Mar 6, 2018

A Trade War is Nothing New

President Trump has apparently "shocked" the world again with his open use of Twitter to communicate to the people of the United States and in fact to the people of the world, a message that does not set well with many.  This time, the latest so-called shock, has come with talk of trade with other countries.  The President has pointed out that the trade deficit is unfair to America, unfair to American workers, and is, in fact, hurting our country.  He is preparing to do something about it from restructuring NAFTA to restructuring our trade with Europe and all of Asia.    Unfortunately, it appears that many around the world and in Congress are not happy with the President's planned actions.   So let's break this down and think long and hard about what and why the President is doing all of this.

In the first place, he is 100% right.  Trade has been unbalanced and unfair to the United States since at least the late 1960s or early 1970s.  Steel, cars, airplanes, computers, clothing, televisions, radios and hundreds of other items were once made almost exclusively in the United States.  Sometime just after World War II and Korea, the focus seemed to shift collectively from promoting American workers to promoting the workers of our former enemies.  The United States rebuilt much of Germany and Europe after the war.  The US also focused on rebuilding Japan after the war - don't believe me?  Go look in any antique store and you'll find "Made in Occupied Japan" items for sale.  These items were manufactured and imported from - wait for it - yes, an "Occupied" Japan.  We helped them rebuild factories, in both Asia and Europe after the war years.   As the winning nation of the war, we were extremely generous to these countries and their business ventures.  Japan, Taiwan, Germany became a cornerstone for Americans receiving imports.  It did not take American owned companies too long to realize that they could not compete with the wonderful breaks given to our former enemies.  Once they realized that, many American companies began to close factories here and move the jobs overseas.  Pick up just about any toy from the early 1970s through the mid-1980s and you'll see "Made in Japan" or "Made in Taiwan" stamped clearly on the back.  These were American companies that had no choice except to move overseas or be defeated by a new enemy - Trade Wars had started - It appeared that when many of these former enemy nations could not defeat the U.S. on the battlefield, they shifted their focus to defeating us through trade.  A few years later China began outsourcing their huge population for pennies on the dollar and suddenly the same companies that had flown quickly to Japan and Taiwan landed squarely in China.  Now look at almost any major product you have in your home and there's a good chance you'll see "Made in China" stamped on it.  Meanwhile, many of the American workers, no longer having factory jobs, were regulated to the new fast food wave, outlet stores, and other jobs to make ends meet.

In the 1992, Presidential Campaign NAFTA (North American Free Trade Agreement) became the center of discussion as Ross Perot famously argued "NAFTA Bad!" while candidate Bill Clinton and then President George Bush, Sr. argued it was good.  In fact, politicians for both the Republican Party and the Democrat Party have argued how good NAFTA is since that time - it almost makes you wonder what sort of kickbacks are going into Washington as companies avoid taxes and fees by shipping their products into Mexico and trucking them up into the United States doesn't it?

For years, private citizens as Democrats and Republicans have been yelling that the Trade Wars is killing our jobs.  We have watched clothing, toys, pots and pans, furniture, electronics and just about everything else you can imagine move overseas.  The American Compannies have continued to get rich, the forigen companies have continued to get rich and the American population has been left to complain and yell all while getting poorer and poorer.  During elections Democrat and Republican politicians alike have promissed to do something, won their elections, gone back to Washington and done very little.  Sure, Toyota and Nissan have factories here now as does BMW, but what does that tell us?  It tells us that these companies have made so much off the Trade Wars that they can now afford to throw us a bone.  It tells us that they are now seeing higher wages in their countries and as a result they want to come here where the labor is cheap - Yes, we are quickly becoming the "CHEAP' labor of the world.  Nissan or Toyota can come here, offer $10, $12, or $15 a hour and we'll jump out of our fast food and conviencnie store jobs and run to them like begging dogs.  In short, they are showing us how they are winning the Trade Wars. 

So, fast forward to now and we have President Trump.  Unlike any previous President, he owes nobody.  He is not beholden to parties for money, he spent a lot of his own.  He doesn't owe big business, because in many cases he is bigger than their business.  He took no contributions that could guide his decisions - he can't be bought in simple terms.  This President suddenly wants to address the trade issue.  It's not a campaign promise being made in an election year.  No this is a promise being made during a non-election year.  While he's doing this, Democrats and Republicans in Congress are crying foul at the same time.  They are yelling he is going to start a Trade War.  It's understandable that Europe, China and other countries would be yelling about potentially losing income, but what is our Congress yelling about?  Could it be that many of them have been working against the American people all this time to help other countries win the Trade War? 

Make no mistake, President Trump is not starting a Trade War....there's been a Trade War going long before he ever took office.  No, this President is talking about putting us back on an equal playing field and giving the American worker a fighting chance in the war once again.   "President Trump is going to start a Trade War"....bull.... Trump is going to end the Trade War and that appears to have many in the world concerned about their pocketbooks as he continues to keep his promise and make America great again.