President-elect Donald Trump over the weekend continued to exasperate free-trade conservatives, declaring in an interview with Fox News that allowing businesses to locate their production facilities where they want isn’t free trade, but rather, “dumb trade.”
The comments came in a discussion with Fox News Sunday host Chris Wallace when Trump was asked if his policy of personally intervening when individual businesses decide to relocate production to other countries is consistent with Republican priorities.
Trump last week pressured executives at the parent company of Carrier Corp., which makes appliances including air conditioners and furnaces, not to go forward with a plan to move one of the company’s Indiana-based plants to Mexico. He won a partial concession, saving hundreds of jobs, at least temporarily.
Wallace began by pointing out that Trump himself runs a company, and asking how he would have reacted if President Barack Obama had called him up and said, “Donald, this is how I want you to do business.”
Trump: I would have been honored.
Trump: I don’t have to do it myself. We have great people. We have top, top smart people. But it’s so easy to do, and we’re going to have to impose a major tax on companies that leave, build their products and think they’re going to sell it right through our border like we’re a bunch of jerks.
Wallace: But what about the free market, sir?
Trump: That’s not free market when they go out and they move and they sell back into our country.
Wallace: But that’s the free market. They made a decision--
Trump: No. That’s the dumb market. That’s the dumb market. I’m a big free trader, but it has to be fair. So what’s happened is we have lost, over a period of years -- short years -- 70,000 factories in this country. Chris, 70,000. I always tell people I think it’s a typo...we’re being stripped of our jobs.
Trump went on to say that his preference is to entice businesses to stay in the U.S. by reducing taxes and slashing regulations. However, he said, faced with companies that insist on moving overseas, “the way you stop it is you impose a tax.”
The President-elect has suggested that an appropriate levy would be 35 percent on goods that American companies produce overseas and try to sell back into the U.S. market. Trump’s trade position, for traditional free-trade conservatives, is at best frustrating. At worst, it’s maddening.
“Number one, there is an obvious amount of hypocrisy here,” said Scott Lincicome, an international trade attorney and an adjunct scholar at the Cato Institute, a libertarian think tank in Washington. “Donald Trump has spent years and years producing clothing abroad and shipping it back to the U.S., investing abroad, and of course using foreign workers at his own hotels here in the U.S.”
He added, “I don’t begrudge him for doing that.” However, he said, the claim that he would have been “honored” if President Obama had used the Oval Office to pressure him to bring production back to the U.S. “strains credibility.”
“He really hasn’t thought about these issues much at all,” said Lincicome. “To just simply reply that this is the ‘dumb market’ is clearly the answer of someone who has not thought about the impact of an outsourcing tax.”
He continued, “When he does mention a statistic it’s a meaningless one. 70,000 factories? American manufacturing output is at an all-time high and we’re still the number two manufacturer on the planet. Even when he does get past the name-calling, the numbers he ‘knows’ are meaningless.”