President Donald Trump is pushing all the right buttons when it comes to an economic agenda for his administration: eliminate excessive regulations, reduce corporate taxes, repeal Obamacare, pursue a sane energy policy, and fix immigration. But what is puzzling is that Trump has expressed some opinions about trade that are troubling.

We can’t ignore the fact that exports drive our economy and job creation, so all Americans should be supporting U.S. manufacturers and their fight to expand American exports. It’s good for America and good for our trading partners who covet the quality and innovation of American goods and services.

So it’s hard to reconcile Mr. Trump’s mission to “Make America Great Again” when his initial attitude about trade would interfere with the ability of America’s entrepreneurs and small businesses to compete globally.

It starts with his seven-point trade agenda, which has some recommendations that need further study.

His first priority is to “Withdraw from the Trans-Pacific Partnership, which has not yet been ratified.”

While the Trans-Pacific Partnership (TPP) is far from perfect and largely misunderstood by many people, TPP will make it easier for American entrepreneurs, farmers, and small business owners to sell Made in the USA products abroad by eliminating more than 18,000 taxes & other trade barriers on American products across the 11 other countries in the TPP — barriers that put American products at an unfair disadvantage today.

Mr. Trump needs a refresher course on what is happening in Asia. China has put in place trade agreements with nations throughout Asia, which were once solid America markets that have allowed them to displace our products and dominate these lucrative markets. They have successfully cut out American goods, which is why TPP is critically important in winning back this business for our workers.

I lived in this part of the world for over 20 years and am today an American manufacturer employing nearly 700 people. I have sold countless American manufactured products such as refrigeration, ice machines, cooking equipment, food preparation equipment and dishwashing machines to places like Thailand, the Philippines, Malaysia, Indonesia and Singapore.

Because China has been laser focused on opening up Asian markets for their manufacturers they have established duty free access to many of the countries included in the TPP giving them a tremendous advantage over us. We lose valuable trading relationships at the expense of China’s trade prowess.

I do not blame China for looking out for their interests. I do blame our political naivety.

Trump’s plan to label China a currency manipulator is not without merit, but starting a trade war with China is ill-conceived.

As the New York Times recently wrote: “Cutting off trade will not bring back the bulk of American manufacturing jobs lost to China in previous decades as it became the world’s factory floor. Already, some industries that left the United States years ago, such as garment making and some light manufacturing, are now leaving China for even cheaper places. An aggressive stance with China also risks antagonizing an authoritarian government with its own brand of economic nationalism.”

Also it is important to remember over 50 percent of what we import from China is raw materials and components required by American manufacturers. A disruption in these supplies would cause the loss of thousands of manufacturing jobs; the same jobs we are trying to protect.

His other plan is to: “Tell NAFTA partners that we intend to immediately renegotiate the terms of that agreement to get a better deal for our workers. If they don’t agree to a renegotiation, we will submit notice that the U.S. intends to withdraw from the deal. Eliminate Mexico’s one-side backdoor tariff through the VAT and end sweatshops in Mexico that undercut U.S. workers.”

The Council on Foreign Relations notes that regional trade increased sharply over NAFTA’s first two decades, from roughly $290 billion in 1993 to more than $1.1 trillion in 2016. Cross-border investment has also surged, with U.S. foreign direct investment (FDI) stock in Mexico increasing in that period from $15 billion to more than $100 billion.

CFR also notes that supporters of NAFTA estimate that some fourteen million jobs rely on trade with Canada and Mexico, while the nearly two hundred thousand export-related jobs created annually by the pact pay 15 to 20 percent more on average than the jobs that were lost.

So I hope that Mr. Trump and his advisors take a more reasoned look at NAFTA before they engage in a nasty trade battle that would punish both countries.

This is not the time for America to close its borders and divest from long standing relationship around the world. Instead, it’s time to reinvigorate our small businesses by fixing our archaic tax code, reduce regulations, and show U.S. manufacturers that the government stands behind them by providing access to foreign markets in the same way that foreign manufacturers have access to our market.

Let’s not forget that the Smoot-Hawley Tariff in 1930, which was designed to help protect American companies, instead led to retaliation and a high tax on American exports. The unintended consequence of this tariff was that significantly less trade occurred between America and foreign countries. Many believe this was the leading cause of the Great Depression. It certainly made it deeper and much longer.

Chris Holman, chairman of the Washington-based National Small Business Association, recently was quoted as saying “The politicians all say small business is the economic lifeblood of our country, and then they go and vote against small business.” Let’s not do this with our trade relations.

About The Author Neal Asbury [Full Bio]

Neal Asbury, chief executive of The Legacy Companies, has published over 200 articles on global trade issues, writes for Newsmax, and is the author of Conscientious Equity. He frequently appears on cable news programs and hosts the nationally syndicated talk radio show Made In America.




Neal Asbury's Made In America