Trump Nails It
- By: Larry Walker II -
Last year our trade deficit with Mexico totaled $53.8 billion, and is projected to end about the same in 2015. When the last three decades are summed, we find that the United States 30-year trade deficit with Mexico amounts to $910.2 billion. Although this has been great for Mexico, it hasn’t been so great for the United States.
Looking back over the last 30 years, we find that the United States actually ran trade surpluses with Mexico in 1991 through 1994, and then came the North Atlantic Free Trade Agreement (NAFTA - 1994). Since NAFTA, the United States annual trade deficits with Mexico have totaled $897.8 billion (since 1995). By comparison, the deficit amounted to just $13.7 billion during the 9 years preceding NAFTA.
U.S. Trade Deficit with Mexico (1985 to 2015)
2015 $31.2 billion (through July)
2014 $53.8 billion
2013 $54.5 billion
2012 $61.7 billion
2011 $64.6 billion
2010 $66.3 billion
2009 $47.8 billion
2008 $64.7 billion
2007 $74.8 billion
2006 $64.5 billion
2005 $49.9 billion
2004 $45.2 billion
2003 $40.6 billion
2002 $37.1 billion
2001 $30.0 billion
2000 $24.6 billion
1999 $22.8 billion
1998 $15.9 billion
1997 $14.5 billion
1996 $17.5 billion
1995 $15.8 billion
1994 ($1.3) billion (surplus)
1993 ($1.6) billion (surplus)
1992 ($5.4) billion (surplus)
1991 ($2.1) billion (surplus)
1990 $1.9 billion
1989 $2.2 billion
1988 $2.6 billion
1987 $5.7 billion
1986 $4.9 billion
1985 $5.5 billion
Not only are we losing in trade with Mexico, but the Mexican government has allowed millions of its own citizens, and those from nations to its south, to pour over our southern border illegally. That’s right! The Mexican government has been mostly complicit, looking the other way while tens of thousands boarded trains from its southernmost to its northernmost border, allowing them to cross our border without any resistance. Although lately Mexico claims to be clamping down on illegal border crossings, the damage has already been done.
There are folks both left and right who say, “Free-trade is good for America, because it allows us to work less and buy cheaper goods.” Although plausible on paper, the theory fails once we tally the last thirty years results. Looking back over the last 30 years, we discover that not only has the U.S. lost nearly $5.0 trillion in national wealth ($4 trillion to China and $1 trillion to Mexico alone), but according to the Bureau of Labor Statistics, manufacturing jobs in the U.S. have declined from 18.0 million in 1985 to just 12.3 million as of August 2015.
According to Raymond Richman (Ph.D. in Economics from the University of Chicago and Professor Emeritus of Public and International Affairs at the University of Pittsburgh), “We should end our huge chronic trade deficits which have decimated our manufacturing sector and caused the loss of millions of good American manufacturing jobs. Our policy should be balanced trade which economic theory supports rather than free trade which is supported by economic theory only when countries have a common currency and free movement of capital and labor (as among the States of the United States). We should use the “Scaled Tariff” (our invention!), a single-country-variable-tariff that rises as trade deficits widen significantly, whatever the reason, and are reduced to zero as trade is brought into balance.”
Once aware that our flawed trade policy has resulted in the siphoning away of more than $5 trillion in national wealth ($1 trillion to Mexico alone) and 6 million manufacturing jobs, it should be easy to understand how Mexico will pay for the new border wall. Mr. Trump has his finger on two of the most glaring problems with our economy, illegal immigration and our Lose-Lose foreign trade policy. Balancing our trade deficit, by any means necessary, is a vital component in the quest to make America great again.
References:
An Economic Program for Stimulating U.S. Economic Growth
30-Year Trade Deficit with China - Maybe Trump Gets It
U.S. Census Bureau – Trade in Goods with Mexico
Bureau of Labor Statistics – CES Establishment Data - Manufacturing
U.S. Census Bureau – Income and Poverty in the United States: 2013