let<u+2019>s take donald trump<u+2019>s trade policies at face value. if he is elected, <u+201c>the era of economic surrender will finally be over,<u+201d> trump declared, repeating a favorite theme in a july speech in monessen, pa., once the heart of the state<u+2019>s steel industry. <u+201c>i want you to imagine how much better your life can be if we start believing in america again.<u+201d> as the world knows, trump<u+2019>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 wrote last week : trade comes with no assurances that the spoils will be shared equitably. across much of the industrialized world, an outsize share of the winnings has been harvested by people with advanced degrees, stock options and the need for accountants. ordinary laborers have borne the costs and suffered from joblessness and deepening economic anxiety. policy makers and politicians, goodman writes, failed to plan for the trauma that has accompanied the benefits of trade. when millions of workers lost paychecks to foreign competition, they lacked government supports to cushion the blow. as a result, seething anger is upending politics in europe and north america. along these lines, trump has successfully appropriated an issue <u+2014> the distributional impact of free trade <u+2014> that was, in recent years, the turf of democrats. on sept. 30, rex nutting, a columnist at marketwatch.com , wrote <u+201c> how donald trump hijacked the democrats<u+2019> best issue <u+201d>: the story of trump<u+2019>s amazingly successful movement is also the story of how democrats turned their backs on their working-class roots and sided with the elites on the crucial economic question of our times: who would win from globalization, and who would lose? the downside of trump<u+2019>s trade policy proposals is, however, considerable. trump<u+2019>s protectionist policies would negatively affect overall american economic performance and further aggravate the harsh distributional consequences of globalization for just those workers who support him. gordon hanson, an economics professor at the university of california, san diego, emailed me his analysis of trump<u+2019>s economic scheme: trump<u+2019>s strategy is essentially one of withdrawal from the world economy. he wants less trade and less outward foreign investment. he offers no plans for how to improve our export performance. this is protectionism, pure and simple. erik brynjolfsson, an economist at m.i.t.<u+2019>s sloan school of management, was more forceful: no nation can succeed by trying to protect the past from the future. we will succeed by having the confidence to embrace competition, and leveraging our comparative strengths, which are numerous. we have the largest, most productive and most technologically advanced economy that<u+2019>s ever existed on this planet. the more open the world economy is, the more we have an opportunity to leverage our many strengths. looked at this way, trump<u+2019>s stance is an implicit admission that he and his followers do not <u+201c>believe in america<u+201d> <u+2014> 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<u+2019>s trade proposals, reich argues, assume the u.s. can<u+2019>t compete and must erect trade barriers lest other countries flood america with better and cheaper products. that<u+2019>s the opposite of believing in america. on jan. 7, trump told the new york times that he would impose a 45 percent tax on goods imported from china. <u+201c>i would tax china on products coming in,<u+201d> he told the paper<u+2019>s editorial board. <u+201c>the tax should be 45 percent.<u+201d> when ford proposed building new manufacturing facilities in mexico, trump declared in a september 2015 speech that he would call the president of ford and tell him: i don<u+2019>t want you to do that. and if you do it, you<u+2019>re not going to have any cars coming across the border unless you pay a 35 percent tax. trump said the same thing in march after the carrier corporation announced plans to move air-conditioning production facilities to mexico: i<u+2019>m going to tell the head of carrier: <u+201c>i hope you enjoy your stay in mexico folks. but every single unit that you make and send across our border, which now will be real, you<u+2019>re going to pay a 35 percent tax.<u+201d> andrew mcafee, a director of m.i.t.<u+2019>s initiative on the digital economy and co-author of <u+201c>the second machine age: work, progress, and prosperity in a time of brilliant technologies,<u+201d> was sharply critical of trump. in an email, mcafee wrote: there<u+2019>s a reason that all good economists support free trade, and that none of them are supporting trump<u+2019>s proposals. the reason is that trade gives us more and better access to goods and services than we could produce on our own. it also provides jobs for exporters, people working in airports and ports, and so on. free trade is not surrender, and not something that only suckers do. in fact, just the opposite. closing our borders would be surrender to a nonexistent enemy. it would make us poorer without bringing back the jobs. sean wilentz, a historian at princeton, contends that trump<u+2019>s proposal is only slightly less drastic than the smoot-hawley tariff <u+2014> a law passed over the objection of more than 1,000 economists and signed by herbert hoover in june 1930. smoot-hawley is largely acknowledged as one of the principle causes of the subsequent worldwide economic catastrophe. in an email, wilentz wrote: smoot-hawley raised tariffs across the board, with every trading partner. the results were disastrous for the world economy, let alone for the u.s. at the opening stage of the great depression. a worldwide trade war commenced, and international trade was shattered. trump so far has proposed only sharp tariff hikes with mexico and china <u+2014> but these are two of the three largest sources of u.s. imports. if the tariffs on goods produced in mexico and china were enacted, the results, in wilentz<u+2019>s view, would be <u+201c>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.<u+201d> ( canada is no. 1.) many economists share the view that trump<u+2019>s trade proposals would be ruinous to the american economy, but in order to retain union support, hillary clinton has not been able to directly challenge trump on these grounds. it was sanders<u+2019>s primary campaign that prompted clinton to abandon past support for free trade agreements. in october 2015, clinton declared her opposition to the trans-pacific partnership, a reversal from her 2012 position that the tpp set <u+201c>the gold standard<u+201d> for trade agreements. the general shift on the left and right toward contesting free trade agreements poses substantial dangers to the american economy. <u+201c>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,<u+201d> daron acemoglu, the lead author of the research paper <u+201c>the race between machine and machine<u+201d> and an economist at m.i.t., wrote by email. once the advances in robotics are achieved, acemoglu wrote, many of the tasks now offshored to china or other low-wage economies can be performed even more economically by robots in the united states. this won<u+2019>t bring back the semi-skilled jobs that have left (and gone for good whatever trump says he will do) but might just ensure that a whole slew of non-production jobs and supporting production jobs surrounding these tasks locate back to the united states. both clinton and trump, in acemoglu<u+2019> s view , are failing to address how we need to adjust in the face of the next wave of technologies of automation, robotics and artificial intelligence, which will likely increase our productivity but require huge adjustments on the labor side. without careful preparation , acemoglu wrote, this adjustment will take the form of large declines in employment and pervasive joblessness. if we are prepared, we have a chance of turning it into more impressive productivity improvements and shared gains. dani rodrik, an economist at harvard, pays careful attention to the price of globalization. he has warned that what he calls <u+201c> hyperglobalization <u+201d> can undermine democracy and he has stressed the costs imposed on <u+201c>many working families<u+201d> that <u+201c>have been devastated by the impact of low-cost imports from china and elsewhere.<u+201d> that said, rodrik has no enthusiasm for trump<u+2019>s proposals. in an email, rodrik wrote: trump has a vastly exaggerated sense of the contribution of trade and trade policy to the decline of manufacturing in the u.s. in terms of real manufacturing output, the u.s. has actually done pretty well. in the case of manufacturing employment, however, rodrik argues that there is virtually nothing you can do with trade policy <u+2014> short of stopping technological change <u+2014> that is going to bring substantial manufacturing employment back to the u.s. i asked lawrence summers , a former secretary of the treasury and an economist at harvard, about trump<u+2019>s proposals to levy heavy taxes on imports from china and mexico. he replied in a phone interview: <u+201c>they are lunatic.<u+201d> he noted that every time trump<u+2019>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: the inadvertent consequence has been that we are today running a trade deficit that is tens of billions of dollars worse because of the destabilization of the mexican peso. if the united states were to impose a 35 percent tax on mexican imports, according to summers, the economies of both countries would suffer: it would be one of the best things that ever happened for asian and european competitors. even one of the most outspoken and effective opponents of past free trade agreements, lori wallach, the director of public citizen<u+2019>s global trade watch, rejects trump<u+2019>s approach. in a sept. 22 essay written with jared bernstein, <u+201c> the new rules of the road: a progressive approach to globalization ,<u+201d> the two write: globalization isn<u+2019>t going away. the first thing to realize is that, despite trump<u+2019>s nostalgia for a bygone era when the united states was insulated from global trade, stopping or slowing trade is not at issue. worldwide, trade has <u+201c>grown from 25 percent of global g.d.p. in the mid-1960s to 60 percent today,<u+201d> 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 <u+201c>rules of the road<u+201d> that protect the economic needs of low- and middle-income families while preserving the democratic, accountable policy making processes that are essential to creating and maintaining the environmental, consumer, labor, and human-rights policies on which we all rely. trump<u+2019>s trade proposals reflect his bullying style and his technologically uninformed approach to tackling america<u+2019>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<u+2019>s innovative potential to master the emerging transnational future , the contribution of diversity to america<u+2019>s global position and the need for far more muscular government intervention to address the uneven burdens of trade. 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. follow the new york times opinion section on facebook and twitter (@nytopinion), and sign up for the opinion today newsletter .
global trade war, trump edition
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