Trump does not understand trade, Jo Jorgensen does

Jo Jorgensen on Trade

Several of my readers have asked me "What is Jorgensen's trade policy? Is she really Libertarian?"

Let's take a look at Jorgensen on Trade and Immigration.

Five Key Ideas

1. History shows that peaceful commerce prevents conflict. When goods don’t cross borders, troops do. 
2. This Republican administration has raised prices for Americans, provoked retaliatory tariffs, and harmed American industries. Meanwhile, his opponent in the Democratic Party promises more of the same protectionism. I am the only free trade candidate for president.
3. Protectionism has been tried before and has been shown time and again to lead to lower productivity, more unemployment, and higher inequality.
4. It is true that other countries have imposed trade barriers. But reflexively adding barriers of our own as retribution harms no one but ourselves. Higher costs are simply passed on to consumers and workers in the name of this economic nationalism. Tariffs are nothing more than another tax.
5. As President, I will dismantle all tariffs and any other trade barriers which prevent the flow of goods and services into our country. 

Those are Jorgensen's precise words. I put numbers to what I believe are the 5 key ideas, adding emphasis to points 1, 3, 4, and 5.

My Take

• The first country that implements free trade coupled with low or no corporate taxes, regardless of what any other nation does, will see a boom in capital, growth, and jobs. 
• Fair trade is free trade, nothing else.
• Corporations that hide behind fair trade excuses want protectionism, handouts, and higher prices for their own benefit, not the benefit of US consumers. 

Manufacturing Jobs

Trump Promised to Bring Back Manufacturing Jobs: How is He Doing?

Trump's trade war with China had the expected results. This happened well before Covid hit. 

Trade Wars are Good and Easy to Win

In March of 2018 Trump boldly announced in a series of ridiculous Tweets "Trade Wars are Good and Easy to Win". 

Trump Blames Nafta

Trump blames NAFTA. But US manufacturing peak employment occured 15 years earlier. 

Robots have replaced people leading to greater productivity.

Increased productivity means more goods at lower prices to the benefit of all. 

Fed Fights Productivity

The Fed has foolishly waged a battle on productivity and lower prices creating stock market bubbles and excess inequality on top of it. 

Nixon Closed Gold Window

Trump wants to reduce the trade deficit but the cause of consistent deficits dates to Nixon closing the gold window on August 15, 1971.

Balance of Trade vs Gold Window

The Census Department changed the way they reported the balance of trade in 1992, dropping the old method entirely in 2014. 

However, a chart of both methods clearly shows what happened. 

Trade deficits prior to 1971 were self-correcting. They clearly are not self-correcting now. 

There is considerable debate among economists as to whether the current trade deficit is even meaningful, but Trump is not going to solve anything via his policy of tariffs.

One Candidate Understands Trade

One candidate and one candidate alone has a grasp of good trade policy.

That candidate is Jo Jorgensen. 

Like Jorgensen, I am strongly anti-war and strongly free trade.

As Jorgensen accurately states, "When goods don’t cross borders, troops do."