Trump knows nothing about trade, but he does know a lot about what is terrifying middle America , and he exploits it like a boss
A Trade Tutorial for Trump
He needs a tutorial on trade. Trump is either an idiot on the subject, or he venally stands out front of the American people as a Man of Action, promising to act on their behalf even though the actions he promises will devastate them.
"The real-estate developer recently added Japan to his most-wanted list of job killers, which includes China and Mexico. “We have a trade deficit with Japan of over $100 billion a year,” he said during his post-primary press conference in Florida on Tuesday. “They’re killing us. You know what we sell to Japan? Practically nothing.”
Is $116 billion worth of annual goods and services exports to Japan practically nothing? Japan is the fourth largest U.S. export market in goods after Canada, Mexico and China. In 2013 the top U.S. exports to Japan were agricultural products ($12.1 billion), machinery ($10.7 billion), medical devices ($8 billion) and aircraft ($7.1 billion)."
The WSJ Editorial Board gets this dead bang correct, but even so misses an even greater point "that every $1 of a US trade deficit is almost always and exactly offset by a $1 “foreign investment surplus,” resulting in a balance of payments of zero after accounting for all cash inflows and outflows for both merchandise/services and financial assets. As Don Boudreaux explained several years ago, lamenting America’s trade deficit is to lament the fact that foreigners are eagerly investing hundreds of billions of dollars in America every year. We should keep in mind that America’s trade deficits result in “inflows of foreign investment capital that strengthen America’s economy” — about $10 trillion in foreign investment over the last 30 years, see chart above." See, item number 3 in Perry's Thursday evening links column.
An example follows: China rust belt investment set to challenge US voting habits - FT.com
The Democrat party does not understand this. The progressives tend not to understand this. Trump seems to not understand this. And while he remains a New York City real estate developer it doesn't matter. But once he becomes President it does. His policies would simply strip America of this investment capital, in order to keep jobs in which Americans do not have a competitive advantage. This is like sacrificing your top quality players in a sports franchise, in order to keep your benchwarmers. Lunacy!
Mark Perry explains the "logic of protectionism," which, of course is illogical to its very core. Don Boudreaux offers this rejoinder to those who oppose free trade: Yet Another Open Letter to Paul Krugman - Cafe Hayek He follows this up with a longer post on The Essence of the Case for Free Trade - Cafe Hayek.
As far as I can tell, the essential case against free trade is: Politics. The adherents of some political factions need to believe trade is bad, and the clerisy of that political belief are willing to support such nonsense. Then there is Trump, he seems to stand apart, from the political party he allegedly represents, while supporting this key position of the opposite party.
The only "good argument against trade is the one made by Malthus lo those many years ago, and history has proven this argument to be baseless. Yes, change does result in, well, change, including job change. This is not a negative, unless one really believes we were better off in days of yore riding around in horse drawn carts, plowing land with horse drawn plows, and generally living a life lacking in anything even remotely resembling modern leisure, health, or security.