Mark Twain famously observed that
There are three kinds of lies: lies, damned lies, and statistics.
To that we should add a fourth kind of lie:
Lies about international trade!
There is an amazing amount of false information spread by politicians and special interest groups about the supposed damage to the United States economy caused by international trade. This blog is my attempt at countering these myths with easily understandable explanations.
The U.S. has opened itself up to trade from other countries more than any other advanced economy. This is hurting the middle class and factory workers. (Politicians such as Bernie Sanders and Donald Trump frequently make this claim.)
China is exporting hundreds of billions of dollars of goods more to the U.S. than the U.S. exports to China. This unfair trade balance, caused by “clueless” U.S. trade negotiators, is killing jobs in the U.S. (Politicians such as Bernie Sanders and Donald Trump make this argument. Trump would impose a high tariff on imports from China and then renegotiate with the Chinese to correct the imbalance.)
Trade Myth 3
Trade Agreements are bad for American workers. Trade agreements such as NAFTA and Permanent Normal Trade Relations with China have resulted in the loss of millions of American jobs. (This is Bernie Sander’s argument, and he has consistently over the years followed the lead of certain trade unions in opposing all international trade agreements.)
The North American Free Trade Agreement (NAFTA) is a “disaster” and should be either repudiated or renegotiated. Tariffs should be imposed to stop companies like Ford and Carrier from building autos and air conditioners in Mexico intended for the U.S. market. (This is Donald Trump’s long-standing argument, which echoes Ross Perot’s opposition to NAFTA 25 years ago.) Bernie Sanders argues “NAFTA cost us 800,000 jobs nationwide.”