US Trade Strategy

Trump is using Tariffs to lower the US trade deficit by opening foreign markets to US exports. The total US trade deficit in 2017 was $566 billion and is expected to be $490 billion in 2018. Trump is bringing manufacturing back to the US to restore the middle class that has been declining since the passage of NAFTA in 1993. Trump has also unleashed energy. He restored coal production. The US is now a net exporter of liquid natural gas and is increasing oil production. Trump is expediting pipeline expansion to support oil and gas. The plan is to increase US oil production from 11 million bbd to 20 million bbd to become energy independent. This would eliminate energy imports to the US and further cut the trade deficit.

The US has finalized new trade agreements with Canada and Mexico to close trade loopholes and reclaim the manufacturing supply chain for the US, Canada and Mexico. The US also finalized a new trade agreement with South Korea.

Trade talks are underway with Japan and the EU and China has announced that they are lowering their import tariffs. The US annual trade deficit with China grew from $125 billion in 2003 to $375 billion by 2017.

International trade is often done by proximity. Bordering countries engaged in trade to reduce the time it took to transport goods. These trade relations are largely still in place. Trade is based on price and sellers realize that they need to keep their prices reasonable.  Trade has often been used to establish relations between nations. Countries are less likely to attack trading partners.

Trump is busy trying to get US trading partners to behave better. He is using Tariffs to do this. China has been stealing US intellectual property and threatening Japan. Korea had been threatening the US and its neighbors with nuclear missiles. Iran has been the primary sponsor of Islamic Terrorism for 50 years. Palestinian terrorists have been attacking Israel for 70 years. Russia has been threatening Ukraine. These bad actors may end up trading almost exclusively with each other.

Norb Leahy, Dunwoody GA Tea Party Leader