Why Trump’s Trade Bluster Is Just That

When we think about Donald Trump and his protectionist trade proposals, it’s important to remember that while they may sound appealing when bellowed at disaffected workers from the campaign trail bully pulpit, in reality they are both unrealistic and dangerous.

As I’ve been keen to remind readers, you cannot simply rip up trade agreements and start the world’s largest economy down the road to de-globalization. That kind of thing represents a step back for society and will lead directly to all kinds of undesirable outcomes that the President-elect either isn’t cognizant of or else doesn’t care to discuss with voters.

Here’s Paul Krugman’s Christmas Day take on the subject:

What would happen would be a global trade war, which would disrupt the existing economic structure, which is built on elaborate international supply chains.

In the long run, a new structure with shorter chains would be built. But in the meantime, some industries, some factories, would end up becoming sudden losers — in the US as well as in developing countries.

You can’t really turn the clock back a quarter-century; but even trying can produce exactly the kind of rapid, disruptive shifts in production that fed blue-collar anger going into this election.

Right. In other words, Trump is going to end up screwing the very same people who he credits with getting him elected. The “silent majority” is going to end up taking it squarely on the chin.

So think about that and then consider the following short passage and graphic from Stratfor:

But unlike the TPP, which has yet to enter effect (and never will, by all appearances), the North American Free Trade Agreement has been in place for more than 20 years. In that time, trade relations among the United States, Mexico and Canada have deepened to an extent that will be difficult to reverse. Since his Nov. 8 victory, Trump has tempered his rhetoric, and it now seems unlikely that his administration will take any drastic action on NAFTA. Even so, retooling the trade bloc will have far-reaching repercussions on businesses and entire economic sectors throughout the NAFTA area. A look at the U.S. and Mexican automotive industries reveals the challenges that await Trump in his endeavor to counter the effects of more than two decades of North American economic integration.

trade

Something tells me Trump cares very little about the feasibility of going through with the promises he made prior to winning the election. As he put it earlier this month: “we won so now we don’t care.”

Advertisements

2 thoughts on “Why Trump’s Trade Bluster Is Just That

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s