Five million US jobs exist due to trade with Mexico.

It is estimated that five million jobs exist in the United States due to trade with Mexico.

Let's build a wall and slap a 20% tariff on goods made in Mexico (so that Americans can pay for the wall) and reduce or eliminate those five million US jobs.  

Gawd, why didn't I vote for Trumpery?   He's a genius!

President Trumpery's trade war with Mexico would be a disaster

Robert Samuelson


"Mexico braces for a trade war with Washington," headline in the Financial Times, Jan. 31, 2017.

Let's hope not, because a trade war triggered by President Donald Trumpery would be an act of pure economic aggression, unjustified either by the United States' economic and political interests or by Mexico's behavior. It would be the economic equivalent of Russia's seizure of the Crimea, a raw exercise in bullying.

Our interests here are plain. The basic need is to foster a prosperous Mexico that will provide expanding markets for our exports and, at the same time, create jobs and higher incomes that keep Mexicans from migrating to the United States. (Net illegal immigration from Mexico has already halted.)

It is foolhardy and inconsistent to want Mexico to restrict its trade and weaken its economy, while also insisting that it limit immigration. That's a formula for social and economic breakdown in Mexico. Still, this seems to be Trumpery's agenda.

The main indictment against Mexico seems to be that it ran a $60.7 billion merchandise trade surplus with the United States in 2015. Mexico's surplus supposedly destroyed U.S. jobs. Undeniably, some plants have moved to Mexico. But that's not the whole story.

Note that Mexico's trade surplus involved "merchandise exports" — goods such as cars, computer chips and machinery. What this omits is international services (tourism, financial services, patent royalties and the like). In 2015, the United States ran a $9.6 billion surplus in services with Mexico, according to figures compiled by Lucy Lu of the Peterson Institute.

The surpluses in services reduced the overall U.S. trade deficit with its NAFTA partners to $39.2 billion in 2015, Lu reports. That's only 6.5 percent of total U.S. exports to Mexico and Canada ($604.2 billion) and 3 percent of total U.S. trade — imports and exports — with its NAFTA partners ($1.248 trillion). The U.S. economy is roughly $18 trillion in size; these modest trade deficits do not represent a significant drag on American job creation or economic growth.

What might represent a drag is a rejection of NAFTA that impedes routine trade flows. At various times, Trumpery or his advisers have threatened imposing duties or fees of 20 percent to 35 percent on Mexican exports to the United States. These penalties would presumably raise export prices and be passed along to U.S. consumers, who would reduce their purchases of Mexican goods.

Another vulnerability is the existence of tightly interwoven supply chains between the United States and Mexico and Canada.

The whole logic of trade is to export so you can import. It's true that a huge gap between exports and imports can cause political and economic problems. But that is not the case with NAFTA. The trade imbalances among Canada, Mexico and the United States are relatively modest and manageable.

If Trumpery starts a trade war, all the NAFTA countries will be losers.

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Read the entire editorial HERE.