RAPAPORT… President Trump’s trade policy is based on his principles of “America First” and “Reciprocity.” America must use its purchasing market power to ensure reciprocal benefits from trade partners. Those who do not reciprocate, should not be given free access to our markets.
Previous administrations sought to expand international trade by freely opening U.S. markets to groups of multinational trade partners. By exporting jobs and prosperity, America hoped to buy world peace and increase foreign demand for sophisticated American products. While this may have worked for many years, the current reality is that America is getting a bad deal.
Deals with countries like China are unbalanced. America exports jobs and prosperity to China. In return it gets strategic military threats in the form of aircraft carriers, fake islands and claims to the South China Sea. Should the U.S. be supporting those who stand against it? Shouldn’t the U.S. use its market power to demand reciprocal relationships that support strategic “America First” interests?
Trade policy is more complex as it interacts with domestic policy. Free trade is not free when it costs American jobs. While cheap imports may feel good, they reduce jobs whose wages fuel the U.S. economy. “America First” means American jobs must sometimes come before cheap imports even if that means higher prices.
So trade policy is not just about trade. It’s about jobs, prosperity, prices, national security, and a host of other social, economic and political factors. Presidential management of trade policy must be balanced, centralized and coordinated in the face of powerful competing interests. Trade policy decisions should be based on President Trump’s principles of “America First” and “Reciprocity.”
Martin Rapaport
Chairman
RAPAPORT
Addendum:
Multinational Trade Agreements
President Trump’s bilateral trade policies may conflict with existing multinational trade agreements. Such agreements require everybody to agree with everybody about everything. They destroy U.S. ability to create effective bilateral trade agreements that optimize the value of its market power. It’s time for the U.S, to review the benefit of multinational trade agreements and U.S. membership in the World Trade Organization (WTO).
