The battle for fair trade
June 14, 2019
The U.S. is in a worldwide battle for making trade among the nations fairer and more balanced than it has been for several decades. This is a bipartisan issue and enjoys support by members of Congress from both sides of the congressional aisle.
The motivation for trying to bring our trade imbalances down and ultimately to eliminate them altogether has far reaching consequences for the economic health of our nation.
Prior administrations have recognized this problem and have diplomatically tried but failed to correct these trade imbalances. International trade imbalances create lower U.S. tax revenues because of reduced economic activity at home, particularly in manufacturing, and the loss of higher paying jobs in many skilled sectors of the economy which have been outsourced to cheaper labor markets overseas.
In earlier years, providing foreign nations a trade advantage served the national and security interests of the U.S. as the world was recovering from the devastation of World War II, new nations were emerging from colonial rule in Asia and Africa, and a cold war was raging between the Western democracies and the communist world.
During this time the U.S. was the pre-eminent economic and military power in the world. Free trade, meaning American economic foreign aid and the elimination of tariffs for American imports, would create viable and stable governments as a bulwark against communist expansion, and ultimately, emerging markets for American goods and services.
These trade policies worked only too well with the emergence of China as an economic powerhouse as a result of the Nixon/ Kissinger opening to China in the 1970s and the collapse of the Soviet Union a decade later.
For many years now China has enjoyed increasingly favorable trade imbalances amounting to hundred of billions of dollars annually to the detriment of the U.S. Other nations to a lesser extent, including Canada and Mexico have also enjoyed favorable trade imbalances with the U.S.
Unfortunately, yesterday’s trade partners have now become today’s trade competitors and diplomatic trade negotiations have been ineffective in correcting the problem.
After China’s reneging on agreed terms to modify their laws for patent and copyright protection and reform of other economic and cyber practices, and to open their markets to more American exports, the president’s only choice was to implement tariffs on Chinese goods and services, while continuing to press the Chinese government at the negotiating table.
This is not an ideological or political issue. All Americans, including those who hate the president, have a stake in his success in converting free trade with China and other countries into fair trade. The president needs to directly address the American people, not just his base via Twitter, but by nationally televised speeches from the oval office. He needs to explain the short-term sacrifices this trade war will require from the American people, and the long-term benefits that fairer trade will bring.
An added benefit might be the restoration of respect for the office he has denigrated; and it might even win him a few more votes down the road.
For the American people, a more balanced trade relationship with China will create more and higher paying jobs, reduce wage inequality, and increase revenue to fund our ignored needs such as infrastructure improvements, climate change concerns, energy transformation and education. The progressive Jewish community needs to set aside its blanket opposition to everything the president does and support the president on this issue.
The U.S. national interest and world stability require continued U.S. global military presence and diplomatic and economic engagement. The nations with whom we engage in trade should recognize the sacrifices made by the American people in postponing our own domestic needs. An expansive and healthy American economy with sufficient revenue generation to fund America’s own needs, is not only in America’s best interest, but is in the best interest of a healthy world economy.
If you wish to comment or respond you can reach me at firstname.lastname@example.org. Please do so in a rational, thoughtful, respectful and civil manner.
Mel Pearlman holds B.S. & M.S. degrees in physics as well as a J.D. degree and initially came to Florida in 1966 to work on the Gemini and Apollo space programs. He has practiced law in Central Florida since 1972. He has served as president of the Jewish Federation of Greater Orlando; was a charter board member, first Vice President and pro-bono legal counsel of the Holocaust Memorial Resource and Education Center of Central Florida, as well as holding many other community leadership positions.