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• Donald Trump's only unique economic proposal would, if put into law, be a disaster for working men and women in South Carolina. The Palmetto state is a major exporter with over $29 billion a year in exports. In 2013, 5,832 companies exported goods from South Carolina.
• Guess which nation receives the most exports from SC? If you guessed China, you guessed right. According to the U.S. Global Leadership Coalition, nearly 560,000 jobs are supported by trade in South Carolina manufacturing, 22% of total jobs. Thirty percent of all manufacturing workers depend on exports for their jobs (USGLC) And South Carolina's manufacturing sector is growing faster than any other state in the nation.
• Trump wants to punish China for what he considers to be unfair trade practices by slapping a 45% tariff on goods imported from that country. Certainly China does engage in currency manipulation in order to promote trade. But what happens to American exports if we add huge tariffs to the imports from other nations? What happens is that a trade war is launched. If we slap tariffs on goods imported from China, then China will retaliate and place big tariffs on American goods exported to China. Any tariff near 45 percent would simply kill American jobs and not bring back one single job from China. Exporters in South Carolina, like those around the world, work on a very low profit margin. If even 5% tax is added to our exports to China, thousands of businesses will have to downsize or shut their doors.
• China buys many things that are made in South Carolina including airplanes, cars, parts, and agriculture. A trade war with China, which is exactly what Trump is proposing, could cost well over 25,000 jobs just in South Carolina and millions nation-wide. These are well paying jobs that pay the rent, taxes, and support thousands of more jobs in the service sector.
If asked about the job-killing possibility of his trade war proposal, Trump will say: "It will never come to that. I will threaten and they will give in. We will win again. My lawyers will negotiate." That is nonsense.
The Chinese will not give in to a threat from a future President Trump. They will retaliate even if it means short term losses to their economy. The Chinese are extremely proud and do not have to worry about public opinion polls, strikes, or press coverage of their behavior
In addition to killing jobs, a trade war with China, and as Trump proposes, with Japan and Mexico, would slash imports. What happens when low cost goods from these nations stop coming in to the US? We begin to see Inflation.
When we can't buy clothing and televisions from China, we start paying more, much more for these goods. Since Ronald Regan began cutting tariffs back in the 1980s, America has had low rates of inflation. What Trump is proposing would launch a trade war, cut exports, reduce manufacturing jobs, and bring inflation once again.
I wonder why the two candidates who are most critical of Trump, Jeb Bush and Ted Cruz, are not criticizing him for his disastrous proposal to initiate trade wars with our biggest trading partners?
Previously:
• 02/16/16 How Did Donald Trump Become the Frontrunner?
• 12/14/15 Russia in Syria
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Chris Gersten was Director of the Office of Refugee Resettlement in the Department of Health and Human Services from 1989 until 1993. He is also a former political director of AIPAC.
