Donald Trump is making more news on the trade front. On “Meet the Press,” he threatened to pull the U.S. out of the World Trade Organization.
There’s a problem with that. The WTO is the place the U.S. goes to block unfair trade practices, like the ones Trump complains about.
On “Meet the Press,” Trump called the WTO a “disaster.” But it turns out, the U.S. has had pretty good luck using the WTO to block China.
“In at least three occasions in recent years, we’ve won cases in the WTO and gotten the Chinese to back off,” said Howard Gleckman, a senior fellow at the Tax Policy Center.
Without the WTO, we could go back to the bad old days, letting our ambassadors iron out trade disputes. How effective is that?
“Not very,” Gary Hufbauer said, a former trade negotiator and now a senior fellow at the Peterson Institute for International Economics.
Hufbauer said there are so many more trade disputes than there used to be, ambassadors would be overwhelmed.
“Ambassadorial time is limited,” he said. “They always have a lot of things on their plate.”
Hufbauer said we could just raise the tariffs, or taxes, on foreign goods we import or even start a trade war.
“A trade war — it may sound good, and it may stir up populist feelings. But ultimately it’s going to have a negative impact on the U.S. economy and ultimately cost jobs,” said Peter Cohn, a research analyst with Height Securities.
Because, he said, other countries would raise tariffs on things we export to them. We’d export less. And jobs here would be lost.
Haufbauer is also worried about that. But, he said, Trump calls himself a deal maker, and may be counting on making deals — so we wouldn’t have to do things like leave the WTO.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.