I know little about the economic theory or technical details of international trade and yet in my work as a truck driver I am directly involved in it. And a healthy part of my pay comes from it. Not everything I haul of course crosses the international border — well then again maybe some products although picked up and delivered within the borders of the U.S. may have had their origins elsewhere.
But what I do know is that international trade creates a lot of jobs for us all and supplies us all with a plethora of choices for the products we buy.
Messing with international trade is a dicey matter. If you slap on tariffs to protect one domestic industry you hurt others that might depend upon a raw product, such as aluminum.
An article in the Wall Street Journal says that a study shows that imposing higher tariffs on imported cars for instance will result in three domestic jobs lost for every one gained.
President Trump announced last week the slapping of tariffs on car imports and this week it was announced that his administration has decided to slap new restrictions on steel from Canada and Mexico, and the European Union. All are promising retaliatory measures on their part that could have detrimental effects on various U.S. businesses and their employees.
Trump complains that other nations take advantage of the U.S. and that the U.S. suffers from trade imbalances.
It’s a difficult subject. I mean all of us who just read the news and take the word of the quoted experts have had it pounded into our heads that it is bad if we buy more from another nation than we sell to it — China being the biggest example of an imbalance not in our favor.
But more recently some other experts or observers write that, no, no, no, not necessarily so. If we get needed products for the consumer that is not so bad. It makes us richer. Go figure.
I think the answer is that it is good for some and not good for others.
But for my part I think I’d rather trust a free market (to the extent any market can or will be totally free) with a minimum of governmental restrictions — but of course strong health and safety restrictions.
(And I have written things to suggest perhaps a little protectionism might not hurt and might help — a difficult subject.)
I personally have doubts Trump knows what he is doing and that he probably gets conflicting advice from the people he surrounds himself with, and that many of them just tell him what he wants to hear — such as “you are the greatest sir”.
What he is doing is making a lot of noise and bluffing. Yes, it may be a strategy in negotiating. And who knows? in some cases it might produce positive results. But still, there are always winners and losers, and I mean in our own country.
I shake my head when I see how the big farmers in the Central Valley of California went all out to elect Trump — probably because of the promise of fewer restrictions on water usage and cutting down on those pesky environmental regulations — and now are aghast that he is messing with their export markets.
There is a theory that the Trump administration’s tax cutting on business and generally favorable policies on business have created an atmosphere where companies and investors feel comfortable to invest and expand and that all of this has boosted our economy.
And putting all technical measures of the economy aside I can say on a personal scale that the empirical evidence is that something good has happened as far as the employment market since Trump came into office — and I am a Trump detractor not a Trump supporter. But over the past year or so I have seen help wanted signs sprouting up all over the place. That to me is a sure sign something positive is happening. It sure wasn’t the case when I was a young man and even during the intervening years. You were more likely to see signs that read: “We are not taking job applications”.
However, our growing economy I think is probably in part a natural progression from our history of boom and bust. Poor President Obama gets little credit for an economy that continued to improve, albeit ever so slowly, throughout his two terms in office. He inherited the mess left over from the Great Recession under the leadership of our first president with a Masters of Business Administration (MBA) degree, George W. Bush, who was of course a Republican — you know one of those business-friendly Republicans? Maybe a little too friendly.
There are always winners and losers, except some losers are winners too. In the Great Recession the general public lost — so did the big banks, but the big banks got bailed out by the “business friendly” government. The Trump administration is moving to lessen restrictions on the big banks whose unwise business practices led to the Great Recession.
But on international trade I think perhaps things do need to be shaken up a little and the U.S. should for its own good assert its power. Still, I think it could be done in slightly quieter and more measured terms. Every outburst has ripple effects that can destroy jobs and livelihoods among the greater populace that will not have the government to bail it out.
I mean even Obama failed to bail the little people out after at least implying that he would.
When Trump makes noise in his ever-vacillating trade declarations — we will slap on tariffs, we will hold off — he does so I think to satisfy his political base who like tough talk for the sake of tough talk. And in turn, the leaders of other nations feel obligated in turn to satisfy their base of support, but in total the public in all the nations stands to suffer over this game of bluff and one-upsmanship.
And I go back in forth in my own mind. I mean at least all this noise has brought the subject and talk on international trade out in the open. It is a consequential matter that the public should be aware of. If only we could understand it all.