I said there was no way Trump would last through the early primaries. I belittled the prospect of Trump even attending the convention, much less accepting the Republican nomination. And I was cavalier in my certainty that Trump would be making a concession speech early Tuesday night. In other words, by Washington’s standards, I have established credibility on the subject.
So you should feel reassured that I am less bearish about the direction of President Trump’s trade policy than I probably should be given candidate Trump’s bellicose campaign rhetoric.
The trade policies Trump outlined in broad strokes on the campaign trail would – to put it mildly – devastate the economy. For example, Trump has said he would:
- impose duties on 35 percent on imports from Mexico and 45 percent on imports from China;
- impose special taxes on U.S. companies that incorporate foreign components or labor into their production or assembly operations;
- tear up the North American Free Trade Agreement – or at least renegotiate what he calls “the worst trade deal ever negotiated,” and abandon the Trans-Pacific Partnership, which he calls a “rape of our country”;
- declare China a currency manipulator and impose countervailing duties to mitigate the export price advantages that practice allegedly bestows;
- use tax policy, protectionism, and the threat of more protectionism to compel China, Mexico, and all of the other countries with whom the United States runs bilateral trade deficits to buy more from U.S. producers and sell less to U.S. consumers in order to achieve a state of balanced trade;
- tax manufacturing companies that lay off workers.
The list of angry, knee-jerk, foolish ideas goes on and on. If you take candidate Trump at his word, U.S. trade policy is going to be an unmitigated disaster.