Trade protectionism works like crack cocaine in the sense that if we were to follow the protectionist policies being suggested by presidential candidates in both parties, jobs will be lost, and not gained.
Here is the real issue — Since 1980, as a result of automation, US manufacturing of goods has quadrupled.
As importantly, half of U.S. manufactured goods are being exported. Almost half of the business of America’s 500 largest corporations is done internationally.
If we were to restrict the free flow of goods by, for example, raising import duties, our trade partners will respond in equal measures and jobs will be lost on both sides.
At the core is that governments across the world have failed to translate the savings in manpower, achieved by automation, into higher levels of investments, in infrastructure and consumption.
Contrary to common belief, our government has done a far better job than governments in other parts of the world.
At 4.9 percent, our unemployment rate is less than half of Europe’s, which was 10.3 percent as of January of this year.
China has funneled the savings in manufacturing automation into excessive investment in infrastructure that has resulted in roads that nobody are using and entire cities of empty housing, a bubble that will ultimately implode.
What this means is that Europe and China, for example, have far more at stake than we do and will put up one hell of a fight to keep their jobs. Believing anything else is naive.
Nobody has ever won a trade war. They normally last only a few weeks because the opposition often assisted by the World Trade Organization will respond in ways that is far more damaging than the instigator had ever imagined.
Even a brief trade war can do damage that it will take years to recover from.
When Donald Trump calls around wanting to renegotiate trade deals, I’m afraid nobody will be picking up the phone.
And then what?
Karsten Malmos, Medford
