Would Trump’s trade threats work? Many experts are skeptical [View all]
Donald Trump has promised to shred America’s trade deals and impose fines on imports from Mexico and China. ... By attacking trade agreements, the Republican presidential front-runner is channeling the belief, common among many of this year’s angry voters, that foreign competition is robbing American jobs and shrinking wages.
Levying those tariffs would probably require congressional approval. It would violate commitments the United States made when it joined the North American Free Trade Agreement in 1994, and the tariffs would trigger retaliation from Mexico.
No problem, Trump says. He’d rip up NAFTA. He could exit the agreement provided he gave Mexico and Canada six months’ notice. Experts differ on whether Congress would have to authorize this.
If Trump replaced the low tariffs provided by NAFTA and World Trade Organization rules with punitive tariffs on Mexican and Chinese goods, he probably would ignite a trade war that would raise prices for Americans and cause diplomatic havoc. Economists recall that the 1930 Smoot-Hawley legislation, which raised tariffs on imports, inflamed trade tensions and worsened the Great Depression.
http://www.dailynews.com/government-and-politics/20160313/would-trumps-trade-threats-work-many-experts-are-skeptical
Something tells me that Trump will not wait for congressional approval. Krugman thinks that Trump may well follow through on his threats "as part of a reign of destruction on many fronts."
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