Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Snow in July in Austria and Switzerland
Why US Multinationals Oppose Trump and Favor Clinton
Apple’s CEO, Tim Cook, announced that Apple would not contribute to the costs of the Republican convention in Cleveland this year as it has done in past conventions. Apple is a corporation incorporated in the.US but almost all of its products are produced in China. It is a Chinese company much more than it is an American company. And so are many other “U.S.” multinationals, including a number of high-tech companies like Hewlett-Packard. Hundreds of major American corporations have shipped millions of jobs overseas, according to an analysis of Trade Adjustment Assistance (TAA) filings made to the U.S. Department of Labor's Employment and Training Administration on behalf of the displaced workers. According to a report on CNN, over 900 US corporations are producing products abroad, a "who’s who" of American manufacturing firms.
Given that the presumptive Republican candidate for President, Donald Trump has announced his intention to balance trade with China and re-negotiate all USA trade treaties to assure that trade becomes more balanced, Trump has incurred the opposition of companies that produce all or some of their products abroad and their spokesman, the US Chamber of Commerce. The latter in its propaganda lauds the advantages of U.S. exports and does not mention the disadvantages of U.S. imports which exceed the former by several hundred of billions per year causing the loss of millions of American manufacturing jobs. US multinationals account for a substantial share of manufactured goods exports to the US, so it is not at all surprising that these companies should prefer a tweedledee candidate to Hillary’s tweedledum candidacy, lest a tariff be imposed on their exports to the U.S..
U.S. policies contributed to the growth of China as the number two manufacturing power. Pres. Richard Nixon normalized relations with China in 1972. On 24 January 1980 Congress passed a trade agreement conferring Most Favored Nation (MFN) status on China. Despite this move, China’s MFN trade status (which was not granted permanently) created new legal and political impediments to Sino-American trade relations which were not removed until 2001, when China joined the WTO, whose rules prohibit members from imposing trade restrictions on other members except when they are experiencing chronic trade deficits.
Growth in the U.S. goods trade deficit with China between 2001 and 2013 eliminated or displaced 3.2 million U.S. jobs, according to a study by EPI Director of Trade and Manufacturing Policy Research Robert E. Scott. Trade with China has caused job loss in all 50 states and the District of Columbia, including all but one congressional district. About two-thirds of jobs lost, or 2.4 million, were in manufacturing. The U.S. Bureau of the Census reported that American companies abroad and US subsidiaries of foreign corporations trade accounted for about 50.9 percent ($1,178.7 billion) of total consumption imports ($2,314.0 billion) in 2014. Republican and Democratic presidents Pres. Bill Clinton and George Bush did not concern themselves with the trade deficits’ disastrous consequences for American manufacturing workers and the US. Economy tanked as a result, no doubt contributing to the popularity of Trump’s candidacy....
Conservative analyses of EU's failure cite regulation, ignore trade imbalances
I've noticed that conservative analyses of why the EU failed invariably focus upon regulation, but miss the trade imbalances. For example take the British Conservative Party's Daniel Hannan's eloquent and humorous oration at the Oxford Union in favor of Brexit:
Daniel Hannan is correct that the European Union has been an economic disaster. He cites some good statistics to prove his point. But like many other conservatives, he only attributed that disaster to one of its causes: the regulations of the European Commission. He missed the other major cause: the trade imbalances.
Eventually, every trading system which sustains imbalanced trade eventually slows economic growth....
Journal of Economic Literature:
Atlantic Economic Journal: