Free trade has been misunderstood for over 30 years. President Trump has a message to all of America’s trading partners: either embrace free trade or reciprocal trade (tariffs). People think that President Trump is an anti-trader, but that’s untrue. He is a free trader who is sticking up for American workers.
He is not putting tariffs on foreign goods to give the U.S. an advantage; he is trying to level the economic playing field. This is a result of the current tariffs and hindrances that American trading partners level on our goods. Following WWII and through the Cold War, it was in the best interest of the U.S. government to help our allies and trading partners develop stronger economies.
However, the United States can now correct various trade imbalances by imposing tariffs on our trading partners.
NAFTA is one policy that President Trump wants to renegotiate. The purpose of NAFTA was to promote economic growth between Mexico, Canada, and the U.S. Ambassador Lighthizer stated that 700,000 American jobs have been moved to Mexico and about 60% of those jobs were in manufacturing. American companies produce goods in Mexico cheaply and sell them back into the U.S. for a larger profit. President Trump does not support this.
In January 2018, the President announced his decision to provide safeguard relief to U.S. manufacturers injured by surging imports of washing machines and solar products. Following the decision, Whirlpool announced 200 new jobs in Ohio. NAFTA did increase trade between Mexico, Canada, and the U.S., however winners and losers have resulted because of this deal. American steel and aluminum industries experienced difficulties with foreign trade agreements.
President Trump enforced a 25% tariff on imported steel and a 10% tariff on imported aluminum from Canada, Mexico, and the E.U. Canada understands their unfair “free trade deals” with the U.S., so Prime Minister Trudeau imposed $12.8 billion retaliatory tariffs on U.S. goods. Canada, Mexico, and the E.U. understand their unfair trade practices against the U.S. The U.S. must create a platform for trading partners to drop their unfair trade practices against the U.S. by President Trump leveraging similar or higher tariffs on them. Canada imposes over a 270 percent import tariff on United States dairy products. Canadian farmers are desperate to keep their advantage over American dairy farmers. President Trump expressed his frustration over this barrier and said that it must be fixed.
President Trump should impose tariffs to retaliate against the 270 percent import tariff to protect American dairy farmers. If the U.S. does not stick up for itself against Canada or other trading partners, this unfair “free trade” will continue.
The Trans-Pacific Partnership (TPP) is another example of a trade deal that President Trump did not support. According to the White House, “The deal negotiated by the past Administration did not sufficiently prioritize the needs of the American workforce.” President Trump prefers to negotiate with trading partners individually. The U.S. being a part of the TPP could be another NAFTA situation. American manufacturing jobs can be lost overseas to countries such as Vietnam or Malaysia.
The European Union subsiding airlines is a prime example of foreign countries trying to have an unfair advantage over the United States. In September 2017, the WTO rejected the EU’s allegations that Boeing was receiving prohibited subsidies. The E.U. subsidized Airbus airplanes with $22 billion in state aid. The European Union capitalized on giving Airbus an unfair advantage in order to best Boeing.
In the short term, tariffs increase the cost of goods for American consumers. However, in the long term, tariffs catalyze foreign governments to reassess their own practices. Previous presidents have looked the other way. President Trump is taking a different path. When President Trump or other cabinet members attended economic conferences, such as the G7, G20, or APEC, they addressed unfair trade practices and promoted fair and reciprocal trade.
President Trump stated at the G7: “The United States has been taken advantage of for decades and decades,” he continued, describing America as a “piggy bank that everyone keeps robbing.” In July, President Trump and European Commission President Jean-Claude Juncker met to discuss dropping trade barriers. Juncker declared he “had the intention to make a deal today and we made a deal today.” President Trump said the U.S. and the EU work to fix tariff issues, explaining it is “a new phase in the relationship… a very big day for free and fair trade.”
The United States message on under President Trump is clear. Embrace free trade or reciprocal trade or be prepared for billion dollars in tariffs. President Trump is a free-trader who wants to protect American workers and stop unfair trade policies.
The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.