President Trump: Making Trade Fair Again

Trade Policy in America

The U.S. Census Bureau records show that America has been involved in international trade since 1895. Their records also reflect America had a continuous trade surplus through 1971. In modern times, our first trade deficit was recorded in the 2nd quarter of 1971 at 192 million dollars.

Two terms used when discussing the results of international trade are surplus and deficit. Whenever trade is discussed, these two terms are tossed around to give one impression, then another. However, does anyone really understand what they mean? Trade Surplus occurs when we are exporting more than we are importing. Trade Deficit is when we are importing more than we are exporting.

Investopedia.com puts it in these terms: "GDP increases when the total value of goods and services that domestic producers sell to foreigners exceeds the total value of foreign goods and services that domestic consumers buy, otherwise known as a trade surplus. If domestic consumers spend more on foreign products than domestic producers sell to foreign consumers – a trade deficit – then GDP decreases."

The U.S. Constitution specifies the responsibility of government to manage our nation's international trade. Article II places the responsibility for spending and regulating the debts of the nation with Congress. Article I gives the President the responsibility to enter into treaties with foreign nations with the support of the Senate. Where we are today with President Trump beginning a businessman's approach to international trade is a reflection on our nation's history, 1971 to present.

A Brief History

In 1971, President Nixon changed course on our international trade through two concurrent actions. First, he removed controls on trade regarding foreign currency exchanges, decided post WW2, in Betton Woods, Vermont. Secondly, he removed the tangible (gold) backing of U.S. currency and placed our money in a fiat currency status, meaning the value of our money would then be based on the faith and credit of the government of the United States.

The Reorganization Act of 1977 provided President Carter the authority to create the Office of Personnel Management, the Merit Systems Protection Board, and the Federal Labor Relations Authority. Presidents use their knowledge and experiences to provide America our best footing in international trade. To gain efficiencies in our export and importing trade, it is sometimes necessary to adjust both the international and domestic stance.

In the span between these Presidential actions, Congress enacted the Trade Act of 1974 to make industry more competitive, provide fast-track authority for the President to negotiate trade agreements, and to counteract unfair foreign trade practices. This legislation has been continuously in effect and most recently enacted on February 24, 2016.

Regarding International Trade Today

Currently, the Office of the U.S. Trade Representative's website lists 20 nations with whom the United States has free trade agreements. Additionally, we are partners of the North American Free Trade Agreement (NAFTA), Transatlantic Trade and Investment Partnership, and we are formally withdrawn from the Trans-Pacific Partner (TPP), presently.

February 28, 2018, U.S. Trade Representative Robert Lighthizer, released President Trump’s Trade Policy Agenda and Annual Report. The report outlines how the Administration is promoting free, fair, and reciprocal trade and strongly enforcing U.S. trade laws.

The President’s Trade Agenda and Annual Report outline 5 points toward negotiating a better international trade, strengthening our economy, supporting our national security, enforcing our trade laws, and reforming the World Trade Organization. Speculation in the media is that President Trump is changing his position on TPP.

Hardly A Change Of Position

On April 12, 2018, the President Tweeted, "Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!" This tweet was on the eve of the Summit of the Americas.

Recently the eighth Summit of the America's was held in Lima, Peru where Vice President Mike Pence attended on behalf of our government. On April 18, 2018, on the Vice President's Facebook page he states: "Now is the time for the nations of the Western Hemisphere to truly become a ‘Hemisphere of Freedom.’ That’s why the United States stands with the people of Cuba and Venezuela - and stands up to their oppressors."

It is in the President's understanding of international trade and how its balance impacts our GDP whether it is a surplus or a deficit. Trade war? Not exactly. It is in the negotiating and balancing of our nation's needs and wants with our trading partner's needs and wants. President Trump has never wavered from an America First policy, and it extends to his dealings in foreign trade.

Fred Warner / Writer

I think therefore I write. As an American Patriot intrigued with the wisdom of 1776, I believe a Mastermind created our nation’s governance of the people by the people, for the people.
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