Former President Donald Trump unveiled a key talking point for his 2024 campaign - an "America First" trade plan which would include universal tariffs on most goods imported into the US.
Trump laid it out in a Feb. 27 statement, which called for a system of universal baseline tariffs on most foreign products, while rewarding American domestic production. The new policy will "tax China to build up America," according to Trump.
"Joe Biden claims to support American manufacturing, but in reality, he is pushing the same pro-China globalist agenda that ripped the industrial heart out of our country," Trump said in a video titled "Pro-American Trade to End our Reliance on China."
Trump claims his plan is a matter of "both economic and national security," and would "implement a bold series of reforms to completely eliminate dependence on China in all critical areas."
As Rabobank notes;
In short, his proposed “America First” policy would phase in a system of universal, baseline tariffs on most foreign products, the revenue from which would reduce taxation on firms producing in the US. Moreover, tariffs “would increase incrementally depending on how much individual foreign countries devalue their currency."
Honestly, I am not shocked. I am sure no other markets Daily uses the word “mercantilism” as freely as this one has for around a decade - I had to explain the word in 2015, and then how pre-WW2 US presidents were mercantilists; when Trump floated his first tariffs, I argued phasing them in to allow onshoring FDI before imported goods got more expensive would be logical; ‘Weaker currency = higher tariffs’ was factored into our report on ‘Balance of payments -and power- crises’; and clearly there is still US momentum to change things even if means breaking things, which we factored into our ‘The World in 2030’ report – which we may arrive at early; moreover, as argued last year, and this, ‘Bretton Woods 3 Won’t Work’.
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To that end, since Trump left office in 2021, the former president has been highly critical of Joe Biden - who he says has punished domestic producers, while rewarding multinational corporations that outsource labor to hostile nations such as communist China.
"Biden’s pro-China economic program puts America last and it’s killing our country," said Trump, adding "My cutting-edge trade agenda will revitalize our economy by once again putting America first. We will quickly become a manufacturing powerhouse like the world has never seen before."
Trump's plan would strip China of its most favored nation trade status, while adopting a four-year plan to phase out all Chinese imports of essential goods, as well as a ban on federal contracts for any company that outsources to Beijing.
Under Biden, the US-China trade deficit has risen nearly 10% to $382.9 billion in 2022 alone. The Biden admin, meanwhile, has proposed a nearly $2 trillion tax increase on Americans.
"Very simply, the Biden agenda taxes America to build up China," said Trump, adding that he would instead "tax China to build up America."
As the Epoch Times notes;
Universal Baseline Tariff Would Fill US Treasury’s Coffers, Says Trump
Trump said if he were in charge, he would instead impose a universal baseline tariff on foreign producers of most imported goods, rather than raise taxes on American producers.
He said that he would gradually increase tariffs if other countries manipulate their currency or otherwise engage in unfair trading practices, like China.
The former president believes that if tariffs on foreign exporters go up, domestic taxes on American workers, families, and businesses would decrease substantially.
“That means a lot of jobs coming in,” the 45th president said.
Trump said higher tariffs will “increase incrementally depending on how much individual foreign countries devalue their currency.”
He slammed the practice of other countries devaluing their currency, while subsidizing their industries, saying they were engaging in what he described as “trade cheating and abuse.”
He noted that they still “do it now like never before,” but that his administration had largely stopped it “and it was going to be stopped completely within less than a year” if he stayed in office, according to Trump.
“As tariffs on foreign producers go up, taxes on American producers will go down, and go down very substantially.”
In addition to reducing the nation’s massive trade deficits and bringing back home millions of manufacturing jobs, the 2024 Republican presidential candidate said that his economic program would rake in “trillions and trillions of dollars” for the Treasury Department from foreign countries, which would instead be invested in “American workers, American families and American communities.”
45th President to Continue His Administration’s Trade Policy
Trump called his new economic plan the “linchpin of a new Strategic National Manufacturing Initiative, that builds on my historic success in ending NAFTA.”
He called his replacement of the North American Free Trade Agreement (NAFTA) one of the most “tremendous” achievements of his administration.
After negotiating with the leaders of Mexico and Canada, Trump replaced the NAFTA accords with the United States-Mexico-Canada Agreement (USMCA), which covered more than $1.3 trillion of commerce throughout North America.
The USMCA required that 75 percent of automobile components be manufactured in the United States, Canada, or Mexico in order to avoid tariffs.
The new trade agreement required that 40 to 45 percent of automobile parts be made by workers who earned at least $16 an hour by 2023.
The USMCA was expected to create thousands of new jobs tied in the auto industry in North America and bring in around $30 billion of new investments into the sector.
In addition, the trade deal was designed to open up new markets for American agricultural products like wheat, poultry and eggs.
“We’re also going to end other unfair trade deals, and we’ll end them quickly,” added Trump.
For example, the former president scrapped the Obama administration’s agreement to participate in the Trans-Pacific Partnership trade agreement in January 2017.
This deal was created to further trade ties between the U.S. and eleven other countries around the Pacific.
The remaining countries negotiated a new trade agreement called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which incorporates most of the provisions of the TPP and entered into force in December 2018.