Donald Trump is now the 45th president of the United States, inaugurated amidst considerable controversy and resistance. As the first 100 days of his presidency progress, I will personally continue to follow fervently and break down each of his decisions. To begin with, let’s discuss trade.
Free trade is inherently good. When another nation has a comparative advantage over the United States in producing a good or providing a service, it is in our best interest to trade with it. The same ideal applies on an interstate level. For example, Nebraska produces corn to trade with California for its grapes. The U.S. produces steel in cities like Pittsburgh, Pennsylvania and trades with the Japanese for cars made in their homeland. The laissez-faire idea of free trade and a capitalistic marketplace encouraging competition are healthy and advantageous to all interests.
On free trade, Trump signed an executive order four days into his presidency that may seem to be in conflict with the fiscally conservative and classically liberal ideals stumped in the previous paragraph. The executive order officially withdrew the U.S. from the Trans-Pacific Partnership, a trade agreement drafted in 2015 with 11 Pacific Rim nations. However, there are a plethora of issues with the TPP, which I view as a poorly negotiated deal that is unfair to American workers.
One of the largest issues with this trade deal is the opportunity for member nations to manipulate their currencies due to the TPP’s poorly written global trade rules. Currency manipulation by countries in the TPP has already allowed many U.S. jobs to move overseas as foreign governments impose taxes on U.S. exports while shipping cheap goods into the U.S. According to the Economic Policy Institute, 2,025,800 total jobs were lost due to a $177.9 billion U.S. trade deficit with TPP countries in 2015, largely due to currency manipulation. The U.S. trade deficit with TPP countries directly harms the total employment in trade industries.
In simpler terms, the U.S. must renegotiate lackluster deals such as the TPP to ensure we have a say in the global trade agreements, rather than large, international trade commissions making decisions that we do not have an opportunity to veto. The TPP’s global trade rules leaves an open door for nations to continue currency manipulation.
The TPP would even restrict free trade in its truest meaning. Under the TPP, American goods would be restricted from being openly traded in foreign markets. The TPP would especially harm the farming and steel sectors. The farming sector relies heavily on exported goods, and the TPP would imperil this. The success of farmers — a large portion of American families — would be at risk, especially in trade with protectionist nations. Furthermore, the steel industry would be directly threatened as the TPP would allow foreign countries to lower tariffs on foreign cars while increasing tariffs on U.S.-manufactured cars sold in foreign markets.
Despite the seemingly protectionist stance taken by the Trump administration, I am optimistic that fair free trade deals will be pursued under U.S. trade representative nominee Robert Lighthizer and stronger negotiations will take place with our foreign counterparts. As Trump stated in late 2015, “I am all for free trade, but it’s got to be fair.” Rather than continuing to function under the faulty multilateral trade deals currently in place, the Trump administration has pledged to produce “fair bilateral trade deals.”
But as a traditional, free market-supporting conservative, I do have concerns regarding Trump’s pick for trade representative. Lighthizer has had protectionist leanings in the past, despite working in the Reagan administration as deputy trade representative. He also previously praised the success of protectionism in guarding American industry from the powerhouses of European mercantilism in the 18th century. In a 2011 op-ed discussing Trump’s failed 2012 presidential bid, Lighthizer posed questions to fellow conservatives such as, “how does allowing China to constantly rig trade in its favor advance the core conservative goal of making markets more efficient?”
I am open-minded toward Lighthizer’s outlook on trade, and I will closely observe his actions as trade representative with fervent hopes and optimism that Americans will trade under fairer, less regulated deals during the Trump administration’s time in Washington.
The Trump administration must renegotiate trade deals and explore options that would instill economic growth and job creation in the U.S. Opposing the TPP is supporting American freedom and free enterprise, and I applaud Trump’s decision to formally withdraw the U.S. from this awfully negotiated trade deal that would be unfair and detrimental to the average American.
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