Despite his claims to the contrary, a free-trader he is not.
JIM SWIFT
TWS
The Weekly Standard
Will Trump Turn on Raisin Bran?
Despite his claims to the contrary, a free-trader he is not.
4:33 PM, Sep 15, 2015 • By JIM SWIFT
For anyone who has followed Donald Trump on the stump, undoubtedly they've heard The Donald spin a tale of what he would do as president if, say, Ford plans to build a new plant outside of the United States.
Trump has also gone after Nabisco, which is relocating its Oreo factory from the United States to Mexico. (Trump, a former Oreos commercial actor, takes his Oreos seriously.)
Reuters is reporting that the Kellogg Company, based in Battle Creek, Michigan is planning on expanding. In Africa.
Kellogg Co. is setting up a joint venture with the African arm of Singapore’s Tolaram Group to bolster its breakfast and snack food offerings in West Africa.
Kellogg will also pay $450 million for a 50 percent stake in Lagos, Nigeria-based Multipro, a food sales and distribution company owned by Tolaram, with an option to buy a stake in Tolaram’s African unit.
Tolaram Africa Foods owns 49 percent of Dufil Prima Foods Plc, the maker of Indomie noodles, Minimie snacks, Power oil and Power pasta.
Kellogg said it intends to develop snacks and breakfast items for the West African market through the joint venture.Will Trump change his stump line to read?
So what would President Trump do? Here’s what happens. I’ll say I don’t like this deal. It’s no good for our country. I’ll get a call from the head of Kellogg... Trump usually then goes on to tell audiences that he will unilaterally impose tariffs on the products should they build a plant there, certainly violating international trade agreements. (George W. Bush did this with steel, which was later ruled illegal. The tariffs were lifted to avoid a trade war that would further hurt consumers.)
Since Kellogg, like Ford, is a multinational brand, it would make sense that they would want to source the production of their prodcuts globally. Like diapers, shipping boxes of cereal across the globe is basically paying to ship a little bit of product, and a lot of air. It is expensive and it makes no sense since foreign consumers wouldn't want a $10 box of cereal.
So will The Donald make significant changes in trade agreements? Unclear. Will he turn back time and repeal or modify NAFTA? Unlikely. Will he convince recently bankrupt GM and Chrysler's workers -- whose legacy healthcare and pensions helped usher in the bankruptcy -- to take less money or accept fewer benefits? (While Ford did not go bankrupt, their contracts with the UAW are similar.)
No, Trump's answer is to bully companies with threats of illegal sanctions that will trigger a trade war that will hurt American consumers and exporters. (President Obama ran into this for the Democrats' failure to comply with NAFTA's Mexican Trucking provision, which was eventually resolved.)
Realizing the NAFTA repeal and convincing labor union workers to make less are not likely achievable, even for the author of The Art of the Deal, something could be done about corporate taxation and regulatory costs. A better goal would be to make the U.S. a better place to do business, and that is certainly achievable.
Trump's supposedly "free trade" rhetoric on the stump may sound nice but it isn't grounded in economic or political reality.
Further, what conservative wants in a president who is essentially promising a government-led economic policy? Obama gave us one of those, and conservatives were right to criticize it.
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