(ThyBlackMan.com) This week we saw President Donald J. Trump become the greatest defender of free trade in our nation’s history.
At the beginning of the week, the president announced the U.S.-Mexico-Canada Agreement to replace the disastrous North American Free Trade Agreement, NAFTA.
This assures his re-election two years from now.
The 25-year-old NAFTA was a template for globally managed trade by corporate-government cartels. It had American taxpayers footing the bill for corporations to build global supply chains and outsource jobs to the Third World. No more.
Under the new USMCA, access to the U.S. market is tied to respect for American rules and standards, from protection for intellectual property to higher wages.
It requires three-quarters of the components in automobiles entering the U.S. duty free be made in North America, with a good percentage made by workers earning American wages.
The agreement removes tariff and regulatory barriers that hurt American farmers, and it will open markets for more American ag exports. It requires Canada to pare back subsidies and quotas on dairy.
The “new Nafta” prevents China from using Mexico or Canada to transship ill-gotten goods into the U.S.
President Trumps understands that Communist China undermines free markets and distorts world commerce. Should Mexico or Canada enter into a trade deal with China or other non-market economy, the United States can withdraw from the USMCA.
But that’s only half the story.
After putting relations with our North American neighbors on a strong, principled footing, President Trump took on China, the most protectionist nation on the face of the earth.
Beijing has inflicted more damage to the world trading system than U-boats did to the North Atlantic merchant marines.
China has violated every commitment it made when it joined the World Trade Organization.
It maintains cliff-high tariffs to keep American goods out even as it exploits low tariffs on its exports to the U.S. It subsidizes politically connected companies so they can undersell and bankrupt competitors that play by free-market rules. It blackmails American corporations to lobby Washington for Beijing’s Communist rulers, threatening to withhold licenses and regulatory approvals if they don’t comply. It steals industrial and military secrets on a wholesale scale.
Vice President Mike Pence denounced China’s predatory trade practices and its attempts to interfere with American elections and academic freedom. Too often, Western corporations, blinded by the allure of profits or cowed by the threat of retaliation, willingly assist Beijing’s totalitarian project. Vice President Pence called on Google to immediately abandon its Dragonfly project, a censorship/surveillance application that would allow China’s Red bosses to gag and blindfold its citizens.
The same day, the administration announced the release of its report detailing how China’s trade cheating threatens industries vital to our national security with extinction.
Effete academics, ensconced in ivory towers, resting on chairs endowed by global corporations that collaborate with Communist dictators, preach their pet theory of so-called free trade.
President Trump knows what it takes for free trade to work in the real world.
For that, he turns to Adam Smith.
Smith’s seminal tome the “Wealth of Nations” lays out the case for President Trump’s trade policies.
The original advocate of free trade calls for tariffs “when some particular sort of industry is necessary for the defense of the country”(pages 169, 170 at link). The navy was indispensable for Britain’s national security, and Smith defended protection for British shipping and shipbuilding industries as “the wisest of all the commercial regulations of England” because “defense … is of much more importance than opulence” (p. 172).
Smith goes on to explain that when a domestic industry is taxed, “it seems reasonable that an equal tax [tariff] should be imposed” on the foreign industry to level the playing field, or as Smith said, to put “the competition between foreign and domestic industry … as nearly as possible upon the same footing” (p. 173). American companies have to pay workers a minimum wage, Social Security and other taxes unlike Third World competitors. President Trump’s call for America First standards follows Smith’s guidance.
The father of free markets and free trade also backs President Trump in his standoff with China, writing “when some foreign nation restrains by high duties or prohibitions the importation of some of our manufactures into their country … we should impose the like duties and prohibitions upon the importation of some or all of their manufactures into ours” (p 176).
President Trump lifted his China trade policy directly from Smith, who favors “retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of” (p. 177, emphasis added!). China has already begun lowering its tariffs in response to President Trump.
Adam Smith even had an answer for today’s critics who (mistakenly) complain tariffs could raise consumer prices: “The recovery of a great foreign market will generally more than compensate the transitory inconvenience of paying dearer during a short time for some sorts of goods” (p.177).
The America First trade policy of President Trump is founded on the letter of Adam Smith and the spirit of John Kennedy who said Americans shall pay any price, bear any burden, meet any hardship in order to assure the survival and success of liberty.
President Trump is standing up for free trade, free markets, free minds and a free America.
Written by Curtis Ellis
Official website; http://twitter.com/curtiswellis