Trump's Blindness On Trade Works Because Many Others Are Blind

Trump's appointees responsible for trade policy just released a report which argues that US trade policies such as NAFTA and WTO are responsible for the large loss of manufacturing jobs.  Trump won the election by convincing enough supporters in the rust belt that their jobs would return if those policies were reversed.  There is a lot of evidence against that claim.

After the end of the Korean War in 1953 to 1990,  manufacturing jobs fell from 32% of non-farming employment to 16%.  That was well before NAFTA and the WTO which enabled China to enter the international trade market.  Manufacturing jobs in Germany have also declined.  They fell by 50% from 1970 to 2015 despite government efforts to retain manufacturing jobs.

There are a lot of factors that have contributed to the loss of manufacturing jobs in addition to trade agreements.  Automation and other technologies have greatly reduced the need for manual labor (in manufacturing as well as services).  Moreover, a lot of the jobs lost in developed countries have been in low skilled manufacturing jobs that did not pay very well. Many of those jobs were in small towns that came out strong for Trump.

There is little doubt that the availability of lower cost labor in developing nations has contributed to job loss in developed countries.  However, it has enabled US firms to sell more products to those countries as living standards improved in those countries.  It has also made many products more available to US consumers because of lower prices.  To some extent lower prices compensate for lower wages in the US.

The major point of this article is not that globalization has proceeded without harm to many workers in developed countries.  The point is that eliminating trade agreements will not bring those jobs back to the US.  They were falling before the trade agreements that Trump plans to reverse.  Reversing the trade agreements may also cause our trading partners to take steps that are harmful to developed nations.  It would be helpful if governments in developed nations took steps to redistribute income from those who have reaped most of the benefits from trade to those who have been harmed by trade. That has been prevented by the influence that the benefactors have over the government.  Trump's cabinet is loaded with major campaign contributors whose taxes Trump plans to cut.