Some Bernie Sanders supporters have switched their allegiance to Donald Trump following Sanders’ loss in the Democratic primary, and they almost always point to trade as the reason why. The argument is pretty straightforward: Bernie Sanders and Donald Trump are both opposed to the trade deals and globalization that have shipped American jobs overseas and hurt American wages.
That part is true, both Sanders and Trump do critique America’s trade deals. Their solutions, however, are very different. Bernie Sanders’ solution is to remove the corporate influence that goes into writing these agreements and rewrite them with protections in place for American workers. He wants to strengthen labor unions and punish corporate tax dodgers, but in the end he acknowledges global trade is an important component of our economic success.
Trump wants to throw the baby out with the bathwater. He’s suggested both withdrawing from NAFTA, America’s biggest and most important trade agreement with both Canada and Mexico, and raising tariffs on China. Trump’s proposals follow the traditional Mercantilist economic theory of protecting American goods and labor from foreign competition.
“Our politicians have aggressively pursued a policy of globalization — moving our jobs, our wealth and our factories to Mexico and overseas. Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache.”
Trump has a strangely deep hatred for China
Trump has, in the past, suggested putting a 45 percent tariff on imports from China “if [it] does not stop its illegal activities, including its theft of American trade secrets.” Trade between the United States and China is vital to both of our economies. China’s economic boost in recent decades has largely come from increasing manufacturing for foreign markets, namely the United States. We also benefit from an increase in Chinese manufacturing. In 2015, Americans purchased $481.9 billion in Chinese goods.
Starting a trade war with our biggest trading partner, as Trump has suggested he’s willing to do, would hurt citizens in both countries and the poorest would feel the worst economic pain.
NAFTA plays a vital function for all three member countries
“I’m going tell our NAFTA partners that I intend to immediately renegotiate the terms of that agreement to get a better deal for our workers. And I don’t mean just a little bit better, I mean a lot better. If they do not agree to a renegotiation, then I will submit notice under Article 2205 of the NAFTA agreement that America intends to withdraw from the deal.”
Withdrawing from NAFTA would be an even bigger disaster. Sure, NAFTA shipped some important American manufacturing jobs away, but withdrawing isn’t going to bring them back. A lot of automation has occurred in the last 26 years to replace manufacturing. Detroit won’t suddenly reopen its auto plants, free from global competition, because Trump decides he doesn’t like Canada and Mexico.
NAFTA is a huge deal for United States, Mexico, and Canada. Totaling imports and exports, the aggregate goods and services traded under the domain of NAFTA amounts to more than $1 trillion.
Many argue that global trade deals hurt the working class of America, and there’s some sound evidence to back up that assertion. The argument that trade deals should be restructured and renegotiated to protect and strengthen American labor are reasonably convincing. That being said, withdrawing from a major treaty that facilitates hundreds of billions of dollars’ worth of goods because your partner doesn’t agree to your exact terms, or starting a trade war due to a conspiracy theory, would hurt American workers, not help them.
While there are plenty of arguments to be made about the deficiencies of global trade, particularly in how they hurt the working class, withdrawing from trade completely and returning to protectionist policies would devastate the global economy.