50 Ways Trump Is Wrong on Trade

MEMO Published April 7, 2016 • 16 minute read 50 Ways Trump Is Wrong on Trade Gabe Horwitz Donald Trump is a businessman, a billionaire, and a Vice President for the Economic Program globetrotter with nancial interests currently in Turkey, @HorwitzGabe Panama, South Korea, Canada, Philippines, India, Uruguay, Jay Chittooran Brazil, Ireland, Scotland, and the United Arab Emirates, Policy Advisor, Economic 1 Program according to his website. So how could someone with that breadth of global experience be so wrong on trade? Donald Trump is one of America’s loudest voices in opposition to trade generally and to the Trans-Pacic Partnership (TPP), which is his prerogative as a candidate for President. He has leveled bombastic accusations about TPP and other U.S. trade deals; of course, he levels bombastic accusations nearly every day on a host of issues. Of course, the sheer size of TPP —nearly 40% of global GDP— calls for robust debate and analysis. Third Way supports TPP as a way to open U.S. markets, write the rules of commerce in Asia (instead of China), and dramatically increase Made in America exports to the world’s most important growing market. We see this agreement as an essential component of restoring the basic American bargain of economic growth that benets the middle class and those aspiring to join it. Others, including Trump, view TPP dierently, and that debate has been passionate. But unlike most issue areas in this presidential race, Donald Trump has actually proposed a specic trade policy in place of TPP—a 45% tax on imports coming from China, a 35% tax on many imports from Mexico, and a 20% tax on imports from other countries. 2 “I would do a tax. And the tax, let me tell you what the “tax should be … the tax should be 45 percent [on Chinese imports].” 3 –Donald Trump, January 2016 ” It seemed to us that with this proposal, Trump departed the area of reasoned policy discussion and entered a land of scal fantasy. Then we looked at what others are saying about Trump’s tari plan. In an eort to be fair, we tried to nd academics, business leaders, and economists in favor of the plan. It wasn’t easy. Republican Congressman Chris Collins of New York said the taris would raise prices on consumer products up to 15%, but this would ultimately benet the economy because “the United States needs some level of ination.” 4 Ian Welsh, former managing director of the now-defunct leftwing blog Firedoglake, said that “what Trump wants to do is to use taris to return production to the United States.” 5 These are among the very few who think Trump’s proposed taris would be benecial. What follows are 50 leading experts, publications, and outlets that have come out in opposition to Trump’s views on trade. Their voices—from Baton Rouge to San Francisco, from liberal columnist Paul Krugman to Chamber of Commerce President Tom Donohue—debunk and rebuke Trump on trade. They warn of a stock market collapse, a new recession on par with the Great Recession, massive job losses, rampant ination, and a ballooning trade decit. North, south, east, west, left, right agree—protectionism is dangerous. Below we summarize the recent and growing consensus among leading publications, fact checkers, notable columnists, industry leaders and economic experts, and think tanks. Leading Publications 1. Baton Rouge Advocate Editorial: Donald Trump’s trade policy would result in “stock markets around the world… in a free-fall and American trade partners around the world in a tizzy. The notion that both parties might draw back from good business deals with foreign trading partners ought to be a matter of real concern.” (March 23, 2016) 2. Bloomberg View Editorial: “An outright retreat from liberal trade would be far worse—and a retreat as dramatic as Trump's proposal would be disastrous. Imposing high taris (and coping with the barriers raised by other countries in retaliation) would involve huge disruptions in the short term, for both suppliers and workers. The smart case for free trade is the best answer to the new protectionism.” (March 28, 2016) 3. Crain’s Detroit Business Editorial: “Donald Trump has made free trade the fall guy in this year's presidential election. Tapping the angst and nancial insecurity of voters has catapulted him to the head of the Republican pack. But if you want to blame job losses on something or somebody, pick technology. (March 20, 2016) 4. Detroit News Editorial: “But taris, taxes and the ght against free trade would raise prices across the board on consumer goods, without boosting employment or incomes…as for the TPP, its passage is vital to maintaining America’s inuence in a region where China is increasingly asserting itself…But the protectionist policies being discussed on the campaign trail risk throwing America into recession. As a manufacturing state heavily dependent on the export of goods, Michigan can’t aord measures that choke o trade.” (March 9, 2016) 5. Los Angeles Times Editorial: “Globalization isn't a product of trade deals, it's a product of developing economies becoming more connected commercially to the developed world by technology and other forces. That's why the U.S. focus as it negotiates these pacts is shifting from reducing taris to other factors that aect the cost of doing business in a country. But to categorically oppose trade deals is to say that the U.S. shouldn't try to bring the rest of the world up to the labor, environmental and commercial standards that apply here. That's a losing strategy.” (March 10, 2016) 6. New Jersey Star-Ledger Editorial: “A sampling of [Trump’s] whoppers: Claiming that the United States has a ‘$500 billion a year trade decit with China’ (it doesn't). Trump also said the U.S. doesn't export anything to Japan (we exported $62 billion worth of goods last year), & that we don't win at trade (we had trade surpluses with a number of countries).” (March 21, 2016) 7. San Francisco Chronicle Editorial: “But the protectionist shouts from Democrat Bernie Sanders and Republican Donald Trump are hollow and shortsighted, nothing close to sensible economics….free trade remains a way to lift the economy.” (March 10, 2016) 8. USA Today Editorial: “Trade produces more aordable merchandise and more variety, a godsend for consumers struggling to make ends meet. It is also responsible for signicant amounts of employment: 11.7 million people in America work in export-related industries. And protectionist measures, such as the huge taris that Trump tosses around, would ignite trade wars that would do far more economic harm than good.” (March 10, 2016) 9. Wall Street Journal Editorial: “The best way to boost American exports is to remove trade barriers with new trade agreements. Mr. Trump claims that as President he would make smarter and ‘fairer’ trade deals. He could help persuade voters by showing that he knows more than nothing about foreign trade.” (March 11, 2016) 10. Washington Post Editorial: “His proposed tari on Chinese imports could spark a trade war and global depression.” (March 16, 2016) 11. Washington Post Editorial: “Blaming freer trade for the loss of manufacturing jobs fails to tell the much bigger story of economic transformation that has swept the world over the past several decades. [Free trade] pulls foreign trading partners out of poverty. It helps U.S. exporters, who account for an increasingly large share of American output. It enriches U.S. consumers, who get cheaper goods and greater selection.” (March 10, 2016) Fact Checkers 1. Amy Sherman, PolitiFact: “However, Trump’s overall message here is misleading because he suggests that the size of the trade decit is proof that Mexico could pay for the wall. In reality, the trade decit has nothing to do with whether the Mexican government could aord to write the United States a check to build the wall. We rate this statement False.” (January 26, 2016) 2. Clayton Youngman, PolitiFact: “To Trump’s assertion that the trade deal was designed for China’s benet, experts say it’s actually the opposite…the TPP does allow the United States to shape trade practices in the Pacic before China can.” (November 12, 2015) 3. FactCheck.org: “Trump grossly exaggerated the U.S. trade decit with China, and falsely claimed that the U.S. runs a trade decit with ‘every country.’” (March 4, 2016) 4. Glenn Kessler, Washington Post: “Trump’s claims on trade, currency manipulation and manufacturing are either wrong or no longer valid.” (March 18, 2016) 5. Politico “Wrongometer”: “Donald Trump criticized the lack of rules on currency manipulation in the Trans Pacic Partnership trade deal. ‘They don't even discuss it in this trade agreement,’ he said. But the 12 countries involved in the TPP actually signed a separate ‘joint declaration’ to deter currency manipulation—not technically part of the deal, but released alongside the TPP.” (November 10, 2015) Notable Columnists 1. David Ignatius, Washington Post: “Of the many dangerous trends in the 2016 election, the revolt against free trade that has captured both parties could do the most long-term damage. That’s because protectionism would undermine future growth of the U.S. economy and subvert the nation’s role as global leader.” (March 18, 2016) 2. Doyle McManus, Los Angeles Times: “[Trump] wants to slap taris on goods imported from China and Mexico, which would almost surely set o an expensive trade war.” (March 14, 2016) 3. Paul Krugman, New York Times: “And anyone ragging on about those past deals, like Mr. Trump or Mr.

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