Donald Trump’s Detroit Ignorance on Trade

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Detroit, Michigan is where Donald Trump manifestly proves beyond doubt that his hate of Mexico and Mexicans overrides any good economic sense he might otherwise have — what with his “C” grades at the University of Pennsylvania.

Addressing the Detroit Economic Club he attacked the North American Free Trade Agreement (NAFTA) and blamed it for Detroit’s decade’s long demise as an economically vibrant city centered on car manufacturing.

Apparently, he is unaware of superior Asian car manufacturing that out-competed Detroit on so many levels since the 1960s. He is also unaware that Detroit and Michigan sell $12.17 billion worth of goods and services to Mexico and that over 175,000 Michiganders work in trade with Mexico.

Donald Trump proves he learned nothing about economics or trade in his two years at the University of Pennsylvania when he attacks NAFTA like he does.

Facts: NAFTA trade with Canada and Mexico from the U.S. Chamber of Commerce, April 17, 2015, “The NAFTA You Never Knew” by John Murphy, SR VP International Policy and Neil Herrington”

  1. Mexico and Canada combined bought $552 Billion worth of goods and services from the U.S. in 2014 …
  2. Canada is the number one importer of American goods in the world . . . Mexico with 122 million people buys twice from the USA than what China buys; it has a billion more people than Mexico…
  3. U.S. has a $21.6 billion trade surplus in manufactured goods with Canada and Mexico …
  4. The U.S. has a $45 billion trade surplus in services with Canada and Mexico …
  5. 2014, Canada and Mexico combined bought $486 billion worth of manufactured products from the U.S. …
  6. Canada and Mexico bought $20 billion in agricultural products from the U.S. in 2014 …

The trade deficit with Mexico in 2014 was minus $53 billion while it was minus $37 billion with NAFTA partner Canada and whopping minus $73 billion with non-NAFTA and WWII enemy Germany.

Why isn’t Trump demanding a new trade deal with Germany? Using Trump’s measures, Germany is ripping us off, stealing our resources and doing so criminally. And this rip-off isn’t new.

In 2014, Germany bought a piddling $49 billion worth of goods and services from the U.S. while selling us $124 billion worth of German goods. In the first six months of 2016, we have already accumulated a trade deficit with Germany of $32 billion worth. Where is Donald’s scream of “rip-off?”

NAFTA partners Canada and Mexico bought $486 billion worth of manufactured goods from the U.S. while Germany bought a tiny $49 billion worth of all goods and services from the U.S.

Donald Trump says nothing about the Giant German rip-off. He only picks on Mexico; he doesn’t even mention Canada, our other NAFTA partner. He doesn’t mention Ireland with which we have a $33 billion trade deficit; or Italy with which we have a $23 billion trade deficit. Nor does he mention Poland, Great Britain, Portugal, Spain and even Trump’s wife’s Slovenia sells us more than we sell them.

What’s wrong with our trade? It’s the dollar, Mr. Trump, not rip-off trade agreements. Dollar strong, we sell less. So what does Trump want, a weak dollar?

Does he even know the difference between a strong and weak dollar?

As long as Donald Trump rips Mexico and Mexicans for our upside down trade with Mexico and Mexicans and ignores Germany’s giant rip-off of the U.S. he can’t be taken seriously on trade.

He should also enroll in a community college so he can learn that the trade deficit with Mexico, Canada and all other countries is not a deficit paid to the Mexican, Canadian or any other government.

Thousands of American countries sell goods and services to thousands of Mexican companies. Thousands of American invoices are paid by thousands of Mexican business with checks drawn on banks or wire transfers. The Mexican peso floats against the dollar. The dollar is strong while the peso is weak. It’s a wonder the trade deficit isn’t larger. Look at the one we have with Germany that hardly buys anything from the U.S. Trump needs an education on trade and currency. After he loses the election he should enroll in a community college to learn about trade. I’ll pay his tuition. ###

 

Raoul Lowerey Contreras’ newest book –Murder in the Mountains– (Floricanto Press, May 2016) is available at Amazon.com.

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