The backdrop for Donald Trump’s trade speech Tuesday was a scrap heap. This was appropriate, for his protectionist ideas are ones that the United States scrapped long ago and should avoid recycling.
What might be said in Trump’s defense is that he may actually believe what he was saying, unlike Hillary Clinton, who has affected an antipathy to free trade just as dangerous as Trump’s, but has done so dishonestly, just to woo the massed ranks of left-wingers who are feeling the Bern and whose votes she needs in November.
Trump’s trade speech in Pittsburgh was an important enough address that he delivered it with teleprompters to keep himself on point. It nevertheless contained so many false statements and protectionist nostrums that it’s hard to know where to begin in criticizing it.
Nearly every assertion and assumption he made about the economy, manufacturing and current free trade agreements was wrong. And so, therefore, are his prescriptions for making America great again.
For example: “When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians do nothing,” Trump said.
If only this were true! Far from doing nothing, politicians, including President Obama as recently as March, have reacted just as Trump would seem to want. Over and over again, they have imposed and reimposed quotas, imposed and raised steel tariffs.
And guess what? These short-sighted actions have protected a relative handful of steelworkers’ jobs at the expense of workers in all other manufacturing industries that buy and use steel, such as the automotive industry.
Trump, who once correctly extolled the potential of offshoring some jobs to create others in America, added that “our politicians have aggressively pursued a policy of globalization, moving our jobs, our wealth and our factories to Mexico and overseas.”
This foundational assumption that both parties use in their anti-trade rhetoric ignores the data from the last 50 years of manufacturing. It’s not true that manufacturing has gone elsewhere. Yes, American manufacturing employment has fallen by more than one third since 1965. But the total value of goods produced by American manufacturers has more than tripled during that time, and has more than doubled since 1986 despite three big recessions. What Trump is really railing against is the efficiency of American manufacturers, not their “betrayal” in sending some jobs abroad.
Trump also excoriated NAFTA, the free trade agreement that has quintupled American exports to Mexico in real terms since it was signed in 1993. That has put an awful lot of Americans to work. Trump blames NAFTA for closing 50,000 factories, and you wouldn’t know it from his rhetoric that America actually runs a manufacturing trade surplus within NAFTA, and an overall trade surplus if oil imports are excluded.
Trump also cited Brexit, the British vote last week to leave the European Union. Many Americans mistakenly interpret that referendum result as a repudiation of open markets. But again, Trump has it almost exactly backwards. In exit polls, only 6 percent of British Leave voters cited trade as their motivation, far less than those citing sovereignty, immigration and the potential future expansion of EU powers. No one in Britain is surprised, or should be surprised, now to see Brexit leaders push for continued open trade with the EU, and for stronger ties to other markets that EU protectionism had closed to them. That is what most Brexit leaders campaigned for and most Brexit voters wanted.
As much applause as Trump may get from lines about “American steel” rebuilding America, and “economic independence,” outdated ideas about national self-sufficiency will never make America great again. The people of this country will be much poorer, have fewer jobs and pay far more for the staples of everyday life if they follow his path of protectionism.
Over the last five decades, free trade has allowed Americans to buy more for each hour they work than they otherwise could have. The economic solution needed is one that neither major party’s candidate is suggesting: America should open its doors, seek every new opportunity for freer trade (for example, with Great Britain), and have faith in its workers and businesses to compete with the world as well as they always have.
