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Trump's trick-or-treat on trade

By Don Bonker | China Daily USA | Updated: 2015-11-19 12:07

Donald Trump's campaign rhetoric, however absurd, is boastfully driving the debate among Republicans on issues such as immigration, but it's his blistering attacks on US trade policy that are more alarming.

Back in 2011 the New York-based tycoon made headlines by suggesting the US arbitrarily increase tariffs by 25 percent on all goods coming in from China, as if there would be no retaliation on our exports to that country. In his campaign announcement speech, he threatened a 35 percent tax on Ford vehicles made in Mexico, vowing to limit imports from China and other Asian countries.

Not surprisingly Donald Trump wants it both ways, asserting that free trade is terrible because we have "stupid" officials doing the negotiating, yet it could be wonderful if he calls the shots and has the final word (someone should inform him about the US Constitution, which clearly states that Congress shall regulate interstate and foreign commerce). This may be how he cuts backroom business deals but it's unacceptable as the leader of the world's number-one economy.

What's scary is Trump teaming up with Congressional Democrats in blocking trade agreements and erecting higher tariffs on foreign imports. His message resonates with blue-collar Democrats when he lectures China, saying "we've got to get down to work because you can't continue to devalue and suck up all the jobs, suck up all the money right out of our country."

As Congress is deliberating the Trans-Pacific Partnership (TPP), and the accompanying trade promotion authority, labor union leaders have made it crystal clear to any Congressman who dares to vote for the trade legislation that "we will cut the spigot off on future donations to your campaign."

Such fear tactics combined with viral protectionism spreading across the country, tapped into by Bernie Sanders and now Hillary Clinton switching her position on TPP, is undermining the president they helped to elect.

Using Donald Trump's words, "to make America great again," our president must be a strong leader in today's global economy, which Barack Obama has attempted to do with initiatives such as TPP, intended to give the US a stronger presence in the Pacific Rim and provide a protective shield for Asian countries threatened by China's enormous growth and influence in the region. On this issue and others, including the Iranian Nuclear Agreement, both parties are, in effect, politicizing America's foreign policy that is compromising our one-time undisputed leadership internationally.

Such actions could lead to a trade war with China and beyond. In the 1928 presidential election, Herbert Hoover was less pompous than Donald Trump but nonetheless called for higher tariffs that set the stage for a Republican Congress poised to run amok on limiting foreign imports.

Shortly after the elections, hundreds of trade associations were formed that triggered an unbridled frenzy of log-rolling, jockeying for maximum protection for commodity and industry producers leading to enactment of the Smoot-Hawley Tariff Act that hiked import fees up to 100 percent on more than 20,000 imported products.

On the Senate side, another 1,200 amendments were added that proved so egregious they prompted Senator Thaedeus H. Caraway of Arkansas to declare that "I might suggest that we have taxed everything in this bill except gall," to which Senator Carter Glass of Virginia responded, "Yes, and a tax on that would bring considerable revenue."

The legislation prompted 1,000 of the nation's leading economists to sign a petition urging Hoover to veto the Smoot-Hawley Act, while the New York Times printed an ad with signatures from 46 states and 179 universities warning that signing the bill may prompt a fierce reaction.

Indeed within a few months, America's leading trade partners retaliated causing world trade to plummet by more than half of the pre-1929 totals, one of several factors that precipitated the Great Depression.

A Trump presidency would have plenty of gall, to be sure, but it is certainly not what is needed to make America great again.

The author is a former US Congressman.

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