Monday, January 25, 2016

U.S.-China trade: National Review is the 'Buffoon,' not Trump - By Howard Richman & Raymond Richman

In one of National Review’s hit pieces against Republican presidential frontrunner Donald Trump (“What Trump Doesn’t Understand – It’s a lot about our Trade with China”), correspondent Kevin D. Williamson called Trump a “dangerous buffoon” because he would threaten tariffs upon China’s products and thus risk a trade war with China.  But it’s not Trump who is the buffoon on trade; it is National Review!
Trump plans to take on the huge U.S. trade deficit with the world, and especially with China.  He threatens to place upon Chinese products a tariff like the 45% tariff that China recently placed upon some U.S. cars.  Such a threat could lead to negotiations between the U.S. and China about balancing trade, and Trump wrote the book on negotiations………..

The purpose of trade is to exchange an amount of goods and services that a country considers less valuable for an amount of goods and services that it considers more valuable.  Economists are unanimous that both countries benefit when trade is balanced.
But the trade deficits that the U.S. has experienced for decades have converted the U.S. from the world’s leading creditor nation to the world’s leading debtor and have caused the loss of millions of American manufacturing jobs, have reduced American power, and have retarded U.S. economic growth.
Williamson and National Review would let totalitarian China continue to expand its trade surplus with the United States and eventually replace the U.S. as the world’s premier economic and political power.  They consider their position “conservative.”
But Trump is right to seek balanced trade with China.  He could get the negotiations going by threatening to impose our Scaled Tariff.  And if the negotiations were to fail, the Scaled Tariff would balance trade regardless.