Five Ways President Trump Can Change The Trade Dynamic And Create Great Jobs
Attendees at the 2017 International Consumer Electronics Show in Las Vegas try out the ACIGI Cyper Body Fit Fx FJ-700 exercise machine. Given the growing importance of foreign markets to the U.S., President Donald Trump's idea for tariffs might not be the best idea for aiding American companies. (Mike Nelson/EPA/Newscom)
GARY SHAPIRO03:00 PM ET 01/20/2017
After the nation watches Donald Trump swear the presidential oath of office, the world will watch how he positions America as the leader of the free world.
Before the inauguration, the world was watching something very different. More than 175,000 professionals — including 55,000 non-U.S. executives — gathered in Las Vegas for CES 2017 to marvel at the miracle of technological innovation. If CES showed the world anything, it is that there is a global market for ingenuity — a market with great potential for job creation and to address global challenges. But for that market to thrive, we must have trade deals that work.
Candidate Trump promised to revisit trade agreements with the goal of expanding U.S. manufacturing, creating higher-paying U.S. jobs and expanding the economy. Since Election Day, he has charged his pick for commerce secretary to lead trade policy and created a White House role for an economist not favorable to trade with China. This may be innocuous — the secretary of commerce will be the liaison to business, and the other White House trade advisors will handle other broad pieces that many don't think of as trade, such as education, infrastructure, advanced automation and technology.
But ultimately, it seems when Trump talks trade, he's looking to create an entirely new, bottom-up approach to trade policy. Given his goal to create a competitive, modern trade structure, here are five worthy, achievable objectives:
Modernize — don't scrap — Nafta.
Since its inception, the North American Free Trade Agreement (Nafta) has boosted U.S. trade, lowered U.S. consumer prices and increased our economic growth. But Nafta is not perfect. The 1993 agreement did not account for the internet and the digital economy. Nafta must be modernized to address cross-border data flows, prohibit forced data localization and reflect balanced copyright policy. Nafta can also harmonize standards to eliminate conflicting and costly energy-efficiency requirements, as well as other unnecessary technical trade barriers. This is the approach advocated by Trump advisor Anthony Scaramucci in his early-December presentation to the problem-solvers group No Labels.
Rationalize our trade relationship with China.
Rather than blocking Chinese access to our markets, insist on parity in our economic relationships. Americans cannot do business in China without a majority Chinese partner, nor can Americans easily buy real estate in China. Meanwhile, Chinese citizens invested $300 billion in the U.S. real estate market from 2010 to 2015. Requiring parity in how we treat each other's citizens and companies will level the playing field between our countries. Additionally, we can balance China's influence by exerting leadership in Asia and kick-starting the Trans-Pacific Partnership.
Grow jobs by making America the world's best business environment.
Imposing tariffs on imports will add costs for U.S. consumers and businesses, while inviting retaliation from our trading partners. Instead, we can grow jobs and spark our economy by lowering our corporate tax rate and enabling U.S. companies to repatriate funds held abroad. We can reform our immigration system to encourage the world's best and brightest to build businesses in the U.S.
We must ensure the U.S. has a world-class physical and digital infrastructure. And we can remove barriers to innovation like the recent Department of Labor overtime rule and a legal system that incentivizes nuisance patent lawsuits.
Push back on European Union attacks on American companies.
Frustrated by its inability to create new innovative companies, the EU increasingly uses ambiguous laws to restrict or demand huge payments from successful American companies such as Amazon, Apple, Intel, Qualcomm and Google. President Trump is the kind of leader who will push back strongly and effectively.
Strike a trade agreement with Great Britain.
Historically, Great Britain has been our closest ally, and the recent Brexit speech by British Prime Minister Theresa May offers Trump an opportunity to create a trade agreement that would cement the relationship with our parent nation. It would also send a message to the EU to change its anti-American tone, and could send a message to other pro-American countries such as Germany, which may want to consider a different approach than the stifling rules and huge costs imposed by Brussels.
We're living in a rapidly changing world and America chose a new leader who literally wrote a world best-seller on deal making. "The Art of the Deal" describes how Trump, as a young man, envisioned a better future where everyone else saw grime and despair. He created a gleaming modern hotel next to Grand Central Station where a decaying structure stood. He built a Central Park ice skating rink at a fraction of the cost and time of prior efforts by the city government. And he imagined and sold a convention center where only empty train tracks lay.
Businessman Trump was a doer. Candidate Trump tore up the campaign rule book and won. President Trump has the opportunity to make positive changes for trade, keeping the U.S. as a leader in great jobs and innovation.
Shapiro is president and CEO of the Consumer Technology Association, the U.S. trade association representing more than 2,200 consumer technology companies, and author of the New York Times best-selling books "Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses" and "The Comeback: How Innovation Will Restore the American Dream." His views are his own. Connect with him on Twitter: @GaryShapiro.