One of the major planks in Donald Trump’s campaign platform, if not the top priority, has been a stalwart insistence that voluntary commerce and trade with other countries weakens America’s economy and costs American jobs. Moreover, he insists that he knows best how to manage it all in the best interests of America.
Indeed, Trump has not only proposed slapping a 45 percent tariff on all goods made in China, and massive tariffs on other countries like Japan and Mexico, but he repeatedly declares that he will personally impose punitive taxes on Ford Motor Company if it follows through with plans to build a manufacturing plant in Mexico. He has also threatened punitive penalties against Apple Inc. if it continues making iPhones in China. It would seem, like Barack Obama, Trump has his own autocratic pen and phone.
Some cheer at these proposals, believing that Trump will, as he puts it, “Make America Great Again” (a campaign slogan lifted directly from the Reagan campaign over thirty years ago). Of course, these populist/nationalist/protectionist proclamations and policies are nothing new. The Progressive Republicans a century ago, including Theodore Roosevelt, William Howard Taft and Herbert Hoover, all embraced them. Even earlier, they were central to the short-lived People's Party, which was eventually swallowed by the Democrat Party’s progressive movement. However, the times of greatest economic growth and progress in America, resulting in the creation of the vast American middle class, grew not from government control and management of the economy by politicians and bureaucrats, but market capitalism. Perhaps I will delve further into this another day, but back to Donald Trump.
While Trump and his surrogates denounce free trade, proclaiming that they stand with and for America’s working men and women, they find it hard to explain away the billionaire's own practices for most of his business career. As it turns out, Trump has never shown any qualms about using foreign labor, foreign capital and even foreign-owned companies to service his personal interests and acquire wealth.
Even a cursory examination of Trump’s business dealings reveals that playing in international markets is a matter of routine for him. The Donald J. Trump Collection brand shirts, eyeglasses, perfume, cufflinks and suits are made in low-wage countries like Bangladesh, China, Honduras, and Mexico to keep costs down. And Ivanka Trump’s own product line imports 628 of its 838 items on offer.
Other Trump brand products such as shoes, ballpoint pens, soap and ties have been outsourced to China, Japan, Honduras, Brazil, Norway, Italy and Germany since 2006. And about 1,200 shipments of Trump brand goods have been imported into the United States by foreign companies since 2011.
And for all Trump’s criticisms of foreigners stealing American jobs, nine of Trump’s companies have tried to import at least 1,100 foreign workers to America via short-term visas.
Trump’s foreign dealings are not limited to consumer products. The Trump Hotel Collection has locations in Panama, Rio de Janeiro, Ireland, Toronto, Vancouver and Azerbaijan. The Trump Real Estate Collection has Trump Towers in India, Istanbul, Uruguay and the Philippines, as well as Trump World in South Korea. Apparently, what’s good for Donald Trump Inc. is not good for Ford, Apple or any other American business. Trump knows best.
I don’t list these facts to condemn any of Trump’s business dealings. I don’t have any particular familiarity with them. As a general matter, however, there’s nothing wrong with taking advantage of foreign investment opportunities; in fact, doing so benefits our economy by allowing low- and middle-income Americans to acquire goods and services at more affordable prices. Moreover, millions of hard-working, industrious, tax-paying Americans work in jobs that rely on commerce and trade with other countries. But it appears they don’t matter when “Making America Great Again.” You never heard about them.
Trump wants to use the power of the presidency to deny other Americans the ability to take advantage of global markets the way he has. The questions voters should be asking Trump are obvious: If international trade is so bad for America, why has he spent most of his business career engaging in it? And if commerce and trade kill American jobs, how has he managed to create tens of thousands of them using, in part, the wealth he acquired from overseas investments?
Does Trump believe his own rhetoric? He knows from his own behavior and experience that trade is generally good for the economy but condemns it anyway. Is this a purely cynical move to get votes, or is he intentionally engaging in business deals that he believes harm the United States, caring more about his personal wealth than the country? None of these scenarios inspire confidence in Trump.
Supporters of protectionism, such as Breitbart writer Julia Hahn, point out that President Ronald Reagan imposed tariffs on imported goods from Japan, a fact I have mentioned on my radio program. But her analogy between Reagan and Trump, like so many others asserted by Trump surrogates, is not really an apt one. Reagan did not make wholesale protectionism and tariffs a central plank of his platform, as Trump does; nor did he support imposing high tariffs on every single product produced in a particular country. Actually, Reagan emphasized the opposite. Reagan’s tariffs were targeted, including on Japanese motorcycles and semiconductors, and usually in response to specific violations of trade deals. Besides, Trump is a populist/nationalist/protectionist. Reagan was a conservative. There’s a difference.
Remember, a tariff is really just a tax, the cost of which is imposed on the American people. The higher the tariff, the higher the tax. Imagine what a 45 percent increase in the price of goods made, say, in Japan would do to a middle class family shopping for a Toyota or Honda. While Trump and his surrogates may have the money to pay the higher prices his policies would cause, many Americans – who are already having difficulty making ends meet – do not.
Again, imagine the destruction of all those jobs and small businesses linked to commerce and trade with Japan –domestic salesmen, mechanics, maintenance workers, distributors, and so on. Are they not hard-working middle-class Americans too? And we know for a fact, from our own history with protectionism and massive tariff regimes, that other countries will react with retaliatory tariffs. The Fordney-McCumber tariff of 1922 and Smoot-Hawley Act of 1930, along with other actions by the federal government, including the Federal Reserve, contributed to severely damaging our economy and the world economy. A recession turned into a depression, Franklin Roosevelt was swept into power, and the New Deal was instituted. Americas working men and women suffered horribly. Unemployment soared: 1931 (15.82%); 1932 (23.53%); 1933 (24.75%); 1934 (21.6%); 1935 (19.97%); 1936 (16.8%); 1937 (14.18%); 1938 (18.91%); 1939 (17.05%); and 1940 (14.45%).
Of more recent vintage, the government’s interference with the housing market, including the Community Reinvestment Act (CRA), resulted in a disastrous housing collapse followed by the Troubled Asset Relief Program (TARP) and hundreds of billions in tax-dollar bailouts; its control over and mismanagement of the savings and loans a decade earlier resulted in the collapse of S&Ls and another economic disaster and massive taxpayer bailout. We should be extremely skeptical of anyone who claims to be a mastermind over the American economy or big parts of it, Democrat or Republican.
Trump’s advocacy of protectionism and massive tariffs remains one of the most troubling aspects of his campaign, not least of which for the harm it would assuredly inflict on hard-working, tax-paying Americans both in terms of their jobs and daily expenses. The fact that Trump’s political rhetoric runs directly contrary to his own globalist actions as a very successful and wealthy businessman requires a better explanation than he has given thus far.
Mark R. Levin is the Editor-in-Chief of Conservative Review and host of LevinTV on CRTV.