In the spirit of the FIFA World Cup taking place in Russia, I’m going to make a political and policy point in soccer terms: When it comes to trade and immigration, the Trump administration is in the process of scoring a colossal own goal.
For the uninitiated (including myself as an American football fan — I had to do some research), an own goal occurs when a team scores a goal against itself. I’ll admit the metaphor might not be perfectly apt. After all, an own goal is an accident. The White House’s approach on trade and immigration appears totally intentional.
This comes at a terrible cost. After wrapping up his first year in office by passing a major tax reform and by pursuing a best-in-a-generation regulatory relief agenda that caused job creators to cheer, the president’s major missteps have resulted in sinking markets and declining U.S. stature abroad.
IMMIGRATION: A MORAL AND ECONOMIC FAILURE
The need for a total top-down reform our nation’s immigration system has been blindingly obvious for over a decade.
We all know what a reformed system would look like. It would be more skill-based. It would seek to fill holes in the labor market and remodel our poorly designed visa programs. It would increase border security. It would deliver a positive outcome for individuals brought to this country without documentation as children.
And yet multiple presidents and a series of dysfunctional Congresses have been unable or unwilling to do what’s necessary to implement the changes that are so desperately needed.
Washington’s failure to act has been economic malpractice. Too many jobs left unfilled, while ready and willing contributors to our workforce are left in a legal limbo. We should be taking advantage of one of our country’s greatest comparative strengths: that the world’s most productive and hardest working individuals want to work in the United States.
But the Trump record on immigration is also a moral failure. A blunt-force policy on illegal immigration that has resulted in thousands of children being separated from their detained parents has not only created an immense political problem for the president, but it has eroded the United States’ standing as a nation in the world that is great and good, that is, as President Reagan said, “a beacon, still a magnet for all who must have freedom.”
TRADE: ERASING THE GAINS
The White House’s approach on trade is also misguided and terrible for the U.S. both economically and militarily. The administration is in the process of tilting the entire trading system to run around China; perhaps not intentionally, but it is the result. Yes, we are taking on China on trade on some very legitimate issues, but we are also taking on the rest of the world at the same time!
The administration has established a new tariff regime on steel and aluminum imports without country exemptions. That means steel and aluminum imports from our friends and neighbors Canada and Mexico are subject to the tariffs. Our largest source of foreign steel? Canada.
And yet that wasn’t enough. The president and Protectionist in Chief Peter Navarro are now in the early stages of making the case for tariffs on auto imports on national security grounds. They’ve identified $50 billion worth of Chinese goods to be slapped with a 25 percent tariff, and they’re making threats that more is to come.
The result is the opposite of regulatory reform, the opposite of economic certainty. Over 21,000 requests have been submitted to the Commerce Department by U.S. importing companies seeking exemptions from the new tariffs.
This is incredibly complicated stuff. The federal bureaucracy isn’t built to jerk from tariff to tariff, and from exemption to exemption.
The markets don’t like it, either. After responding so positively to the administration’s tax and regulatory agenda, the Dow is in the red for 2018 in anticipation of a trade war.
RISKING THE U.S.-LED LIBERAL WORLD ORDER
On these two issues, immigration and trade, the White House has chosen a path that is not just unpopular, but that is damaging to our most fundamental responsibility: keeping Americans safe.
This is not the policy agenda of the National Association of Manufacturers and its CEO Jay Timmons, who said the White House’s family separation policy on immigration is “as unnecessary as it is unconscionable,” and that it “destroys America’s credibility as a beacon of freedom, liberty, opportunity and compassion in the world.”
Nor is this the agenda of the U.S. Chamber of Commerce, the world’s most respected business advocacy group, and its CEO Tom Donohue, who wrote, “Surely a nation as big, generous, and compassionate as the United States can find a way to prevent separating children from their parents at the border.”
On trade, Donohue rightly said recently “that a tariff is nothing more than a tax, and it is not paid by the exporting country— it is paid by the American people.”
The potential results from all of this are scary.
It’s not hard to imagine the tit-for-tat with our allies and with China that leads to higher prices here at home, declining U.S. manufacturing due to steep tariffs abroad, and rising unemployment. This trade policy could crack the world economy.
And what of our friends? Does the soon-to-be-newly-elected president of Mexico, a (albeit occasionally shifting) left-leaning populist, seek to forge stronger ties with China and invite greater Chinese investment in his country? Does China’s influence grow in our hemisphere? Yes, it will, and likely before the end of summer.
At risk is the degradation of the liberal world order we designed that has defined U.S. post-World War II leadership for over 70 years. The shining city upon a hill will begin to dim.
The business community has the responsibility to play the role of the Gipper and fight for American values in trade and immigration.
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