In his presidential campaign, Donald Trump has consistently railed against the “stagflation” that occurred during the Carter administration, referring to the economy’s rising unemployment rates as being proof that the government has failed. During the debates in September, he made reference to the United States “growing trade deficit” with China. And in his recent foreign policy speech, he expressed his desire for “fair trade,” a phrase that many experts believe is a misnomer at best. What is fair trade exactly?
If you’re unfamiliar with the term, it refers to “fair” trade when trading partners engage in a variety of economic activities. The concept can also refer to the process by which trading partners to negotiate and trade a variety of economic issues. When one party engages in fair trade, their trade deficit reflects the difference between the value of goods or services received in the country of export and the value received in the country of import. Fair trade deals are generally considered beneficial for both sides because it results in both nations receiving a fair amount of imports and exports, and it decreases the differences in their currency values.
However, fair trade deals can be good for individual consumers. A few examples of how fair trade can benefit consumers include the reduction in price disparity in a variety of products, including apparel, toys, books, movies, CDs and movies, clothing, and accessories. The result of fair trade is an increase in consumer purchasing power because the cost of living increases. In addition, this process reduces the disparity in currency values, thereby allowing consumers to make more informed financial decisions.
One of the main concerns that critics of international trade have is the effect that it has on the global economy. Critics argue that these trade agreements (or “trade policies”) lead to an influx of illegal immigrants into the United States. They also contend that these types of agreements increase the risk to U.S. businesses and employees by driving down the value of the dollar, causing the United States to lose jobs and suffer economic downturns.
These concerns are unfounded. Although trade agreements can affect the value of the currency of a country, they cannot devalue it to the point that it becomes unprofitable. On the contrary, the agreements in fact serve to improve the nation’s economic health by reducing the disparity in the value of the currency of two countries, while allowing those countries to retain their respective trade advantages.
The U.S. trade deficit is reduced because trade agreements increase the productivity, and innovation, which in turn improves the country’s gross domestic product (GDP) in both countries. This increased productivity creates jobs in America and contributes to overall economic growth in the long run. Furthermore, the agreements allow people from other nations to purchase American goods and services and contribute to the growth of the U.S. economy. economy because they will pay less for the items they wish to purchase because the prices they paid to buy those products will be substantially less.
While some critics of international trade claim that these agreements are not beneficial to the United States and its citizens, most Americans do not agree. According to recent surveys, many Americans believe that these agreements actually benefit the U.S. economy in several ways. These include but are not limited to: increased tax revenue, fewer lost jobs, less expensive imported goods, lessened trade deficit, and improved quality of life. These beneficial outcomes also contribute to stronger American economic leadership and better relations with our major trading partners.
So, the debate over trade agreements is not necessarily a fair fight. When debating Donald Trump, his rivals, and the political candidates who support them, voters need to be cautious in interpreting the meaning of “fair” when it comes to trade. If Donald Trump can successfully make his case, his opponents might have to take a lesson from his example and start to embrace free trade rather than the failed protectionist approach.