President Donald Trump continues with his “America First”
campaign, announcing a move that is aimed at the tilted playing field on
international trade. Critics say Trump’s tariffs on steel and aluminum coming
into the country will usher in a trade war, and it will harm America.
However, the fact is that we are already in a trade war; we
have been it for many years; and we are losing it.
Most Americans probably don’t realize that we are in a trade
war because, first, they don’t really follow such things, and neither do the
major news media. Also, when a situation exists for a long enough time, it
becomes “normal.” That is the case with the uneven tariff situation with other
nations, and quite a few of them are our allies.
"We
cannot have free and open trade if some countries exploit the system at the
expense of others,” Trump told the World Economic Forum in Davos, Switzerland. “We
support free trade, but it needs to be fair and it needs to be reciprocal. Because,
in the end, unfair trade undermines us all."
“We cannot get our product in [to the European
Union], Trump said in a TV interview in late January. “It’s very, very tough.
And yet they send their product to us - no taxes, very little taxes. It’s very
unfair.” Germany was singled out as a particularly guilty nation.
Trump
points out how this has created America’s huge trade gap with foreign countries.
“In 2017, the U.S. trade gap leaped 12.1 percent to a nine-year high of $566
billion,” as reported by MarketWatch, which attributed the rise “to high oil prices and also to a
strengthening economy. When Americans are more prosperous, they tend to buy
more imported goods.”
“The latest statistics released on March 18 [2017] by the BEA
[Bureau of Economic Analysis] show that for every dollar that the United States
bought from China in 2009, the Chinese government only let its people buy 28
cents of American products,” reports idealtaxes.com. “Although the Chinese
economy was growing by 8.7 percent, the Chinese government managed to shrink
Chinese imports of American goods and services.”
The report states “China still maintains high duties on some
products that compete with sensitive domestic industries. For example, the
tariff on large motorcycles is 30 percent. Likewise, most video, digital video,
and audio recorders and players still face duties of approximately 30 percent.
Raisins face duties of 35 percent.” However, China did cut tariffs on a few minor
items last November.
Trump has also criticized China's currency manipulations,
which increase costs of American goods and services by 25 to 40 percent.
As The Washington
Times reported last December, “India is still using high tariffs and other
protectionist measures to keep U.S. manufacturing goods from entering its
domestic market.” The result: America has a $32 billion trade deficit with
India, the second largest country on Earth. The
Times concludes, “It’s a problem that the Trump administration needs to
address — and soon.”
Cars and electronics are largely the fuel for Japan’s $69
billion trade advantage, America’s second largest trade deficit, after China’s.
All told, eleven nations impose tariffs on America’s Harley-Davidson
motorcycles with engines over 800cc: India at 100 percent; China at 60 percent;
and Thailand at 30 percent. And the EU has had steep tariffs on U.S.
imports for years.
To all of that, add in that the tariffs Trump wants to
impose resulted from an investigation by the Department of Commerce that showed
that imports of both steel and aluminum are sufficiently high that they pose a
national security threat.
With those listed anti-American tariffs at work against us,
what do we do? Do we merely leave things be, and continue to have our economy and
Americans’ pocketbooks negatively affected? Or, do we try to fix the situation.
Trump is not one to merely look the other way under such
conditions, and has proposed tariffs that at this point exclude only Canada and
Mexico. This, of course, has attracted quite a lot of negative reaction.
So many people are obsessed with criticizing everything
Trump does or doesn’t do that they repeated fail in these efforts, and then
can’t resist advertising their failure. They don’t go the extra little bit. Instead
of instantly denigrating and ridiculing Trump, do a little work and see what he
is really doing below the surface.
Trump is a negotiator, and that is a major factor in how he
does things. He can propose a 50 percent tariff on a country or some products,
and then modify his terms if some accommodation is made, or maybe double down
if no accommodation is offered. Ultimately, the conclusion of this exercise will
usually be more moderate than the initial proposal, and actually will provide positive
change for our country. This is the nature of negotiation, and Trump is a
professional negotiator.
As for his many critics, why not just wait and see how the
situation evolves, instead of jumping at his first words to try and create the
most exciting and damaging comment about something that is just getting under
way?
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