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Peterson Institute Slams Trump's Trade Policies

by Scott Hamilton,, Washington

20 September 2016

The Peterson Institute for International Economics has issued an analysis of the trade policy proposals of both US presidential candidates and has pointed out the economic damage both could cause.

PIIE President Adam Posen wrote: "Clinton's proposed trade and international economic policies would damage American well-being, primarily but not solely due to her stated opposition to the Trans-Pacific Partnership and to further economic integration. The policies proposed by Trump are another matter altogether."

Donald Trump's has said he would impose a 45 percent tariff on imports from China (and also, by implication, Japan) and a 35 percent import duty on selected goods from Mexico; cancel existing US trade agreements (all of them with reciprocal tariff reductions) and renegotiate the North American Free Trade Agreement (NAFTA); and possibly withdraw from the World Trade Organization. This "could unleash a trade war that would plunge the US economy into recession and cost more than four million private sector jobs," Posen said.

He pointed out that "his stated approach to the global economy of waging trade war and protecting uncompetitive special interests would be disastrous for American economic well-being and national security. While Clinton's stated trade policy would be harmful, Trump's stated trade policy would be horribly destructive."

PIIE also concluded that Trump could act on his policies with little difficulty, at least in the short term. "Our analysis shows that the next president could do almost all of what he or she proposes, at least temporarily," it said. "There is ample precedent and scope for a president to unilaterally raise tariffs. Any effort to block Trump's actions through the courts, or amend the authorizing statutes in Congress, would be difficult and time consuming."

TAGS: tax | free trade agreement (FTA) | law | tariffs | World Trade Organisation (WTO) | trade treaty | China | Mexico | agreements | United States | import duty | trade | Japan

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