Today has been touted as a day that will change politics forever. In just a few hours we will discover who will be the next president of the United States of America and in turn how the world’s biggest economy will view trade with the rest of the planet. The Channel Group’s US team have been following the candidates closely and here is a quick rundown of the two candidates’ policies on trade.
Trump on trade
Donald Trump has a seven-point plan for how he will transform America’s trade policy. The plan, if fully implemented would lead to the collapse of TPP and calls the existence of NAFTA into question. Trump’s plan is likely to severely damage relations with China as he seeks to implement protectionist policies and return jobs and manufacturing to the US that has gone offshore.
Trump’s seven-point plan is:
- Withdraw from the Trans-Pacific Partnership, which has not yet been ratified.
- Appoint tough and smart trade negotiators to fight on behalf of American workers.
- Direct the Secretary of Commerce to identify every violation of trade agreements a foreign country is currently using to harm US workers, and also direct all appropriate agencies to use every tool under American and international law to end these abuses.
- Tell NAFTA partners that the US intend to immediately renegotiate the terms of that agreement to get a better deal for US workers. If no agreement is reached, the US will submit notice that it intends to withdraw from the deal. Eliminate Mexico’s one-side backdoor tariff through the VAT and end sweatshops in Mexico that undercut US workers.
- Instruct the Treasury Secretary to label China a currency manipulator.
- Instruct the U.S. Trade Representative to bring trade cases against China, both in this country and at the WTO. China’s unfair subsidy behaviour is prohibited by the terms of its entrance to the WTO.
- Use every lawful presidential power to remedy trade disputes if China does not stop its illegal activities, including its theft of American trade secrets – including the application of tariffs consistent with Section 201 and 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962.
Clinton on trade
Hillary Clinton has historically been pro-trade, both instrumental in the TPP discussions and a supporter of NAFTA. But due to the trajectory of the campaign, she has been forced to turn towards a protectionist attitude on trade. Clinton having negotiated much of TPP is now claiming not to support it and is also planning to restrict the ability of companies to operate offshore. The key messages from Clinton’s Campaign are:
Strengthen American manufacturing through a $10 billion investment in “Make it in America” partnerships that bring together workers and labour, business, universities, community colleges, and government at every level to harness the strength of manufacturing communities across America. Businesses that take part will pledge not to shift jobs or profits from these partnerships overseas. Support strong “Buy American” standards.
Prevent countries like China from abusing global trade rules and reject trade agreements that don’t meet high standards. Hillary will strengthen American trade enforcement so that the US stands up to foreign countries that aren’t playing by the rules–like China is doing right now with steel—and fight for American workers. She will say no to trade deals, like the Trans-Pacific Partnership, that do not meet her high standard of raising wages, creating good-paying jobs, and enhancing our national security.
Revitalise the hardest-hit manufacturing communities by creating tax incentives to encourage investment in communities that have faced or are about to face significant manufacturing job losses.
Crack down on companies that ship jobs and earnings overseas and create incentives for companies to bring back jobs to the U.S.
Invest in America’s manufacturing workforce to ensure that it will always be the best in the world. Hillary will expand apprenticeships and training so the US manufacturing workforce is always the best in the world.
Whichever candidate ends up winning today’s election, it is likely that America’s trade policy will shift dramatically towards protectionism. This will be immensely damaging to the American economy, causing further job losses and increasing resentment within communities who feel ignored by the establishment. The Channel Group urges the successful candidate to review their policies after the heat of the election has died down. The arguments for free trade will need to be made again, but we are sure that the strong benefits will be welcomed by the USA once again.