of Foreign Policy put the chances of that as “less than 50%”.

Actually those chances already look high given how intractable the conflict in the Korean Peninsula has been up to now.

Given the risk to the US of it being presented with security agreements it has played no part in negotiating if Russian-Chinese plan succeeds, an under 50% chance of it happening might actually look unacceptably high.

The prospect of direct talks between the two Koreans has in fact never looked stronger, and the diplomatic game in the Korean Peninsula is now in play.

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Donald Trump open to lifting Russian sanctions

Comments in interview with Reuters indicate that the doors are not entirely slammed shut between the US and Russia regarding sanctions.

Seraphim Hanisch

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On Wednesday August 22, the latest sanctions set against Russia by the US go into effect. These sanctions have already exacted a toll on the Ruble sending it into the high sixties against the dollar last week. At the time of this writing the ruble has only slightly improved from the worst level since the announcement, and this round of sanctions is the most painful since the Ruble hit a crippling level of 83 to the dollar in late 2015.

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However, US President Trump indicated once again that the US is open to working with Russia and to making a deal which would ease sanctions in place.

This report, by both RIA Novosti and TASS offer some detail:

President of the United States Donald Trump would be ready to consider the possibility of lifting the US sanctions on Russia if Moscow begins taking joint steps with Washington, including on Syria and Ukraine, he said this on Monday in an interview with Reuters.

Trump said that the question of lifting US sanctions on Russia was not brought up during his recent meeting with Vladimir Putin, however, he stated a condition for its possible withdrawal. “I would consider it if they do something that would be good for us. But I wouldn’t consider it without that,” he said.

Trump added that at the meeting the parties talked about Israel, Syria, Ukraine, Crimea, and the Nord Stream 2 pipeline project.

The United States began imposing extensive sanctions against Russia in 2014 after the reunification of Crimea with Russia. Restrictions were subsequently expanded and updated many times, they concern both individuals and legal entities. In the following years, Washington found many other reasons for imposing sanctions against Moscow, including alleged interference in the presidential election of 2016, alleged involvement of Russian officials in violation of human rights. So far, there has been no substantive discussion on the removal of restrictions from Russia.

The Reuters interview had more to say about this:

ON HIS RECENT MEETING WITH RUSSIA’S PUTIN

“It was only Fake News that criticized. … We had a very good, I guess, close to two-hour meeting. We had another good meeting with a lot of our representatives there. We talked about Israel, we talked about insecurity for Israel, we talked about Syria, we talked about Ukraine.”

“I mentioned Crimea, sure. I always mention Crimea whenever I mention Ukraine. Putin and I had a very good discussion. It was a very — I think it was a very good discussion for both parties. I mentioned the gas pipeline going to Germany.”

ON WHETHER PUTIN ASKED TRUMP TO LIFT U.S. SANCTIONS ON RUSSIA

“No, he did not. He never brought it up.”

ON WHETHER HE WOULD CONSIDER LIFTING SANCTIONS ON RUSSIA

“No. I haven’t thought about it. But no, I’m not considering it at all. No. I would consider it if they do something that would be good for us. But I wouldn’t consider it without that. In other words, I wouldn’t consider it, even for a moment, unless something was go — we have a lot of things in common. We have a lot of things we can do good for each other. You have Syria. You have Ukraine. You have many other things. I think they would like economic development. And that’s a big thing for them.”

This interview was held the day before the new sanctions were to go into effect. President Trump actually made no direct reference to the new sanctions, but this series of statements brings up an interesting thought.

President Putin has been silent on the matter of sanctions, even though the lower level government officials have spoken out about the injustice that is a fact, given the nature and cause of the sanctions. But an anonymous observer offered the interesting thought that, contrary to appearances, the American president may be trying to project the image of “strength against Russia” that is vital for him to pass through the midterm elections without losing the House.

If he loses the House to the Democrat Party, the new House leadership would almost certainly bring impeachment proceedings against the President. While this, like Russiagate, would be an absolute farce, it would have the effect of severely impairing the President’s agenda. While the House remains in GOP hands, this at least will not happen. The source mentioned that with such a strategy in place, if the midterms went the GOP’s way then Trump would be able to lift the sanctions later.

While this seems to be a very speculative thought, it is interesting that it was suggested only hours before the Reuters interview became publicly known. It would seem possible that this was a very gentle signal of willingness on the part of the American President to continue seeking better relations with Russia.

One thing is certain: a lot of policy is riding on the outcome of the midterms. How they go will shape US policy and foreign policy very strongly. This is truly a critical election approaching – for the US and for the world.

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Denmark As A Model For American Socialists?

In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high.

The Duran

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Authored by Lars Hedegard via The Gatestone Institute:


Here are some facts to consider before American “democratic socialists” look to Denmark for guidance, as Senator Bernie Sanders did during the 2016 presidential campaign.

First of all, Danes actually pay for their brand of socialism through heavy taxation. In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high. If you receive public support and are of working age and healthy enough to work, the state will require that you look for a job or it will force a job on you.

The willingness of all the Danes to pay high taxes is predicated on the country’s high degree of homogeneity and level of citizens’ trust in each other, what sociologists call “social capital.” By and large, Danes do not mind paying into the welfare state because they know that the money will go to other Danes like themselves, who share their values and because they can easily imagine themselves to be in need of help — as most of them, from time to time, will be.

Whenever politicians propose tax cuts, they are met with vehement opposition: So, you want to cut taxes? What part of the welfare state are you willing to amputate? And that ends the debate.

Danes, in contrast to American socialists gaining ground in the Democratic Party, are increasingly aware that the welfare state cannot be sustained in conditions of open immigration. A political party agitating for “no borders” could never win a Danish election. Danes do not suffer from historical guilt: they have not attacked any other country for more than two centuries and have never committed a genocide.

Moreover, there is an even deeper truth to ponder: Denmark is not really socialist but constitutes a sui generis fusion of free-market capitalism and some socialist elements. Denmark has no minimum wage mandated by law. Wages, benefits and working conditions are determined through negotiations between employers and trade unions. 67% of Danish wage-earners are members of a union, compared to 19% in Germany and 8% in France. Strikes and lockouts are common, and the government will usually stay out of labor conflicts unless the parties are unable to agree.

It is uncomplicated for enterprises to fire workers, which gives them great flexibility to adapt to shifting market conditions. To alleviate the pain, the state has in place a number of arrangements such as generous unemployment benefits and programs to retrain and upgrade redundant workers.

Danish companies must make ends meet or perish. They generally will not get handouts from the government.

Denmark is more free-market oriented than the US. According to the Heritage Foundation’s 2018 Index of Economic Freedom, Denmark is number 12, ahead of the United States (number 18). Venezuela is at the bottom, one place ahead of number 180, North Korea.

Mads Lundby Hansen, chief economist of Denmark’s respected pro-free-market think tank CEPOS, comments:

“Very high taxes and the vast public sector clearly detract in the capitalism index and reduce economic freedom. But Denmark compensates by protecting property rights, by low corruption, relatively little regulation of private enterprise, open foreign trade, healthy public finances and more. This high degree of economic freedom is among the reasons for Denmark’s relatively high affluence.”
Trish Regan recently claimed on Fox Business that Danes pay a “federal tax rate” of 56% on their income. This is misleading. The 55.8% is the levied on the marginaltax for the top income bracket, only on the part of their income above DKK 498,900 ($76,500). Any income under DKK 498,900 is taxed at lower rates. And the 55.8% marginal rate does not represent a “federal” or “national” rate. It represents the total of all taxes on income: national tax, regional tax, municipal tax and labor market tax. It does not, however, include Denmark’s 25% value-added tax (VAT), paid on all purchases.

Regan also claimed that Danes pay a 180% tax on cars. While it is true that there was once a maximum tax of 180% on care in Denmark, the vehicle tax rates have been lowered in recent years. Today, the first DKK 185,100 ($28,400) of the price of a gas- or diesel-powered car is taxed at 85%, and if the car’s price is above DKK 185,100, the remaining amount is taxed at 150% — which is of course bad enough.

Denmark’s total tax burden amounts to 45.9% of GDP, the highest of all countries in the Organisation for Economic Co-operation and Development (OECD).

As pointed out in the Fox Business segment, all education for Danes is tuition-free, all the way through to a Ph.D. Not only that; the state will, within certain time constraints, pay students to study. For students at university level no longer living with their parents, the monthly cash grant comes to almost $1,000 per month. No fewer than 325,000 students out of a total population of 5.6 million benefit from this generous arrangement setting the state back to the tune of DKK 20.9 billion or 1% of GDP (latest 2018 figures just in and supplied by Mads Lundby Hansen). Denmark even pays student support to 20,000 foreign students.

Attempts by fiscal conservatives to cut down on payments to students have been successfully resisted by the vociferous and influential student organizations; at present it would appear impossible to muster anything like a parliamentary majority to limit the student handouts.

Fox Business is right that a great many Danes are on public transfer payments. Government figures from 2017 indicate that 712,300 Danes of working age (16-64) — not including recipients of student benefits — get public financial support. But Regan’s claim that most Danes do not work is ludicrous. According to Statistics Denmark, 69.9% of Danes aged 16-64 are active in the labor market.

How can Denmark pay for its comprehensive welfare state, which includes free medical care regardless of the severity of your condition? Regan claims that Denmark is “heavily in debt.” Not so. As it turns out, Denmark is among the least indebted countries in the world, even when compared to other Western countries. The Danish government’s gross debt stands at 35.9% of GDP. Compare that to, e.g., The United Kingdom (86.3 %), The United States (108%), Belgium (101%), Canada (86.6%), France (96.3%), Germany (59.8%), The Netherlands (53.5%), Italy (129.7%), Spain (96.7%) and even Switzerland (41.9%).

Comparing Denmark to the US, Madsen notes that the latter has a problem with fiscal sustainability that may necessitate tax increases. Denmark enjoys what he labels fiscal “oversustainability” (“overholdbarhed”).

At a time when socialism appears to be popular among certain sections of the American population, its proponents would do well not to cite Denmark as a model. The Danish fusion of free-market capitalism and a comprehensive welfare state has worked because Denmark is a small country with a very homogeneous population. This economic and social model rests on more than 150 years of political, social and economic compromises between peasants and landowners, business-owners and workers, and right- and left-leaning political parties. This has led to a measure of social and political stability that would be hard to emulate in much larger and more diverse counties such as the United States.


Lars Hedegaard, President of the Danish Free Speech Society, is based in Denmark.

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Ron Paul: Protectionism Abroad and Socialism at Home

One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians.

Ron Paul

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Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity:


One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians. For example, government interference in health care increased health care costs, making it difficult or even impossible for many to obtain affordable, quality care. The effects of these prior interventions were used to justify Obamacare.

Now, the failures of Obamacare are being used to justify further government intervention in health care. This does not just include the renewed push for socialized medicine. It also includes supporting new laws mandating price transparency. The lack of transparency in health care pricing is a direct result of government policies encouraging overreliance on third-party payers.

This phenomenon is also observed in foreign policy. American military interventions result in blowback that is used to justify more military intervention. The result is an ever-expanding warfare state and curtailments on our liberty in the name of security.

Another example of this is related to the reaction to President Trump’s tariffs. Many of America’s leading trading partners have imposed “retaliatory” tariffs on US goods. Many of these tariffs target agriculture exports. These tariffs could be devastating for American farmers, since exports compose as much as 20 percent of the average farmer’s income.

President Trump has responded to the hardships imposed on farmers by these retaliatory tariffs with a 12 billion dollars farm bailout program. The program has three elements: direct payments to farmers, use of federal funds to buy surplus crops and distribute them to food banks and nutrition programs, and a new federal effort to promote American agriculture overseas.

This program will not fix the problems caused by Tramp’s tariffs. For one thing, the payments are unlikely to equal the money farmers will lose from this trade war. Also, government marketing programs benefit large agribusiness but do nothing to help small farmers. In fact, by giving another advantage to large agribusiness, the program may make it more difficult for small farmers to compete in the global marketplace.

Distributing surplus food to programs serving the needy may seem like a worthwhile use of government funds. However, the federal government has neither constitutional nor moral authority to use money taken by force from taxpayers for charitable purposes. Government-funded welfare programs also crowd out much more effective and compassionate private efforts. Of course, if government regulations such as the minimum wage and occupational licensing did not destroy job opportunities, government farm programs did not increase food prices, and the Federal Reserve’s inflationary policies did not continuously erode purchasing power, the demand for food aid would be much less. By increasing spending and debt, the agriculture bailout will do much more to create poverty than to help the needy.

Agriculture is hardly the only industry suffering from the new trade war. Industries — such as automobile manufacturing — that depend on imports for affordable materials are suffering along with American exporters. AFL-CIO President Richard Trumka (who supports tariffs) has called for bailouts of industries negatively impacted by tariffs. He is likely to be joined in his advocacy by crony capitalists seeking another government handout.

More bailouts will only add to the trade war’s economic damage by increasing government spending and hastening the welfare–warfare state’s collapse and the rejection of the dollar’s world reserve currency status. Instead of trying to fix tariffs-caused damage through more corporate welfare, President Trump and Congress should pursue a policy of free markets and free trade for all and bailouts for none.

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