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OpEdNews Op Eds    H2'ed 5/30/19

Trump's Trade Tirade

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Harold Novikoff
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a rampage of cancelling treaties and trade agreements to renegotiate them for more favorable terms for the U.S.A.. The most heated dispute is with China, which accounts for the largest portion of our foreign trade deficit. The immediate point of contention is the business climate in China for American corporations that jeopardizes their exclusive proprietary rights of their products and services, accounting for billions of dollars of lost business.

More significant is the over-all trade imbalance which has grown steadily from less than $2B in 1986 to over $400B in 2018. Financial experts attribute the deficit to the Chinese contriving to lower the value of the yuan against the U.S. dollar, thus making Chinese imports to the U.S. less expensive and American exports to China more expensive. But the more fundamental reason for the massive trade imbalance is common knowledge.

The big step leading to our trade deficits, starting around 1970, was the mass exporting of domestic manufacturing by U.S.companies to third world countries where wages were a fraction of union wages here. The foreign-contracted manufactured articles come back to the U.S. as imports and are then sold for a larger profit and lower price than if manufactured here. Eventually, as of today, you rarely could pick up an item not labeled "Made in China", or Mexico, or Bangladesh, etc.. I had a visitor from Germany around 1985 who, in comparison with their policies, thought we were insane for exporting so much of our manufacturing.

This policy was part of trade agreements - such as NAFTA with Canada and Mexico - that supposedly benefitted all parties. To what extent the third world countries benefit is a big question. The economic stimulus to these countries' industrial development and wealth may be positive statistically, but new wealth in a third world feudal society of corruption and bribery is not uplifting the general population. Working conditions in these countries, in lieu of fair trade standards for workers, were/are commonly brutal, approaching slavery, inducing suicides. Most everyday articles they produce are marketed on the basis of lowest price. I know that I am guilty of perpetuating marginal wages and living conditions for third world workers when I pay the low prices of goods imported from these countries.

There are several fundamental problems associated with this scenario. What drives it is the insatiable appetite for consumption by the American public and others that aspire to similar values, who pursue the ever-new fashions of living. This appetite is fed by the pervasive advertising that surrounds us, ceaselessly competing for our attention until the typical consumer absorbs the message into his subconscious. The manufacturers' goal in searching out new frontiers of business is ever-expanding production, regardless of social ills they cause, and which in the long run, has a devastating effect upon our environmentally challenged world.

The trade problems we have are basically of our own making, as are other related problems such as economic and war refugees. We could improve the balance of trade by bringing back exported manufacturing to our shores - which, I understand, is beginning to happen on a very small scale - together with limiting or excluding cheap imported versions of whatever we can manufacture here. (Let third world countries make the things they need - not what we want, when the profits of their productivity go overseas.) This will involve our paying higher prices for things, but that is appropriate for several reasons.

First, it would tighten our consumer budget, which would put a damper on our runaway production, thus improving the environment. It could create more and better jobs at home - IF the higher prices were distributed as wages, not excessive profits. It might also tend to eliminate the preposterous redundancy of products by competition for quality and simplicity instead of price. The ultimate good could be to reduce our dependency on consumerism with its addictive pursuit of the materialistic life beyond essentials in exchange for better social, cultural and educational programs.

If we - our home-based corporations - are out to conquer the world of commerce, they are inevitably going to get ensnared in foreign complications such as with China today. Only when international trade can be monitored and regulated by universal ethical standards that assure mutual benefits to manufacturers, workers, and consumers (people), while protecting the environment, will there be anything like true fair trade. To achieve this purpose, it may require radical transformations not only in the field of commerce, but in societies and world organization.

(For further discussion related to this topic, see my article "The Case For Human Economics" Parts ! & 2, posted on OpEdNews December 16, 2016.)

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Veteran, retired from several occupations (school teacher, technical writer, energy conservation business, etc.) long-time Sierra Club member

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