Candidate Trump appears to be refocusing on one of the top issues that won over blue-collar America and propelled him to the White House in 2016: Trade.
Speaking in Wolfeboro, New Hampshire, this week, Donald Trump, the front-runner for the Republican presidential nomination, said that if he returns to the White House he will enact tariffs on all foreign imports with the aim of protecting the jobs and wages of American citizens.
“To protect New Hampshire workers and families, I will impose an across-the-board tariff on foreign-made goods,” he told the crowd, as reported by Breitbart News.
The 45th president added, “I will also pass the Trump Reciprocal Trade Act. If China or any other country makes us pay a 100 or 200 percent tariff, we will make them pay a reciprocal tariff of 100 or 200 percent right back. And as taxes on foreign countries go up, taxes on American workers, families, and small businesses will come down, and down dramatically.”
Representative Sean Duffy’s (R-Wis.) Reciprocal Trade Act would allow the president to impose tariffs on a product-by-product basis. The legislation would empower the president to act if the rate of duties impose on U.S. products by another country is “significantly higher” than the U.S. rate on that nation’s products, or if the country in question has non-tariff barriers in place that place a significantly higher burden on American products.
The Reciprocal Trade Act is opposed by the U.S. Chamber of Commerce, which in 2019 fought to keep it from being introduced in Congress.
As Breitbart notes, the Republican base, partly due to Trump’s influence, has increasingly walked away from what was once a party dogma on the issue of free trade:
Free trade, despite having many Republicans’ backing, is increasingly opposed by the majority of GOP voters. A New York Times/Siena College poll from July found that nearly 7 in 10 GOP presidential primary voters said the U.S. has “lost out from increased trade because it has cost jobs.”
Opposition to free trade is even higher among white working class GOP voters, who said by a 73 percent majority that increased trade costs American jobs while 70 percent of non-college-educated, non-white working class GOP voters said the same.
According to a study by the non-profit organization Coalition for a Prosperous America (CPA), which represents manufacturers, workers, and farmers, a 15-percent tariff on foreign imports, along with 35-percent tariffs on products in vital supply chains, would generate approximately 10 million jobs and more than $600 billion.
The New American has explained the far-reaching effects free trade can have on a nation’s economy, particularly when factors such as fiat currency and inflation are taken into account:
Of the 21 countries that caused hyperinflation of their currencies, 17 were running trade deficits at the time their currencies imploded.
… A currency hyperinflates when producers in a country can’t produce enough goods — create enough wealth — to pay for government services, and the government decides to print money to pay for its employees and services. When people both at home and abroad realize that the currency produced by a country far outstrips the value of the saleable goods available in that country, price inflation runs rampant, and if enough money is printed, the currency can lose value rapidly, becoming virtually worthless. It is a truism that if a country purchased all goods from abroad, a country’s currency would quickly devalue, providing a tie between trade deficits and currency crashes.
Moreover, a phenomenon often seen in third-world economies takes place in developed nations such as the United States with just as much devastation.
This is the case in which Third World countries open themselves to imports (including recycled clothing donated from First World nations) that are cheaper than they would be if made by fledgling local manufacturers. The local industries are then overwhelmed and unable to compete with the cheap goods from more sophisticated manufacturers abroad. As a result, the receiving nation ends up having few jobs and even losing the ones they had when local industry is no longer able to compete with its foreign counterpart.
As a result, the people continue to live in poor, third-world conditions as their economy is unable to develop its own sophisticated industries. The people must then settle for low-paying jobs, often for foreign firms eager to exploit cheap labor abroad. In one example, Garth Frazer of the University of Toronto estimates that increased used-clothing imports accounted for about half of the decline in apparel industry employment in Africa between 1981 and 2000.
The same thing has been happening in the United States, as the flow of cheap products from other countries (particularly China) that use protectionism against American goods even while the United States allows their products in with few barriers has been a factor in the dismantling of American manufacturing, with the resultant widespread job loss.
