What Is Behind Trump’s Economic Policy?

Businessman and presumptive Republican nominee for the U.S. Presidential elections, Donald Trump, have ‘America First’ ideals. One of his ‘America First’ economic policies tries to correct the trade imbalance in order to protect employment in the U.S. He plans to raise customs taxes for China and Mexico, and to have a renegotiation of the TPP.


What is behind these demands?

A large factor is the decreasing employment rate in the U.S. due to competition with other countries. According to the U.S. Bureau of Labor Statistics the employment rate of 17.3 million people employed in the American manufacturing industry in April 2000 dropped to 12.32 million in April 2015.

In an interview on the PBS channel (broadcast April 21st), American international economist Thea Lee said that the U.S. has not had a pay-raise in 40 years, and that Americans are working harder than ever but they are just able to make a living: it is primarily a trade issue. She also claimed that consumers’ ability to buy things more cheaply isn’t helping raise the employment rate. Workers are facing this problem everyday.

Low prices are not helping the employment rate, and there is an example that serves as evidence for this. It is China’s economic policy that Trump has been referring to as an example of trade imbalance.


China Has Sought Growth to Damage Other Countries

Since Deng Xiaoping’s open market reforms, China’s economy expanded by two digits in the 34 years through 2012. Their GDP has risen to US$11 trillion, which is about 60percent of the U.S. GDP of US$18 trillion.

Unlike the U.S. where 70% of the GDP consists of private consumption, however, China has invested close to 70% of their GDP to advance the production system that allows them to continue making cheaper products. China has thus ignored the wellbeing of people and is merely seeking growth purely in order to increase exportation, make cheaper products and dumping their overseas trade partners by causing huge damage to overseas industries.

The prerequisite credo in capitalism is that the market thrives upon healthy competition. China has spent the last 40 years establishing a dumping system that is far from justice. Some critics think that China’s GDP will be the world’s highest by 2025, but this would be the result of ignoring the rules: a future where capitalist justice is annihilated.

As Trump has said, if we leave China’s warped economic system alone and simply accept them as an exporting superpower, it will deprive employment not only in the U.S. but also in Japan and Europe: it will signify the downfall of the capitalist system. President Obama has been friendly with China, seeking to maintain civil relations and avoid making an enemy out of them, but if Trump becomes President the system could make a complete turnaround.


Healthy Competition Brings Wealth to the World

At the same time we cannot just worship Trump’s ideals. Trump’s methods of attacking free trade might make the people of America start to oppose his policies..
Trade is a system where, ideally, each country presents its strongest services and products to buy and sell with other countries establishing a win-win relationship. Sometimes people lose in this healthy sort of competition. To claim that result disparity is wrong, however, is ignoring justice in economics. We must not forget the privilege of prospering in a free trade environment through healthy competition and rivalry in the marketplace.

As Trump claims, we cannot contribute to globalism at the expense of the profits of one’s own country, but we have to learn to accept the results as the outcome of some healthy competition. Otherwise the market cannot function.

With regard to the TPP, it is a counterplan to China’s encirclement network. In the U.S., IT-related groups, such as Google, have written open letters to the Presidential nominees urging the enactment of TPP.

Maintaining a free trade system based upon healthy competition and rivalry will increase wealth in the world. We must remind the U.S. and the EU of this truth, and also push to establish the TPP. Japan must become a leading investor through banks such as the Asian Development Bank, to create an economic region throughout Asia. This will serve to help prevent the world economy from collapse.

(Hanako Cho)

What Is Behind Trump’s Economic Policy?
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