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OpEdNews Op Eds    H3'ed 7/21/16

Trump's Trade and Tax Theories are Seriously Flawed

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A recent acquaintance wrongly assumed that I support Donald Trump's candidacy for president because I chair the Made In the USA Foundation. I don't support any candidates for public office.

Mr. Trump's fundamental trade position is that the United States has been out-negotiated by China, Mexico and Japan. This is not the real cause of our trade imbalance. Our trade deficit has not been caused by Chinese or Mexican companies, it has been caused by American companies going offshore and an American tax system that encourages it.

American companies, from General Motors to Carrier air conditioning to Johnson & Johnson and Pfizer are the problem. Remember that U.S. taxpayers saved GM from going out of business. While we were saving GM, it moved production of the Cadillac SRX to Mexico and the Buick Regal to Germany. After costing the U.S. government more than $10 billion, GM is now importing Buicks from China, South Korea and Poland. At the same time Mercedes Benz and BMW have been ramping up their U.S. auto production.

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Johnson & Johnson make all of its Band-Aids in China and Brazil. No trade deal encouraged them to go offshore, only cheap labor. It is interesting that most private label "band aids" are made in the United States.

Carrier is moving air conditioner production from Indiana to Mexico. Carrier is moving there for cheap labor. Our tax system allows Carrier to deduct the cost of moving production offshore from its U.S. income taxes. This practice must be stopped. Our tax code should not encourage greedy companies to move production offshore.

Trump is Part of the Problem

We don't need better negotiators; we need better laws and more loyal companies. There are not many businessmen less loyal to the U.S. than Donald Trump and his family. Not only are his hotels filled with imported furnishings; his Trump suits, shirts and ties are all imported. Harvard Trade and Investment Professor Robert Lawrence did an investigation of Trump-branded merchandise advertised on Trump.com and found that products made in the U.S. are the exception and not the rule. Most of the Trump neckties, shirts and suits are made in China, Bangladesh, or simply say "imported." And virtually all of his daughter Ivanka Trump 's extensive clothing and accessory line for women is made outside the U.S., with many items manufactured in China.

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Chairman, Made in the USA Foundation, economist and lawyer, author of ten books and hundreds of articles.
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