Donald Trump's Real Trade Plans Revealed by Wilbur Ross (12/01/2016)
Many talking heads on CNBC and people who totally oppose Trump say he will crash the economy with tariffs and trade wars. This is what Clinton said.
But yesterday Trump's close economic advisor, big donor, and new Commerce Secretary Wilbur Ross revealed what Trump will really do in an interview with Yahoo finance. He there will be no trade wars:
But Ross, who as Commerce Secretary would lead any trade negotiations, describes a more benign approach. On Mexico, he points out that the United States accounts for 80% of Mexican exports, which gives the United States plenty of leverage to lean on its southern neighbor to buy more American-made products. “If I’m a guy’s 80% customer, is he going to fight with me?” Ross says. “No, he’s going to negotiate.”
The goal, he says, wouldn’t be to punish US companies that produce goods in Mexico, but to reduce America’s $60 billion trade deficit with Mexico. That can be done two ways: by Mexico exporting less to the United States or buying more from it. Either could be accomplished, he says, without dismantling the North American Free Trade Agreement.
The US trade deficit with China is about $335 billion. Ross highlights at least two ways to lower that. First, persuade China to buy more stuff from the United States that it currently imports from somewhere else. Example: energy products, such as liquefied natural gas (LNG). “Trump is going to be promoting LNG and its export,” Ross says. “It wouldn’t be hard for [China] to buy more LNG from us than from the Gulf countries.” (Tip for investors: Keep an eye on energy stocks.)
The second thing the United States can do is persuade China to ease its own limits on imports of American raw materials. “They export to us lots of apparel and lots of footwear, but they have quotas on American exports of cotton,” Ross explains. “They could relax those quotas.”
Full article and video of interview here.
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