One perspective:
Blog Post On Milton Friedman Lecture on Free Trade

Quote:

In the international trade area, the language is almost always about how we must export, and what’s really good is an industry that produces exports. And if we buy from abroad and import, that’s bad. But surely that’s upside-down. What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation as Adam Smith put it, is to arrange things, so we get as large a volume of imports as possible, for as small a volume of exports as possible.

This carries over to the terminology we use. When people talk about a favorable balance of trade, what is that term taken to mean? It’s taken to mean that we export more than we import. But from the point of view of our well-being, that’s an unfavorable balance. That means we’re sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don’t regard it as a favorable balance when you have to send out more goods to get less coming in. It’s favorable when you can get more by sending out less.

Fair to say that HRC is way closer to Friedman's view on trade than TRUMP is? TRUMP is? I would say so.

Furthermore this point is made by the economist blogger:

So erecting barriers to trade might not be such a good idea such as TRUMP (and Bernie) seeminly want to do.

Thoughts?

Trump doesn't want to erect barriers to trade. He wants to make trade ACTUALLY free, rather than free for others to enter the American market, while tariffs and conditions are put on our goods going in (China being the most egregious example).

It's Hillary who isn't for free trade. Trump wants free trade (which we don't currently have).

From Trump's China policy:

There's a lot more detail at the link. Trump is spot on on this - everything he says China does here is true. Their failure to abide by free trade rules that they've actually agreed to costs the US hundreds of billions every year, for no benefit to the global economy.

The media has this so backwards it's absolutely ridiculous.

Thanks TS. I will have a look at the link.

Immediate thoughts:

-- Well yeah Bernie most definitely differs from TRUMP in wanting to erect barriers to trade. Bernie policies on trade would be a disaster if implemented.

-- On TRUMP, what leverage does TRUMP have with China other than retaliating with erecting barriers to trade?

-- Aren't Chineese policies essentially lowering the price of the goods and services they export and thus subsidizing the consumers of those goods and services?

Yes and no. There's a short and a long term here. To address the argument in your OP:

Now, the formula above is true - in the short term. The trouble is, that we're giving them redeemable credits PLUS interest on our future output to pay for this imbalance. Let me give you an analogy that might make this clear.

Do you see the problem? Yes, we can temporarily improve our standard of living by putting stuff on credit cards, but in the long run, we're lowering our standard of living (and those of our children) because we're actually accumulating debt burdens, on which we have to pay interest.

We're already seeing this in the US. The Chinese are using the money they steal by cheating at trade to buy US and global businesses, which means they take the profits back out to China (rather than us getting the profit). If you continue this for long enough, we increasing become a serf class to dictatorial communist country.

Many of the lower prices come from greater environmental damage (Chinese production is highly energy inefficient and emits far more CO2 per unit of output), and lower quality products. One example is aluminum cladding used on buildings. Western products conform to fire standards, which contains an inflammable mineral-based core which is more expensive but saves lives and property; the Chinese cheat at this system by wrapping aluminum around very cheap polyethylene, which is highly flammable, and then claiming the product meets safety codes, which it doesn't. Here's an article about that.

So have we really gained anything? No. We're buying products that emit far more CO2 in their production, for which there were already perfectly good factories to make them. These factories now have to be closed down and repurposed amid cheap ripoffs from China, which is a hidden economic drain. And for our trouble, we're getting products which don't conform to important fire safety codes, and will probably result in extra cost down the road.

If we're going to import these things, it would have made far sense to relax fire safety codes such that the product can be made at a far cheaper price locally. Or to enforce the same codes on both US and Chinese manufacturers. But no one in government wanted to do that, or are asleep at the wheel, so we have a situation where there are two very unequal sets of rules over how to make the same product. Is that free trade? It's pretty much the opposite of free trade.

This is a tiny example of the problem, which is enormous.

Another example: if a Western company wants to get access to the Chinese market, they have form a join venture with a local firm, who is the controlling partner, and give access to all of their intellectual property. Meanwhile, the Chinese are free to sell whatever goods they want here however they want.

A recent example of this is Boeing, who, if they want to sell planes to China, have to hand over all of their hard won and incredibly expensive research and knowhow to the Chinese government. This is completely illegal under WTO, and is basically a transfer of wealth from innovator to parasite. The technology that's transfered is going to a dictatorial communist country with rather scary expansionary aims in Asia, who are already using it to build up their military and become increasingly aggressive toward neighbors.

Obama and Clinton are bat**** insane and asleep at the wheel on this stuff. They support policies that are basically anti American free trade. Trump is the only one calling it out for what it is.

@TS - I follow your arguments and I will perhaps give a more in depth response later. One thing I want to get is your take on is US trade policy with foreign auto manufacturers. If I understand correctly companies like Toyota are required to manufacture a certain number of vehicles in the USA and hire US workers accordingly. Do you think that this a good working model for how trade deals should be constructed?

Trump sends his manufacturing jobs overseas. Seems easier to judge him based on his past actions as opposed to what he says he'll do.

His campaign is based on resentment, and wrt trade that resentment is aimed at unskilled labor abroad. His supporters want well-paying, low skill jobs that aren't competitive globally. I'm sorry to say that we can't put the genie of globalism back in the bottle. (In so much as it hurts American workers. I'm glad it helps foreign workers live better lives)

To be fair I think TRUMP would claim that trade deals are too one sided and being a businessman he is just playing by the rules, he doesn't make the rules. No matter who wins the POTUS election we're going to see more trade agreements so I agree that TRUMP is pandering. What I've seen on the news is that TRUMP is +31 among unskilled white male adults. So his appeal targetted directly at them is working.

So we expect him to get in office and make laws that disadvantage himself, when he's worked his whole life to take every advantage & government handout he could get?

Color me skeptical.

He doesn't need to be president to keep jobs in America. He just has to have the moral courage to do so. He didn't, so the one aspect of his run that has a history shows he's not going to try to help American workers.

I am not defending TRUMP at all. Call him whatever, I don't really care. I am a little surprised that this seems to be a key campaign issue and one that is actually damaging to HRC it seems but there doesn't seem to be that much interest in it.

To be fair, both candidates are talking "better" trade deals. Look I don't know all the intracies of US trade agreements but I have enough confidence in what has been negotiated that they are probably ok. I've read hard core laissez-faire ecoconomists even advocate removing all trade barriers and given what Friedman wrote I can certainly understand that position. Also the Smoot-Hawley Tarrifs are seen as exacerbating the economic disaster called the Great Depression. So I am definitely not an advocate of more protectionism in trade. In fact I find the proctectionist rhetoric really troubling. Pretty much just another reason why I'm sitting this POTUS election out.

Same. I find it troubling for the same reason I find the US's default position on clean energy to be "wait until our coal/petrol overlords say it's okay".

Sure, we could lead on this issue. We could lead on globalism and spreading employment opportunities to the rest of the world. Or we could pretend the problem isn't happening and let some other country become the leader, tech innovator, etc.

I don't want other countries to get ahead of us wrt green energy and I don't want some other country to get ahead of us wrt advanced economies. We can't close our economic walls and just hope we can keep low-skill manufacturing jobs in the country at greatly exaggerated wages. It's an unsustainable position.

Trade Isn't Killing Manufacturing Jobs

Quote:

The number of manufacturing jobs in the United States has indeed been in a long decline since the late 1970s, but that disguises the true story of American manufacturing. Nostalgia for a bygone era blinds politicians and voters alike to the reality of a revitalized sector of the American economy that is thriving in a global market.

American factories and American workers are making a greater volume of stuff than ever — high-tech, high-value products that are competitive in markets around the world. In the last 20 years, which include enactment of the North American Free Trade Agreement and China’s entry into the World Trade Organization, real, inflation-adjusted U.S. manufacturing output has increased by almost 40%. Annual value added by U.S. factories has reached a record $2.4 trillion.

.....

The political anger about lost manufacturing jobs should be aimed at technology, not trade. According to a recent study by the Center for Business and Economic Research at Ball State University, productivity growth caused 85% of the job losses in manufacturing from 2000 to 2010, a period that saw 5.6 million factory jobs disappear. In that same period, trade accounted for a mere 13% of job losses.

.....

Global trade has put some Americans out of work. But the total numbers are small compared with the overall national job churn. Indeed, millions of U.S. jobs are eliminated each year by technology and changing consumer tastes, only to be replaced by new jobs that are being created by the same dynamic forces.

The right response to anxieties about trade is to invest more in education, retraining and enhanced labor mobility, not to pick trade fights with other nations that would put in jeopardy the success of America’s modern, competitive manufacturing sector.