The Coming Trade Test.
Trade was the single most issue that allowed Trump to win the Presidency. His great “Rust Belt Strategy” greatly paid off in an election where such a strategy by such candidate, was seen as highly unlikely. His tough talk on countries such as China, Mexico, and Japan. Gave great voice to the struggling middle class in the Rust Belt. Whether it be tariffs or cooperate tax policies, the Blue Collar Democrats of the Midwest went out on a limb and took a great chance on a man who had no great chance to win.
And now he must deliver….
He must deliver on his trade promises, for the sake of his re-election. He won on a policy suggesting change like never before. And if he can deliver for the Rust Belt states of Minnesota, Wisconsin, Iowa, Ohio, Michigan, and Pennsylvania. We could see another great Paradigm shift in national politics. But for the Industrial Midwest to turn into a lean republican area of the U.S., Trump will haft to stare down America’s largest economic and military state adversary. China. Who will not let it’s economic behemoth of an economy slip from it’s fingers so easily.
China, like most of the American media, assumed that Trump’s hard trade rhetoric would subside. This was because Trump was not the first person to campaign against other countries’ economic policies. Usually politicians both presidential and congressional ease up on their railing against China and other countries after being elected. However Trump is no usual politician. And at last on Jan. 11 we saw that in his first press conference since becoming the President Elect. Trump not only continued his direct attacks on the press. But re-established his plan for a wall, and trade tariffs on companies that leave the U.S. for Mexico, China and other places. Whether the media likes it or not. Trump’s continued tough talk on trade is helping remind those voters who were reluctant to go with him, that he will go the extra mile for their economic and financial concerns.
Those who voted on economics in the general election have seen good news so far. Ford CEO announcing building in Michigan instead of Mexico. U.S. Steel announcing that they will hire back 10,000 of their laid off employees in the name of Trump and his new regulation cuts. The Carrier deal in Indianapolis and even the largest consumer confidence rating in over a decade along with new optimism among small business owners. This “Trump Effect” has led to a rally in the stock market, but must also lead to a great reality in the economy. The more jobs that return and are created in the U.S., the greater chance he will be re-elected via the working class of the blue collar Midwest.
The great demand to Make America Great Again is very high. Most of American’s public consensus is that any attempt at scoring a goal on trade with China or any other country is an uphill battle. However, in reality, the cards are surprisingly still in our favor. The greatest weapon that the U.S. has in any trade deal is for another country to have access to our markets. America alone is the world’s biggest consumer of almost all manufactured products. Every country wants for their companies’ products to be allowed to enter the U.S.. Such deals that allow for this unconditional free trade are deals Like NAFTA and our current deals with Japan and China.
Yet, this “Free Trade” and globalization has seemingly hurt American manufacturing over the last 20 years. And was accelerated by China entering the World Trade Organization. This gave China limitless access to our markets and vice versa. However any such free trade proposal only works when both sides are neutral at each other's borders when trade occurs. This is not the current case because of how low the value of the currencies are of China, Japan, and Mexico. Their monetary systems based on their own currency value against the U.S. dollar, can cause American products that are sold in these countries to effectively have an unofficial (but intentional) tariff on U.S. products. These monetary manipulations can cause a raise in prices of American goods that can inflate between areas of 5%-45%.
Trump’s way to tackle this. Return the favor and impose tariffs on goods coming in from other countries, whilst simultaneously lowering the cooperate tax rate from 35% to 15% and decreasing regulations. No need for a great speech, these proposals will always bring in headlines during the evening news. And with the way companies and CEO’s are reacting. Such an implementation would seemingly pay off.
**Now even some branches of the media are now question about the possibility of a dismal future Mexican economy. And even great speculation not to whether The Donald’s trade policy will work. But rather, just how well it will work.**
The good news for Trump’s policy proposals, he has a republican congress. This new congress is much too afraid to publicly go against Trump on such key issues. Not after he won more republican votes in the republican primaries. An even greater feat considering him going up against 16 candidates. With some big brass republican names such as Christie, Bush, Rubio, and Cruz.
Furthermore, he was the first republican candidate to finally break the blue wall of the upper Midwest after decades of failure in these states.
This is the perfect situation for Trump in his economic aspirations. He is now the leader of the Republican Party and will now be it’s guiding light forward.
His appointment to the new White House Trade Council Peter Navarro. An economist who himself has also raged hard against other countries and their trade tactics against the U.S. Is a great vindicator towards the feelings of the middle class in the rust belt. And for the media to say that Trump isn’t making countries like China and Mexico happy in hopes it will hurt his popularity. It rather in fact is only going to help him in the eyes of the union manufacturing workers in Lackawanna, Trumbull, and Macomb counties along with western Wisconsin and rural blue collar workers in Minnesota.
A great paradigm shift is underway. So long as Trump delivers, and the Democrats move sharply to the left. The Republican party could establish itself truly, as the party of middle America giving them rule for decades.
Fair warning to the out of touch Democrat establishment. Ohio and Iowa could become the new Alabama’s. Along with the upper Midwest becoming the new Red Wall.