Will a Trump Presidency Destroy the US Economy?

The Great Depression did not happen because of the stock market crash of 1929. It happened because the USA started a trade war with the passage of the Smoot Hawley Act.  A major theme of Donald Trump’s candidacy is that nations across the globe are taking advantage of the USA and that we need to toughen up on our trade laws. Will a Trump presidency destroy the US economy? The Washington Post reports that if Trump is elected and follows through on his proposed trade policies there will be trade wars that will cost U.S. workers 4 million jobs.

Donald Trump’s trade policies could shock the U.S. economy back into a recession and cost 4 million private-sector jobs if the Republican presidential nominee follows through on his campaign pledges in the White House, according to a new report.

Trump has said he would consider pulling the United States out of multinational trade deals, or renegotiating them, and impose high import tariffs on goods and services from China and Mexico. Those actions probably would result in retaliatory measures against U.S.-made products, sparking trade wars whose effects could spill beyond traditional trade sectors, the Peterson Institute for International Economics concluded in the analysis released Monday.

The job losses would disproportionately affect lower-income and lower-skilled workers, the report stated.

The reports states that millions of Americans who do not think of their jobs as being tied to international trade will get pink slips and be out looking for work. When the market crashed in 1929 people on Main Street had not idea that what hurt Wall Street would eventually hurt them. Then congress passed protectionist trade tariffs and the world economy tanked. Experts fear that a Trump presidency with policies advocated by Mr. Trump would destroy jobs and the US economy.

How a Trade War Would Hit Home

Sometimes it is hard to get one’s head around sets of really big numbers relating to national trade and the economy. It can be easier if one looks at effects close to home. CNBC reports on how a Trump trade war would hit various states.

If your state exports goods and services to China or Mexico, you may want to pay closer attention to the presidential candidates’ positions on global trade.

After decades of liberalized trade deals and lower tariffs helped boost import and export traffic around the world, the engine of global trade is slowing. That’s one reason the overall pace of the global economic growth remains relatively weak.

That wave of globalization has also produced a backlash – from American voters who’ve lost their jobs to British voters who go to the polls Thursday to decide whether to reclaim their independence from the European Union.

The article is a good read as it shows state by state information about where imports come from and where exports go to. Trade deals with both Europe and the Asia Pacific are in the works. These need to be well conceived so that the USA is not hurt but that does not justify a trade war which would damage the US economy and take jobs away from American workers.