Dartmouth professor condemns President Trump’s trade policy
April 20, 2017
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One of the hallmarks of President Donald Trump’s campaign was his aggressive stance on the current state of US trade. Trump repeatedly criticized his opponent’s husband, President Bill Clinton for the, “disastrous NAFTA trade deal,” from the 1990’s. He also criticized his predecessor, President Barack Obama, for signing the TPP, the Trans-Pacific Partnership, which he has withdrawn the US from since taking office.
Trump also heavily criticized China and our trade policies with them. He promised to label China a currency manipulator his first day in office; something he still has yet to do.
Dr. Doug Irwin, an economics professor at Dartmouth College, came to Saint Anselm on April 3 to speak about the future of US trade under the policies of President Trump.
Dr. Irwin explained that Trump’s trade positions have been influenced by some of his key advisors, primarily Steve Bannon and Peter Navarro. Steve Bannon, CEO to Trump’s campaign in its final months, and now the White House Chief Strategist, is a self-proclaimed economic nationalist. Many historians compare this to the trade policies of President Theodore Roosevelt which led to the downward spiral of world trade during his presidency.
Peter Navarro, the director of the newly established National Trade Council, has consistently criticized US trade with China over his career. Both of these advisors have contributed to Trump’s “America First Trade Policy.”
Although this policy is appealing to many Americans, especially those that have lost their jobs to outsourcing, Dr. Irwin explained this policy could be very bad for Americans, and the overall health of US trade with other countries.
He stated that the US having a trade deficit is very good for the country. When there is a deficit with other countries, they in turn invest their surplus in the US.
Dr. Irwin also claimed that the US currently has a bad approach for valuing our deficit with other countries. He used the example of the assembly of iPhone’s in China.
Apple currently has their iPhones assembled in China, however, the iPhone is essentially a world product. The iPhone has parts that come from all around the world. When China assembles the iPhone, it does it for roughly 20 cents. This is the valued-added trade deficit. However, because it is assembled in China, the entire price of the phone counts towards our deficit with China.
Dr. Irwin stated that another issue with the trade policy of President Trump is his emphasis on manufacturing. Since the 1980s, manufacturing has significantly declined in the US. However, a large portion of this decline is due to extensive use of robotics in manufacturing. Many assembly lines consist of solely on robots that can work 24/7. He claimed that jobs lost to robots will never have a chance of coming back.
Because of President Trump’s nationalistic approach, his aggressive attitude toward trade deals, and the continued decline of US manufacturing, there could be an unstable future for trade in the US, according to Dr. Irwin.
Dr. Irwin concluded his lecture by saying, “There’s a new division, not just in the United States. What we’re seeing is actually a worldwide development. What we’re seeing is not just left versus right, but open versus closed in terms of migration and trade, and we saw that in the Brexit vote, and we’ll continue to see that in future European elections.
The Crier asked Dr. Irwin why there has been so much news about recent investment by large corporations and decisions by manufacturing companies to relocate to the US from countries like Mexico since the election of Trump, if there could be serious issues for the US economy due to trade.
Dr. Irwin responded saying, “That news is relatively selective, there has just been as much news about companies leaving the US, although it may not be covered as much by major news net-works. Also, a lot of the recent news in major investment has been planned for years and is finally coming through.”