Russia is not the only nation excited to have President Donald Trump in the White House. Chinese leaders are, too. As President Donald Trump dumps trade agreements in the works and threatens to cut off other agreements, China is happy to take our place in the global marketplace.
In response to a Trump's trade policy, Peter Goodman of The New York Times writes that some American allies "are shifting focus to other potential partners for new sources of trade and investment. Many are looking to China."
Trump believes that globalization is a choice. "America first," says Trump, and the rest of the world can go fly a kite. But in today's global economy, those who participate in global trade build their economy and add jobs by selling their goods and services around the world. Those who withdraw and isolate themselves lose their customers. Just ask North Korea and Russia.
Jeroen Dijsselbloem, president of the Eurogroup — comprising finance ministers from countries sharing the euro currency — recently stated at the World Economic Forum in Davos, Switzerland, "We've always said that America is our best friend. If that's no longer the case, if that's what we need to understand from Donald Trump, then of course Europe will look for new friends."
This is not good news for many American companies or workers. But Trump, according to Goodman, has threatened allies and trading partners by calling NATO "obsolete" and shutting American borders, literally for some, and as trade partners for others.
A study commissioned by the United States Chamber of Commerce found that 14 million American jobs depend upon trade with Canada and Mexico and "nearly 5 million of these net jobs are supported by the increase in trade generated by NAFTA." According to the Wilson Center, the American auto industry alone exports about $20 billion in cars and car parts to Mexico.
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Before the 1994 North America Free Trade Agreement (NAFTA) with Canada and Mexico, called "one of the worse deals ever" by Trump, the U.S. Chamber of Commerce states that Mexico purchased about $41 billion in products and services from the U.S. and exported $39 billion in products and services to the U.S. Since NAFTA, total trade with Mexico increased to about $583.6 billion. About half of that includes goods and services sold to Mexico by American companies.
Yes, free trade among our three nations has cut some jobs in the United States, in some cases sending them to Canada and Mexico. Other jobs were replaced with automation on the assembly line. But NAFTA has also created many more jobs here at home, as well as improving the bottom line for hundreds of companies doing business with Mexico and Canada.
They say you shouldn't bite the hand that feeds you. Over 40 percent of produce in our grocery stores is imported from Mexico. American restaurants depend on Mexico for much of the food they serve. Half of American farmers depend on Mexican workers to pick their crops.
Yes, Mexico will suffer if we reduce trade with them; they earn billions of dollars annually by selling products in the U.S. But American companies will suffer as well. After all, Mexico is America's third-largest customer. All total, our trade agreements with Mexico adds up to half a trillion dollars in products traveling back and forth across the border. A border wall will do nothing to enhance this trade and will actually hurt American businesses, especially those located directly on the southern border where products and services cross the border daily.
Regarding Trump's wall — Americans will pay for it twice. First, we will pay for it when Congress authorizes the use of our taxes to build it. Then Americans will pay again if Trumps places a tariff (read tax) on imports from Mexico. Americans will pay this tax at Wal-Mart, grocery stores, car dealerships and hundreds of other places where we buy products produced or partially produced in Mexico. A tariff on Mexico is a tax on American consumers.
Does Mexico benefit from trade with America? Absolutely. But guess who benefits when Mexico does well? America does. As the Mexican economy improves, the more they import and purchase from America companies, the less they need to immigrate to the United States to find jobs. Mexico's success is America's success. Canada's success is America's success. When one nation does well in the world, the benefits ripple around the world. Globalization is America's friend, not our enemy.
Tom Zirpoli writes from Westminster. He is professor and program coordinator of the Human Services Management graduate program at McDaniel College. His column appears Wednesdays. E-mail him at email@example.com.