Thread: What Trump Gets Right on Trade

What Trump Gets Right on Trade

By ALAN TONELSON
MARCH 2, 2017

WASHINGTON — Whatever confusion people might have about President Trump’s agenda, his position on trade and manufacturing is crystal clear. “I believe strongly in free trade, but it also has to be fair trade,” he said in his address to Congress Tuesday night. He called for corporate tax reform and export incentives, and he lashed out at Nafta and China for draining America’s manufacturing base.

Mr. Trump’s stance on trade is one of his most popular positions, but many economists and policy makers are skeptical: They say that rapid automation will negate any gains made in bringing manufacturing jobs back, while the tariffs and other policies he has suggested using will ignite disastrous trade wars.

The doubters are wrong on both points. American manufacturing’s most advanced sectors remain big employers, and much of their payroll shrinkage stems from predatory competition from high- and low-wage countries, as well as offshoring by American multinationals. And the trade-war alarmists overlook the matchless, yet overwhelmingly neglected, leverage America holds over the global economy.

Although cheap, labor-intensive goods often come to mind when Americans think of job-displacing imports, the more capital- and technology-intensive segments of manufacturing have hardly been immune. Sectors like motor vehicles and parts, pharmaceuticals, telecommunications equipment, nonelectrical machinery (like machine tools, farm machinery and power-generating turbines) and industrial chemicals add up to nearly half of manufacturing’s enormous, chronic annual trade deficits nowadays.

Such sectors still employ millions of Americans. For example, more than 947,900 jobs are currently found in automotive production (including 145,700 in the highest-value segments, like engines and powertrains and their parts), nearly 360,000 in semiconductor and related manufacturing, more than one million in machinery and more than 200,000 in pharmaceuticals. And a recent Commerce Department report indicates that in 2014 their trade shortfalls alone — leaving aside any impact from labor-saving technologies — cost more than 200,000 jobs, both in the industries themselves and throughout their American supply and logistics chains.

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Since then, moreover, trade deficits in advanced manufacturing have worsened, and the stagnation of productivity growth suggests that the robots have been replacing fewer workers. So trade-related job loss in these sectors surely has grown — and smart, pro-domestic manufacturing policies can bring them back.

As for trade-war alarmists, they apparently assume that the same countries that rely so heavily on exports to the United States for their growth, economic development and employment will unleash attacks on their biggest and best customer.

The United States is not only the world’s biggest single national economy, but for all its recent sluggishness, it has also generally been the fastest-growing major economy, and it is the most open to imports. That’s why it’s the single largest export market for a fifth of the world’s countries. That’s why it has remained the world’s largest consumer of foreign goods, despite slashing its previously huge purchases of foreign oil. That’s largely why each percentage point of new American growth lifts global growth by much more than similar expansion in China, and nearly as much as growth in the euro area — which unlike the United States is relatively poor in natural resources and needs to buy many more commodities from overseas. That’s also why nearly all leading countries and groupings — including the eurozone — have long-run trade surpluses with the United States.

The United States plays an even more central role in countries that have come into Mr. Trump’s trade crosshairs. Slow-growing Mexico, for example, would be performing much more sluggishly if it were not able to export the equivalent of 28 percent of its annual economic output to the United States. Its auto shipments to America alone are its biggest generator of foreign exchange reserves.

True, China’s economy is stronger and gradually becoming less export-dependent than Mexico’s, but its growth slowdown has been crucially contained by the $600 billion (by its own dubious count) global trade surplus it amassed last year — nearly half of which is run with the United States. Indeed, China’s sales to America constituted 4.4 percent of its annual economic output in 2015.

Further, the numbers don’t tell the whole story. After all, governments in institutionally weak countries like Mexico, or undemocratic countries like China, tend to stay in power by lifting national living standards. Losing unfettered access to the American market could undermine the leaderships in both countries.

It’s unclear which trade measures Mr. Trump will use to draw factories and their workers stateside. Nor has he announced domestic policies to aid these efforts. But the official manufacturing job and trade statistics make entirely obvious that the rewards to the American economy will be substantial. And as Mr. Trump’s speech on Tuesday made clear, America has a president who understands its ample power to reap them.

https://www.nytimes.com/2017/03/02/o...rade.html?_r=0

When are you going to deal with NAFTA, Mr. President?

If America passes the Tax Reform Bill to go in effect retroactively January 1, 2017, followed immediately by the FairTax to go into effect January 1, 2019, fixes this Obamacare mess, gets illegal aliens out of the country and off the welfare rolls, secures infrastructure spending, reduces legal immigration in huge numbers and ties new entrants to a merit-based system, corrects our bad trade deals and works on some new bilateral agreements, all with what he's already done or has in progress with reducing unnecessary regulations, this economy is going to go bonkers!

Americans deserve far better than waking up everyday to see what stupid, horrible, destructive, costly thing our government has done now. Trump can and will fix this in such a way that it will last hopefully forever so that future generations never have to watch both their parents and themselves stand in unemployment lines, such that when they shop instead of seeing 20 foreign labels to maybe 1 made in the USA label, they'll see 4 Made in the USA labels to maybe 1 foreign label, that when they get their bank statements, there's a savings account in addition to their checking account with some money in it, that when they go to work, they don't have to check to see if they paid the health insurance bill, because that's taken care of by their employer at work like it used to be, not by government mandate, but because our companies can afford it and want to provide this benefit to their employees so they don't have to worry about it which makes them better more focused workers, the way it used to be when 87% of our population had employer-provided health insurance like back in the 60's and 70's.

In order for employees to have the wonderful benefits of paid vacation, paid sick leave, company health insurance, and yes, some retirement either through pension funds or 401K accounts richly invested in by employers, our companies have to have huge earnings and net incomes to cover these big expenses. But they're willing to do that, because companies benefit from employees who are dedicated, motivated, secure and thus focused on their job, this results in better operations, better products, better sales and far less mistakes and liabilities. This is just the basic common sense of good business that every company and its shareholders want to see. That's why the stock market has responded so positively to the Trump Agenda to fix our economy. And we deserve it!

Americans deserve a country that when they wake up in the morning, they aren't preoccupied by suffering and loss caused by our government, they deserve to bounce out of the house rested, refreshed, eager to get to work, confident that their job will be there, and their pay and benefits not only cover a high standard of living but render enough to save and invest.

Americans deserve every dime of wage they're paid, they deserve every product and wish-list they can afford with good wages, and enough savings to pay for a vacation and Christmas with cash, not debt on credit cards.

For Americans to be living on the streets and in their cars in some parking lot at night, to be hunting down homeless shelters and food banks in church basements, for Americans to be standing on street corners with signs that say "need a job", for Americans to be losing their homes, being evicted from apartments, because they lost their job or lost their hours, it's just unbelievable. And these conditions haven't been a temporary situation, these millions of Americans have been out there living like this for 10 to 15 years.

For American parents to have to keep their children on their health insurance policy until they're 26 is JUST UNBELIEVABLE, because what that means is that by the time some are or should be old enough to be married, living in their own place and having some kids, they're still stuck at home in the same room they had with they were 10. No spouse, no home, no kids.

And people wonder why Americans aren't having kids as much as they used to? How can they? They can't even get married and move out of their parents house for crying out loud!! In some markets, not even if they have a college degree they worked their butts off for and their parents went in debt to pay for.

And what are the CORRUPT MEDIA and DEMOCRATS concerned about in the midst of all this? A white guy at a Walmart demanding an American Worker wait on him. Yes, of course they labelled him a racist, when that had nothing to do with it, he was attacking the foreign worker, knowing full well that there were millions of Americans who would fall over themselves to get a nice job at Walmart. Then they were on the Russian Conspiracy, hours today on that one, despite the fact that there is absolutely no evidence that Russia even hacked the DNC emails, let alone did so in some collusion with Paul Manafort, Carter Page, Jeff Sessions, Mike Flynn and Jared Kushner, even though Paul Manafort never met with a Russian, Carter Page only made a speech to a university in Moscow about business and economics, Jeff Sessions met with the Russian Ambassador about the Ukraine (and a cease-fire was agreed upon the following week), Mike Flynn's timely conversation with the Russian Ambassador during the transition stopped the expulsion of our diplomats from Russia, and who knows what great good Jared Kushner caused with his meeting at Trump Tower, probably support from Russia to help make peace in the Middle East between Israel and Palestine.

Despite the CORRUPT MEDIA and DEVIL DEMS, we're in for some really wonderful times everyone! Stay healthy, stay fit, stick around a long long time, we're going to see a renewal of our country that's not only going to line our pockets and fill our wallets, it's going to give US some of the best feelings we've had about our country and fellow Americans in our lifetimes, because we saved our country, the job unrealized by Americans through most of our lives, that we were actually born and raised to do: Kill the Enemy Within Before It Killed US.

We cut it a little close, if you ask me, but we're on our way and this job will be done.

Keep up the great work everyone!!