The American Enterprise Institute (AEI) just released the most exceptionally misguided statement on trade that I’ve seen. They attack Trump for being against losing jobs and industries to China and Japan because AEI actually favors trade deficits!
AEI’s headline is “Donald Trump flunks ECON 101 when it comes to international trade“. The truth is that AEI flunks ECON 101.
(disclaimer: CPA takes no position on any presidential candidate, but we do engage on their good or bad ideas.)
They quote Trump as saying:
“What China has done to America?” he raged. “The money and the jobs they’ve taken from us? It is the greatest single theft in the history of the United States.” In other words, China is to the United States as Bernie Madoff is to investors. “And Japan is almost as bad,” he stormed. “Japan sells us millions of cars — and we sell them wheat!
“I’ve been saying for years that China would take us down. Why? Because our leaders are stupid and China’s leaders are smart. They sell to us, no taxes, no nothing. We sell them 10% of what they sell us. Ninety percent to 10%! It’s crazy. Our trade deficit with China is like having a business that continues to lose money every single year. Who would do business like that?”
AEI then says that the best strategy is to maximize imports and minimize exports! Astounding!. Trump’s position is “Economic La La Land”, they say.
You may love or hate Trump, or have mixed feelings. But this AEI position reveals that powerful organizations explicitly advocate ideas that kill our production, our jobs and our economy.
The Cato Institute is similar in this regard. Cato wants unilateral US trade disarmament… meaning they want the US to drop all barriers to imports. If other countries subsidize their industries to penetrate our markets and steal our industries, Cato says it’ll all work out better in the end.
This is the path that US Trade Representative Michael Froman, the US Chamber of Commerce and many powerful organizations take. This is why we need to build CPA stronger and to build the movement for America to produce more, create more jobs and be a successful net exporting nation. This is why we need you.