How America's Trade Policies Hurt You & How Trump Will Fix It

Your politicians and representatives have sold you short.

Through unbalanced and unfair trade policies, the American people have lost jobs, wages, and opportunity.

And Trump has been the only one to address the problem and provide real solutions. In fact, as a businessman, trade is arguably his biggest strength as a candidate.

Some pundits claim that Donald Trump will start a “trade war”, but the truth is, we're already fighting one – and we're losing.

How Do Trade Imbalances Occur?

There are a variety of factors that creat a trade gap between the US and other countries.

Let's take a look at a few of them.

Currency Manipulation

Currencies usually go up and down depending on the strength of a country's economy.

For example, a richer country, like the US, will have a “stronger” currency compared to a country like the Philippines.

But as the economy in America struggles or the markets in the Philippines thrive, this will change. The dollar will get weaker, the peso will get stronger, or both, relative to each country's wealth.

In places like China, however, they artificially “manipulate” their currency. China's economy's been growing rapidly for years, yet the renminbi (Chinese currency) has not gotten much stronger.

Why does this matter?

Because as long as the renminbi stays weak compared to the dollar – which is the global currency – it'll always be cheaper to buy goods from China. Even when the US economy falters, the dollar will still be six times more valuable than the yuan.

That means a product that costs 4 yuan is cheaper than one that costs 1 dollar.

But this doesn't just affect Americans, it effects the lower class in China too. Since their currency doesn't improve as the country grows richer, the average worker never sees their wages or purchasing power increase.

They remain stuck in poverty their entire lives, working long hours for just dollars per day.

Labor & Environmental Regulations

China is not the only country that treats their workers poorly. It applies to many of the countries that manufacture American goods.

It's not always their fault, of course. In many cases, they simply don't have the wealth or infrastructure to provide first world wages and benefits to their employees.

But is it right to exploit that? And is it smart to give up long-term American jobs for short-term savings and profits?

Even the jobs provided to disadvantaged people in other countries are not a real solution. Because they'll never be able to pull themselves out of poverty or see any true growth without better wages and conditions.

By raising the standard across the board, everyone will eventually benefit. US workers will have more jobs, while workers in other countries will be paid better for the work they do.

Americans simply can't compete with people willing to work for $1 or $2 an hour. But with our current trade deals, that's exactly what's happening.

Tariffs

A tariff is essentially a tax that's placed on goods that go in or out of a country. For instance, if you want to take a product and sell it in Japan, you'll have to pay a tax to the government based on what you sell.

This helps protect a nation's economy.

The US, on the other hand, doesn't enforce tariffs. That's why companies are easily able to manufacture goods for cheaper in other countries, then bring them to the US and reap huge profits.

The problem is, many of the US's biggest trading partners do have tariffs. In short, we do not charge them for selling in the US, but they do charge us for selling in their countries.

In a perfect world, there would be no tariffs, and everyone would benefit from truly “free” trade. But this simply isn't realistic, especially in today's global economy.

If we do not enforce tariffs, while our trading partners do, the US will always get the short end of the stick.

Intellectual Property Theft

You may think “Chinese knock offs” are mostly harmless, but they have a negative effect on our economy.

While most countries are held to trademark and patent laws, China is not. For instance, you couldn't simply go pick a product from the store shelves, make an exact replica, and then sell it on your own.

But China does. They take tech ideas, clothing designs, and more, repackage it, and then sell it.

Why does this matter?


Because rather than buying products from the US, for instance, they simply take the idea and manufacture their own. Not only does this cost American companies immediate sales, the Chinese companies can then use their trade advantages to sell the product at a lower price and cut the US out entirely.

Intellectual property is very, very valuable – yet China is able to get it for free.

What Are Trump's Solutions?

In a nutshell, Donald Trump wants to make trade between the US and other countries more fair. He wants to level the playing field.

He believes our trade partners should be held to the same labor and environmental regulations we are. Not only will this prevent developing countries from using their mistreated workers to beat out American manufacturing jobs, it also makes sense morally.

Critics argue that this will drive up prices on certain things, particularly consumer goods. But let's take a look at the iPhone, for example.

Apples spends roughly $200 manufacturing the latest iPhone. Possibly less. Yet they sell it for $600 or $700 and up.

Even if you account for advertising costs, they're profiting anywhere from 100% to 200% per device – and have sold over a billion iPhones to date. That's hundreds of billions in profit, just on one product. They still have computer, iPods, and more.

Would Apple fail as a business if they made $50 to $100 less per unit? It's extremely unlikely.

Even if they did have to increase prices, it wouldn't need to be much. And if we're able to bring back a large number of manufacturing jobs to the US, that would work to put more money into the economy.

We may be paying higher prices for certain goods, but we'd ultimately be getting paid higher wages.

How exactly do we entice companies to invest in the US, rather than abroad?

1. By enacting tariffs on products imported to the US.

2. By forcing our trade partners to let their currency “float”.

Companies like Ford and Nabisco send their manufacturing to places like Mexico, then sell their cars and food in the United States.

Placing a tariff or tax on those goods means that for every truck or cookie they sell here, they'll have to pay a fee on top of it.

This means that they'll either have to move their factories back to the US, creating more jobs for Americans, or they'll have to live with smaller profits. And the tariffs they pay can then be used to create more jobs, better infrastructure, etc.

It's a win-win. And many countries already use tariffs. It only makes sense that the US take advantage of them as well.

And by allowing their currencies to float, other countries will have to compete harder with the US on price. As they build wealth, their currency will rise naturally, closing the pricing gap between the two countries.

They won't be able to reap the benefits of a weak currency while still improving their economy. It will be one or the other.

A Negotiation Isn't a War

Pointing out that China or Mexico is getting the better of the US in trade doesn't mean they're bad people.

Of course they're going to try and get the best deal possible for their countries and businesses. But we have to do the same for the US – negotiate trade agreements that benefit the American people, not just other countries or wealthy CEOs.

This has been one of Donald Trump's biggest focuses, going all the way back to interviews he gave ten or twenty years ago.

The US has suffered from bad trade deals for too long. Trump understands this. It's time to correct our trade imbalances and bring jobs back to the US.

Let's make our economy and our country strong again. Let's Make America Great Again. 

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