Trump’s transition team is discussing the possibility of an Executive Action from the president imposing tariffs on imports. This fits in with Trump’s America First policy which protects the workers in America and hopefully will create more jobs.
Trump promised to tear up the North America Free Trade Agreement (NAFTA) with Canada and Mexico. He is being tough with China and even with Japan saying that until now deals with both leave American workers with the short end of the stick.
However, not everyone sees eye to eye with trump on this matter including his own Republicans. They hope that Trump uses the threat of withdrawal from NAFTA as a tool to bring them to the table to renegotiate a fair deal. This would benefit the American workers and not alienate neighbors who are major trading partners. But according to Trump, what good is a threat if you aren’t ready to carry it out! Better tear up the old agreement and renegotiate a new one which will be more favorable to America.
Business interests sent people to warn future White House Chief of Staff Warren Priebus that even a 5% tariff would backfire, causing trade wars and angering allies. All in all it would not help boost the economy. However Wilbur Ross the new commerce secretary confirmed Trump’s position that there will be tariffs.
The following was a statement prepared by a business community organization to denounce Trump’s tariff plans:
“This $100 billion tax on American consumers and industry would impose heavy costs on the US economy, particularly for the manufacturing sector and American workers, with highly negative political repercussions. Rather than using a trade policy sledgehammer that would inflict serious collateral damage, the Trump administration should use the scalpel of US trade remedy law to achieve its goals.”
This statement talking about $100 billion tax on America seems to talk about continued unbridled spending overseas. Yes it’s true if people will continue to by overseas anyway then they will pay that tax. But the statement is not honest, because when there is such a tax, people will spend less overseas and more at home.
Trump himself always spoke about taking America out of the influence of special interest groups and doing what is best for America. There is no doubt that if it benefits America, Trump will disregard advice of such groups. But the question is when things aren’t clear, maybe some advice can be useful? Trump has a vision and perhaps the advice comes from naysayers that need to be ignored. One thing for sure, Trump won’t be suffering from “analysis paralysis”.