Donald Trump is going to make America great again. But you already knew that.
The question many voters have, is how exactly he plans to do it. The frontrunner has thrown some rather vague ideas out there, some of which focus on trade. Everyone has by now heard the ‘Trump stump’: ‘We don’t win anymore. We’re getting killed on trade. We make terrible deals. We’re losing to China.’
Trump’s solution – at least as it relates to China and Mexico – is to impose tariffs. Specifically, he’s suggested he would slap a 35% import tax on goods from Mexico and a 45% tax on goods from China.
As The New York Times noted earlier this month, Trump’s trade policy is a throwback to the mercantilism of a bygone era. It’s a simplistic way of looking at trade wherein running a deficit is equivalent to running a money losing company.
Of course to call it simplistic isn’t necessarily to call it misguided or completely wrong. The US manufacturing sector has been gutted. It’s one thing to build a services-driven economy wherein consumer spending accounts for the majority of economic output. It’s another entirely to create a kind of feudal society wherein the labor market becomes a waiter and bartender creation machine that exists to serve the 1% and in which breadwinner jobs all but vanish along with the country’s capacity to actually produce anything tangible.
This post was published at Zero Hedge on 03/19/2016 –.
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