Overall, Mexico’s output of vehicles reached 2.93 million units in 2013. By 2020, almost 25 percent of all North American vehicle production will take place in Mexico, compared with only 10 percent in Canada and 65 percent in the United States. For both the U.S. and Canada, those numbers will represent a considerable decline in their share of the North American production pie.
The arrangement with Canada appears to be a more mutually beneficial situation—which makes sense, since our per capita GDP figures are similar. In 2015, Canada imported $11.9 billion more than it exported to the United States. And meanwhile, Canada’s overall trade and GDP have grown since NAFTA was implemented—as has US investment in Canada, according to a February article by David Floyd for Investopedia.5 However, Canada’s automaker unions have complained the country has also seen auto jobs flee to Mexico.
AMERICA FIRST
President Trump has opposed NAFTA since the beginning of his campaign, calling the agreement the “worst trade deal in history.” And in the first months of his presidency he told Congress that he would be renegotiating the agreement with our northern and southern neighbors. He’s not completely against trade agreements of any kind. As he said during his joint address to Congress, he “believe[s] strongly in free trade but it also has to be fair trade.”
President Trump also prevented a replay of NAFTA by canceling US participation in the Trans-Pacific Partnership—a twelve-nation trade deal negotiated by the Obama administration—just three days after taking office. As the New York Times reported, Trump canceled the plan, which was based on outdated agreements going back to the Cold War:
“We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed,” Mr. Trump told them, saying that from now on, the United States would sign trade deals only with individual allies. “I think you’re going to have a lot of companies come back to our country.”
The United States can no longer afford to be the world’s benefactor. It is time to fight for every advantage we can.
OBEYING THE RULES
But for Donald Trump to bring jobs back to the United States and reinvigorate the middle class, renegotiating NAFTA with Mexico and forming more favorable trade agreements with other countries will be only part of the puzzle. He will also need to deal with China—our largest trading partner.
According to the Office of the US Trade Representative, the United States bought $497.8 billion worth of goods and services from China in 2015 and sold the country only $161.6 billion in goods and services. That means Chinese companies made $336.2 billion off of trade with the US last year.
China achieves this lopsided trade ratio through a deliberate strategy of cheating and stealing.
As an illustration of China’s shenanigans, just look at the aluminum trade. China is the world’s largest producer of aluminum.
The Wall Street Journal reported in September 2016 that one of China’s largest aluminum producers was avoiding a US tariff by rerouting its product through several other companies to Mexico. The United States put the steep tariff on Chinese aluminum imports in 2010 after China flooded the US market with the metal a year earlier. China’s market surge in 2009 drove the price of aluminum down by 30 percent, which helped force eighteen of the twenty-three US aluminum smelters out of business.
After this, a US aluminum trade representative from California suspected a major Chinese aluminum producer, Zhongwang Holdings, was dodging the tariff. The newspaper reported that the representative chartered a plane to fly over one of the company’s factories in Mexico—where he found a stockpile of aluminum that amounted to 6 percent of the world’s supply. The owner of the company, Liu Zhongtian, is a member of China’s ruling Communist Party.
The Chinese chicanery that President Trump most often rails against is the country’s proclivity to devalue its currency. The Chinese government artificially lowers the value of its own currency, the yuan, to cause Chinese goods to be less expensive—and therefore more desirable—in the world market. Doing so naturally grows China’s economy at the expense of American companies, which can’t compete with unfairly lowered prices. This causes the United States–China trade balance—the $336.2 billion figure I mentioned earlier—to swell to even greater amounts.
Now, the International Monetary Fund said in 2015 that China is no longer manipulating its currency inappropriately. Fine. But that doesn’t undo the damage wrought by years of devaluation that cost the United States and other countries millions of jobs and trade. You can’t cheat at seventeen holes of golf, then claim a clean win because you marked the eighteenth hole correctly.
Another, more blatantly illegal, way that China is cheating at trade—and getting away with it—is by stealing business secrets from the United States and other countries.
The National Bureau for Asian Research found in its 2013 Commission on the Theft of American Intellectual Property report that China is stealing hundreds of billions of dollars of business and trade secrets from Americans every year. The exact amount is difficult to pin down, because no one can record all the pirated movies and software, stolen business practices, and counterfeit products China is fencing. This is, after all, a black market. But the authors of the intellectual property report found “annual losses are likely to be comparable to the current annual level of U.S. exports to Asia—over $300 billion.” The report cites Gen. Keith Alexander, who led both the US Cyber Command and the National Security Agency. He described what China is doing to the United States as “the greatest transfer of wealth in history.”
And William Evanina, who was the director of the National Counterintelligence and Security Center under US National Intelligence Director James Clapper, told Bloomberg Technology in November 2015 that cyberattacks are costing the United States economy $400 billion a year—and China was responsible for about 90 percent of those attacks. That would account for $360 billion.
The authors found this massive, systematic theft was costing the United States millions of jobs, hindering US innovation, and hurting economic growth in America.
But China is not the only bad player in world trade. The entire global trading system is rife with corruption that has festered over decades of inattention. The world stage has changed for trade, and our country has been stuck in the first act.
This is exactly why President Trump is taking an America-first approach to new trade deals and applying that principle when he renegotiates old ones. He told a group of Pennsylvania steel workers back in June 2016 that America “lost our way when we stopped believing in our country.”
“We allowed foreign countries to subsidize their goods, devalue their currencies, violate their agreements and cheat in every way imaginable, and our politicians did nothing about it,” he said. “Trillions of our dollars and millions of our jobs flowed overseas as a result.”
In April 2017, Trump met with Chinese president Xi Jinping, and they agreed to a framework that would open up China to more American exports. There is still a lot of work to be done, but by insisting on America first, President Trump has begun to reset American trade policy for the realities of the twenty-first century. America can no longer afford to be the world’s most generous patsy.
Callista and I were excited to be at the inauguration of President Trump. We had attended both of President Obama’s inaugurations as loyal citizens, but this was different. We knew president-elect Trump, and we liked him. It was fun watching his family come out. His speech was inspirational. We left with a feeling of hope that America had turned a corner. I had talked with the president-elect a number of times since the election about the vital importance of this key moment. He clearly had stopped and focused on what he wanted to say. I was impressed with how much the inaugural was his personal message to all Americans.
CHAPTER EIGHT
THE INAUGURAL
Americans in 2016 were intensely frustrated with the status quo and angry at the so-called l
eaders who were unable or unwilling to change things. Americans were tired of being told how to think by the IYI and the propaganda media, sick of toxic identity politics, rejecting fake news and fake education, and feeling the burden of the Great Transition. As a genuine outsider, Donald Trump was in tune with the American people instead of the elites in the media, academia, and government. That’s why Trump won.
Now that he is president, it is critically important that Trump maintains that connection with the American people. He must keep focusing on the issues that got him elected, and resist becoming captive to the priorities of the Washington elite.
As Trump’s first act as president, the inaugural address he delivered after he took the oath of office on January 20, 2017, was a good indication that he intends to deliver real solutions for the American people on the issues they care about.
It is worth taking some time to review this remarkable speech for two reasons.
First, it is a powerful distillation of the underlying issues we have discussed in the past few chapters that led to the rise of Donald Trump. Second, because it sets the stage for the focus of the rest of this book—how Trump and the Republican Congress must govern if they hope to succeed.
THE END OF THE RULE OF THE IYI
President Trump’s inaugural address spoke directly to the millions of frustrated Americans who have watched their communities decay while the intellectual yet idiots in our government and media claimed the economy was improving, unemployment was down, and America was leading in the world.
Just as Trump did throughout his campaign, the president assured those Americans that they would no longer have to listen to or be led by out-of-touch elites in the nation’s capital. The intellectual yet idiots will no longer chart the course of our country.
This was his specific condemnation of the old order in both parties. This should have been a very serious focus in the national media, because Trump was making a specific statement. It’s very powerful:
Today’s ceremony, however, has very special meaning. Because today we are not merely transferring power from one administration to another, or from one party to another—but we are transferring power from Washington, DC, and giving it back to you, the American people.
For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost. Washington flourished—but the people did not share in its wealth. Politicians prospered—but the jobs left, and the factories closed.
The establishment protected itself, but not the citizens of our country. Their victories have not been your victories; their triumphs have not been your triumphs; and while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land.
This comment reminded every appointee, civil servant, and member of the House and Senate what the Trump Revolution is about. It is about the American people joining together to reclaim the future of our country.
President Trump went on to say:
That all changes starting right here and right now because this moment is your moment, it belongs to you.… What truly matters is not which party controls our government, but whether our government is controlled by the people. January 20, 2017, will be remembered as the day the people became the rulers of this nation again.
President Trump made it clear that his administration would be about the people. This reliance on the sovereignty of the people is at the heart of both American populism and of the whole sense of what makes Trump so different.
He knows he will fail if he makes his presidency about Donald Trump. He will succeed only if he reorients the federal government toward serving the needs of all Americans, instead of catering to the priorities of the elite.
ENDING FAKE EDUCATION AND REJECTING TOXIC IDENTITY POLITICS
President Trump also pledged that American communities would soon again have “great schools for their children.” Great schools would be places where students in the United States gained true knowledge instead of reinvented history. And parents would not have to worry about their children being indoctrinated with liberalism—or any political perspective except the belief that America is the freest and greatest nation on earth.
Perhaps most important, President Trump addressed the problem of identity politics that has been dividing and sowing strife in our country for decades. He called for all Americans to celebrate their differences but to never forget we are one people under God.
At the bedrock of our politics will be a total allegiance to the United States of America, and through our loyalty to our country, we will rediscover our loyalty to each other. When you open your heart to patriotism, there is no room for prejudice.
The Bible tells us, ‘How good and pleasant it is when God’s people live together in unity.’ We must speak our minds openly, debate our disagreements honestly, but always pursue solidarity. When America is united, America is totally unstoppable.
This passage is important, because it expresses an aspect of President Trump’s personality that is completely overlooked by the media. To Trump, bigotry cannot exist within a patriotic heart. To be racist—to hold any other American in low regard based on their gender, religion, race or heritage—is to be completely unpatriotic.
RECOGNIZING THE GREAT TRANSITION
Looking at President Trump’s inaugural address, and the events surrounding it, you can see that he was keenly aware of all the social and economic forces that were obvious to ordinary Americans but seemingly ignored by our leaders. His recognition of the Great Transition was crystal clear. Other politicians on both sides of the aisle have for years touted America’s generous—in other words, disadvantageous—position on trade and foreign aid. A foundation of President Trump’s campaign was his willingness to say out loud what normal Americans were thinking: that our leaders have been making bad deals and spending our tax dollars to benefit other countries while getting little if anything in return.
Trump perfectly articulated this idea in his inaugural address:
For many decades, we’ve enriched foreign industry at the expense of American industry; subsidized the armies of other countries while allowing for the very sad depletion of our military; we’ve defended other nations’ borders while refusing to defend our own; and spent trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay.
We’ve made other countries rich while the wealth, strength, and confidence of our country has disappeared over the horizon. One by one, the factories shuttered and left our shores, with not even a thought about the millions upon millions of American workers left behind.
The wealth of our middle class has been ripped from their homes and then redistributed across the entire world. But that is the past. And now we are looking only to the future.… From this day forward, a new vision will govern our land. From this moment on, it’s going to be America first. Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families.…
We will seek friendship and goodwill with the nations of the world—but we do so with the understanding that it is the right of all nations to put their own interests first.
We do not seek to impose our way of life on anyone, but rather to let it shine as an example for everyone to follow.
President Trump expressed one simple fact in his inaugural address that has eluded so many of America’s recent presidents: his primary job is to lead the United States. Trump doesn’t want to be the president of the international order, or president of some collective group of nations. He is—and only wants to be—the president of one country.
President Trump has spent a lifetime negotiating deals. He understands that when he negotiates with other countries, the leaders of those countries are going to be rationally self-interested. It only makes sense for the United States to approach negotiations the same way.
With regard to foreign aid to other nations, Trump showed
in his speech that we are in a new era. While aggressive foreign aid programs made sense after World War II to rebuild and sustain our allies to defend them against Soviet influence, its usefulness has faded. The Soviet Union disappeared, and other countries have become wealthier. President Trump recognizes that we now need to fundamentally adjust our foreign policy. Instead of subsidizing the planet, we need to represent our own interests.
MOVING FORWARD WITH OPTIMISM, RESOLVE, AND CONFIDENCE
The media largely reported his inaugural address as “dark” since Trump expressed a realistic view of crime in America. Specifically, TV anchors jumped on Trump’s use of the words “American carnage.” The media was so obsessed with its own narrative that anchors, reporters, editors, and producers across the country completely ignored all the words around the phrase, which were entirely about strengthening communities in every part of the country:
Americans want great schools for their children, safe neighborhoods for their families, and good jobs for themselves. These are the just and reasonable demands of a righteous public.
But for too many of our citizens, a different reality exists: mothers and children trapped in poverty in our inner cities; rusted-out factories scattered like tombstones across the landscape of our nation; an education system, flush with cash, but which leaves our young and beautiful students deprived of knowledge; and the crime and gangs and drugs that have stolen too many lives and robbed our country of so much unrealized potential. This American carnage stops right here and stops right now.
Understanding Trump Page 13
