http://www.nytimes.com/2016/10/06/opinion/campaign-stops/global-trade-war-trump-edition.html 2016-10-06 10:24:58 Global Trade War, Trump Edition Why Larry Summers, Robert Reich and other economists think the Republican presidential candidate’s trade policies are ‘lunatic.’ === Let’s take Donald Trump’s trade policies at face value. If he is elected, “The era of economic surrender will finally be over,” Trump declared, repeating a favorite theme in a July As the world knows, Trump’s rhetoric has found a receptive audience among angry white working-class voters who have lost well-paying jobs to automation and outsourcing. Legions of Trump supporters have legitimate grounds for discontent. As my colleague Peter Goodman Policy makers and politicians, Goodman writes, Along these lines, Trump has successfully appropriated an issue — the distributional impact of free trade — that was, in recent years, the turf of Democrats. On Sept. 30, Rex Nutting, a columnist at The downside of Gordon Hanson, an economics professor at the University of California, San Diego, emailed me his analysis of Trump’s economic scheme: Erik Brynjolfsson, an economist at M.I.T.’s Sloan School of Management, was more forceful: Looked at this way, Trump’s stance is an implicit admission that he and his followers do not “believe in America” — an argument that the United States cannot compete successfully in the world arena unless protected by the imposition of high tariffs and punitive taxes on foreign production and foreign competitors. Robert Reich, an economist at Berkeley, former secretary of labor under Bill Clinton and a leading supporter of Bernie Sanders during the primaries, agrees. Trump’s trade proposals, Reich argues, On Jan. 7, Trump told The New York Times that he would When Ford proposed building new manufacturing facilities in Mexico, Trump declared in Trump said the same thing Andrew McAfee, a director of M.I.T.’s Initiative on the Digital Economy and co-author of “The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies,” was sharply critical of Trump. In an email, McAfee wrote: Sean Wilentz, a historian at Princeton, contends that Trump’s proposal is only slightly less drastic than the If the tariffs on goods produced in Mexico and China were enacted, the results, in Wilentz’s view, would be “pretty severe. Right away, U.S. domestic prices would rise significantly unless and until other sources take up the slack. And then comes the Mexican and Chinese response, killing exports to our second and third largest customers, respectively.” ( Many In October 2015, Clinton declared her opposition The general shift on the left and right toward contesting free trade agreements poses substantial dangers to the American economy. “Withdrawing from global competition is a particularly terrible idea for the United States right now, since we are on the verge of introducing much more capable robots into the manufacturing process,” Daron Acemoglu, the lead author of the Once the advances in robotics are achieved, Acemoglu wrote, Both Clinton and Trump, in Acemoglu’ s Without careful Dani Rodrik, an economist at Harvard, pays careful attention to the price of globalization. He has warned that what he calls “ That said, Rodrik has no enthusiasm for Trump’s proposals. In an email, Rodrik wrote: In the case of manufacturing employment, however, Rodrik argues that I asked He noted that every time Trump’s poll numbers have gone up, the value of the Mexican peso has gone down. As a result, imports from Mexico have grown, while exports from the United States to Mexico have fallen, putting thousands of Americans out of work: If the United States were to impose a 35 percent tax on Mexican imports, according to Summers, the economies of both countries would suffer: Even one of the most outspoken and effective opponents of past free trade agreements, Lori Wallach, the director of Public Citizen’s Global Trade Watch, rejects Trump’s approach. In a Sept. 22 essay written with Jared Bernstein, “ Worldwide, trade has “grown from 25 percent of global G.D.P. in the mid-1960s to 60 percent today,” Wallach and Bernstein write, and in the United States, it has grown from 10 percent to 30 percent. Instead of trying to halt globalization, Bernstein and Wallach call for new “rules of the road” that protect Trump’s trade proposals reflect his bullying style and his technologically uninformed approach to tackling America’s competitive vulnerabilities. He has tapped into the deeply felt, legitimate grievances of millions of voters whose livelihoods have been destroyed by globalization, but his cure reveals his deficient understanding of the situation. Trump lacks a grasp of America’s This is not the only area where the danger of his utter incomprehension lies. But it is the one on which he has staked his claim to the presidency. With his trade policies, as with pretty much everything else, his backward-looking, intellectually bankrupt agenda will take us very far from the promised land.