One thing that businessman, and 2016 Republican candidate for president Donald Trump speaks a lot about at his campaign stops, is the need to have a system of trade where all sides win, and take down the current trade agreements. Trump laments the loss of our manufacturing sector, and has a plan to reverse the trade deficit sickness that presently infects the United States in international trade.
President Bill Clinton signed into law the North American Free Trade Agreement (NAFTA), establishing rules for commerce, and an enforcement regime that includes independent panels of experts who review trade regulations for fairness between Canada, Mexico, and the United States.
With such a porous border between Mexico and the United States, illegal immigrants are the smallest of the real problems that such a weak border creates. Merchandise is shipped into the U.S. over land, underground, and over existing fences, creating a thriving black market in goods of all kinds, from legal to the illegal. Ordinary store merchandise, illegal immigrants, drugs, and weapons worth in the billions of dollars pass from Mexico to the United States with no customs duties, and no oversight. From the American side, the number one item smuggled out of the United States is our money, U.S. currency; followed in a close second by weapons.
This list of imports above does not even include the tremendous amount of machinery, vehicles, appliances, and so many other goods that are produced in Mexico, to the tune of a $53 billion dollar trade defict the U.S. has with Mexico right now. The U.S. also has a significant trade deficit with our other trading partner Canada, the other country that is a signatory to NAFTA.
Entire industries and production facilities have been dismantled and shipped abroad, along with the jobs that used to belong to Americans. This has all happened with a wink and a nod by our legislators in Congress. The American people had no vote in the matter, and were thrown under the bus by Congress.
Today, you’ll find very few things on a store shelf that are actually produced in the United States. For example, at one time, tire manufacturers were producing out of Akron, Ohio more than half of the tires sold in the entire world. Today, there are more foreign made tires sold in the U.S. than those made in facilities located in the U.S. Now while the rubber worker in Akron sits idle, his competition overseas is collecting bonuses that used to be paid to rubber workers here; having lost his job to outsourcing, his unemployment benefits have most likely expired by this time, and if he is lucky, he might be able to find a job that pays half of what he earned at the tire factory.
From textiles to steel, from tires to automobiles, it seems that the only people benefitting from the current trade regime are the countries and citizens of Canada and Mexico. Ultimately, if we are going to bring back these industries and jobs, we are going to have to have a different trade agreement with Canada and Mexico, and it really does not matter if we have to negotiate these trade deals one at a time. Donald Trump has tapped into the anger that ordinary people have towards our existing trade agreements, and specifically NAFTA, and Trump has promised to bring several new things to the way that we do international trade.
- Even if your corporate headquarters for your company is located in the U.S., your company will pay a 35% customs tariff on all foreign made products; regardless of where they are made, or who they are created by, wishing to be permitted entry into the United States.
- Legal goods will be taxed entering our country (subject to current law), and anything illegal or not included on the list of importable goods will be subject to refusal or even seizure.
- Build a massive border barrier with both Canada and Mexico to slow and eventually eliminate the illegal transit of people and goods from either country.
- Trump’s motto is that if it is sold in the U.S., it should be, to the greatest extent, produced here in America.
- With more jobs comes more economy prosperity, which will drive our economy forward and reduce the number of people who have either lost their jobs or have been made chronically unemployed. Workers pay taxes and with more jobs, there are greater tax revenues and fewer people on the unemployment rolls, welfare, and other social safety net programs currently in place.
- A new agreement with China over trade that protects the manufacturing base and jobs of both countries is paramount to having a long lasting, more profitable trade agreement, along with a better overall relationship with China that covers almost every issue; political, militarily, or in trade with China. This will cause the Chinese to respect us more, and be more willing to cooperate with the United States to respond to crises around the world.
- A new agreement with Russia that includes trade, along with other items, is important to help the economies of both countries to improve and advance. We need to eliminate sanctions on Russia, and build a new era of glasnost, or openness, between our countries, working together to build a better world. Being able to coordinate military forces with Russia, and working together to create a unified force to help the United Nations is absolutely essential if we want to have a lasting piece with Russia.
Trump says that we can do much better in international trade than we are doing now because we have not been a strong country on trade. As Donald Trump describes it, right now, we lose in every trade deal negotiated since the 1970’s and the 1980’s. Given NAFTA is almost thirty years old, and eceonomic conditions in the United States are failing to improve sufficiently to achieve growth in our economy, it is time for a new deal with Mexico, and possibly Canada as well.
What Trump is saying about the U.S. not succeeding in trade and foreign affairs is the absolute, unfettered truth. For too long, the United States has gone along with what foreign powers want from us, but we have not protected our own interests. This is why it feels like we have no control whatsoever over our own economy. This makes for a dangerous situation for the United States.
Protecting our population includes protecting our food supply and our people through the strength of our leaders. It also includes protecting our border so that we don’t allow terrorists to walk into our country unchecked.
Now to the TPP, the Trans-Pacific Partnership; our newest trade deal currently being reviewed by Congress. Trump calls this deal, “bad for the United States, bad, bad, bad”. What he intends to do, should he be elected president, is to either scrap the deal or repeal it once he gets into office, and then have our negotiators explain to other countries that we have new trading rules. If foreign countries want to sell goods in America, and if American-based companies want to sell goods manufactered outside the U.S., then both will pay 35% in customs duties to be able to do so. Reciprocating, we agree to pay customs duties to be able to sell our goods to foreign countries.
From the farmland to the factory floor, from the tourist industry to our retail sector, it is time that made in America becomes the number one brand on products sold in commerce. As Donald Trump would say, “we used to be the greatest country in the world, but we aren’t right now, don’t you want to help make America great with me?”
Being forced to purchase so many things that are produced outside the United States has made our country vulnerable to economic war with hostile countries. In this regard, we have only been cheating and fooling ourselves. It’s much like having a job and waking up sick. For some of us, we have to be at work even if we feel under the weather, because some employers fire employees if they miss even one work shift.
Trump has a chance to undo what Bill and Hillary Clinton did when they created NAFTA; but the window to act is shortening rapidly. For jobs, for our economy, and for our safety and security, we must renegotiate NAFTA. The future of our great country depends on it.