Originally published by the Journal of Commerce in February 2017
In the first two weeks of the new Trump Administration, all international traders want to talk about, and with good reason, is where does the new President really stand on trade? On the one hand, he has taken advantage of trading opportunities to generate profits for his own businesses, such as the now infamous ties made in China. On the other hand, he was elected by a constituency that has clearly concluded trade is the cause for much of what ails America. What should we think? Truthfully, no one really knows – at least not yet. Beltway insiders suggest we should all take a deep breath and wait to see what really happens. Those same beltway insiders also predict that if things don’t calm down, we will have a Constitutional crisis on our hands! Boy, that thought gives everyone a warm and fuzzy feeling! Already, the adage we were all raised with – it’s not what you say but how you say it, is notably absent in pronouncements originating from 1600 Pennsylvania Avenue! Adding to the confusion, the Administration’s position seems to change as often as the wind shifts direction. We hope to sort out some of the details at the TPM Conference the Journal of Commerce is hosting in Long Beach February 26 through March 1. Whether or not you are able to attend, here are some thoughts.
What are the tangible actions we have seen so far? First, of course, Trump picked a fight with the President of Mexico, something no one should have been surprised about given the we are building a wall along the southern border and Mexico will pay for it rallying cry put forth throughout the election. Anyone who knows anything about the history between Mexico and the U.S. should also have expected the response – hell, no! That exchange was followed by – we are going to build that wall and get the cost back from a 20% border tax on all goods imported from Mexico, quickly amended to a border tax on all imported goods. It did not take long for the American public to understand public funds would build that wall – and that finally gave pause to the Republicans who themselves aren’t sure how to proceed.
Right after that, the English Prime Minister came to town and you would have thought there was a romance starting! There is no question the U.S. and U.K. have a long and common history, but much of the talk was about a bilateral trading agreement. So, here is the obvious question – if the trade deal the U.S. made with Mexico and Canada ended up so poorly for America, how is any trade deal with the U.K. going to be better? Absent specifics telling us the reason the existing trade deals are so bad, who knows?
Equally predictable, the Trump administration lessened the sanctions on Russia to now permit the export of cell phones and tablets, the ban on which was called by some an unintended consequence of the sanctions imposed on Russia in the waning days of the Obama Administration. The question on everyone’s mind is – what is next? Will Mr. Trump continue to ignore the hacking which seemingly occurred during the election? Apparently Congress will not, so just what will happen to our relationship with Russia, and how long are the new President and the Congress going make nice together?
Then Mr. Trump tells the Iranians they are “on notice” in response to one of their ballistic missile tests. How do the Iranians respond? They first ban the American wrestling team from competing at an international wrestling match taking place in Iran, and then rescind that ban in the face of the appellate court decision suspending the executive order barring immigrants from Iraq, Iran, Sudan, Libya, Somalia, Syria, and Yemen from entering the U.S. for 90 days.
Where do we go from here? Honestly, no one knows. On the one hand, you have to give Mr. Trump credit for attempting to quickly do what he promised during the election campaign. On the other hand, the new President knows all too well business cannot prosper in the face of such turmoil. So, what to do? If there was ever a time for the ownership/management of every business that engages in international trade (and their up and downstream supply chain partners) to reach out to elected their representatives, this is it! While by no means an exhaustive list, here are some specific suggestions for how you can make your voice heard:
1) Join a trade association – there are plenty of choices. They can be local, regional or national in scope, they can be industry focused or deal with trade more broadly. You may not be able to get to D.C., but through the association(s) you join, you are able to advocate for or against issues important to your business as part of a larger group – and you can definitely visit your elected representatives in their home districts when Congress is not in session.
2) Get active in that trade association and make your voice heard. If you cannot volunteer your time, donate dollars. The issues are too important to sit on the sidelines, even if you run a one person operation and your contribution is modest.
3) Regularly contact your Member of Congress and Senator – tell them what you think about the issues they are considering. They want to get re-elected, so make sure they understand the threat you are under and what that threat means to those you employ – and donate to their campaigns, even in small amounts. Constituents get attention, donors also even more get attention!
4) Invite your Member and Senator to a tour of your plant. Make sure your elected representatives get the information they need to really understand what you do and how your business relies on international trade to create good paying jobs. Make sure they also understand the impact of their policies on your employees.
5) Get your employees engaged – they, too, need to understand their jobs are now at risk because the so-called silent majority has spoken.
Finally, let’s get real. The elephant in the room (and yes, that metaphor was intentional) is jobs. Whether it is the Ball State, Pew Research or a plethora of other reports and studies which have been published, manufacturing jobs are disappearing in the U.S., primarily due to automation and globalization. At the same time, jobs in the service sector are expanding – let’s discuss that as a plus, while we are on the topic of jobs. If we are going to be objective in dealing with the anger of the “silent majority”, we need to have realistic policies dealing with job creation and retention, not pontifications.
It is easy to say to those who are looking to turn inward when was the last time you went to your favorite store and purchased only products or goods which were labeled Made in USA; or perhaps you prefer the Super Bowl analogy – did you give up your guacamole last Sunday? After all, those avocados were imported from Mexico?! Being flip in the face of this serious concern is easy, but not terribly productive. To deal with this situation in the long term, the question we should be asking is what policies should we be considering as nation to address the very real concerns of thousands of Americans who can’t find work, whether that inability is the result of age, poverty, skills, education or some other cause? When will that dialog take place in earnest?