Tuesday, January 24, 2017

Fair Trade

Our current “free trade” agreements have given the US its $700+ billion annual trade deficit.  Trump’s team will renegotiate our trade deals as “bi-lateral trade agreements” with each individual country. The US will negotiate to reduce imports from countries who have “trade barriers” to US imports.

China, Germany, Japan and Mexico will be asked to increase imports from the US, open their markets and lower their tariffs (if they are higher).

If these countries have no demand for US manufactured goods, they may prefer to make the US their oil and natural gas supplier to make our deficit smaller.

Some foreign countries have higher tariffs than the US for automobiles; Germany’s import tax on the Cadillac is 10% and the US tariff on foreign cars is 2.9%. We would like Germany to lower its tariff.

These negotiations can include multiple adjustments and putting a manufacturing plant in the US for cars sold in the US would help these foreign companies dodge any tariffs.

Europe has a national sales tax on imports called a Value Added Tax (VAT). Trump doesn’t like the VAT tax and won’t allow this being imposed in the US. It enriches the government but penalizes the citizen-consumer.

Trump will want China to stop its currency manipulation and intellectual property theft. We may see some agreements to settle these issues.

Europe has required US companies to put their manufacturing plants in their countries to make products to be sold to their citizens.  This has gone on for decades.  Now the US will impose similar requirements.

US companies have complained about “free trade” for some time and they actually coined the term “fair trade”.


Norb Leahy, Dunwoody GA Tea Party Leader

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