President-elect Donald Trump has variously proclaimed that he would “rip up” existing trade agreements, renegotiate the North American Free Trade Agreement (NAFTA), and impose a 35 percent tariff on imports from Mexico and a 45 percent tariff on imports from China.
Mr. Trump ran on a platform that rejects the notion that trade agreements have worked to America’s favor. He promised some major reversals of trade policies. Will he dump trade?
President-elect Trump is already marching through his first 100-day agenda. Near the top of that list is withdrawing from NAFTA—or re-negotiating it. He should work with Mexico and Canada to create a North American Infrastructure Bank instead of re-opening an outdated NAFTA agenda.
North America receives a B+ on the new George W. Bush Institute Scorecard, outperforming other trade groups such as the EU, which gets a B, and Mercosur, which only achieved a D-.
Last year, real estate research group Zillow determined that homes located within a quarter-mile of a Starbucks coffee shop increased in value by 96 percent. Starbucks is a premium brand. So is North America. We’re lucky in the United States because Canada and Mexico are the kind of neighbors that increase our value.
Every trade negotiation is an exercise in pushing the government-imposed cronyism out of the way and freeing up space for markets to work, which is good for consumers and for economic freedom.
On the average day, approximately $2.4 billion worth—2 million tons—of goods move between the United States, Canada, and Mexico. Co-production of world-class products made has given North America an advantage over other regions in the world.