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Fact Checkers: On Trade, Trump Has A Large Deficit With The Truth

A book by Washington Post fact checkers Glenn Kessler, Salvador Rizzo and Meg Kelly concludes America’s largest deficit may be Donald Trump’s deficit with the truth about trade. The book, Donald Trump and His Assault on Truth: The President’s Falsehoods, Misleading Claims and Flat-Out Lies, contains an extended section on international trade. Kessler, Rizzo and Kelly conduct extensive fact-checking and find many of Trump’s statements on trade may belong in the fiction section of your local bookstore.

Phantom Factory Openings: In a section devoted to the “Strange Case of the Phantom Factory Openings,” the authors provide four case studies. The old joke is a politician will take credit for the sun rising in the morning. Trump took this joke in a different direction by taking credit for factories built or approved before his time – or that were never built at all.

In December 2019, Trump said, “Just a few months ago, I visited the new Shell petrochemical plant in Beaver County. At $6 billion, with a B, it is the largest investment in Pennsylvania history. We’re ending decades of failed trade policies that devastated communities all across the state.”

Kessler, Rizzo and Kelly explain what listeners to Trump’s speech may not have known: “Trump falsely suggests the Shell plant is the result of his trade policies. Royal Dutch Shell announced the plant in 2012, under the Obama administration, after receiving one of the largest tax incentives in Pennsylvania’s history.”

In January 2020, Trump said, “They have this Army tank plant right, in Lima . . . It was closed, they announced it was closed. It was all set to close. I said you can’t close this plant . . . So, that was something I did that I’m very proud of because I really overrode a lot of talented people that want to close it.”

“This story is a fantasy,” according to Kessler, Rizzo and Kelly. “Trump has steered more funding to this tank plant in Ohio, but it was never in danger of closing.”

In November 2019, Trump declared, “Today I opened a major Apple manufacturing plant in Texas that will bring high-paying jobs back to America.”

“Trump did not open this Texas plant, and is not even an Apple plant,” note the authors. “It is a Flex Ltd. plant that has been making Mac Pro computers since 2012 under a contract with Apple.”

In May 2019, Trump said, “Yesterday, as you probably saw, I was in Louisiana opening up a $10 billion LNG plant that would’ve never been approved under another type of administration, never.”

Sempra Energy announced it would build the plant in 2012 and the Federal Energy Regulatory Commission approved the plant in 2014.

Daniel Dale of CNN recently reported an addition to this genre: “Trump repeats his usual false claims about how there hadn’t been an auto plant built in Michigan in 40 years until he came along and how he pressured Japan’s prime minister and then ‘the next day’ Japanese auto companies announced five U.S. plants. (This story is imaginary.)”

Who Pays For the Tariffs: “Just so you understand, China, forever, never paid us 10 cents,” said Trump (November 9, 2019). “Now we have – literally, we will soon have, literally, hundreds of billions of dollars coming in from China. We never got anything from China.”

This is not accurate. “China doesn’t pay the tariffs,” note the authors. “Essentially a tax, the tariffs are generally paid by importers, such as U.S. companies, who in turn pass on most or all of the costs to consumers or producers who use Chinese materials in their products. . . . So, ultimately, Americans foot the bill for Trump’s tariffs, not the Chinese.”

Trump also claimed tariffs are great for economic growth. Trump tweeted: “The unexpectedly good first-quarter 3.2% GDP was greatly helped by tariffs from China. Some people just don’t get it!” (May 13, 2020).

“Nope,” write Kessler, Rizzo and Kelly. “Tariffs reduce economic growth, as even Trump economic advisor Larry Kudlow acknowledged in an interview on Fox News Sunday the day before this tweet. He said it would reduce growth by ‘two-tenths of 1%’ of the gross domestic product, which translates to $40 billion. Other estimates are bigger.”

Amazing Trade Deals (If Trump Negotiates Them): “Trump regularly attacks the North American Free Trade Agreement, which took effect in January 1994, as the worst trade deal ever,” write Kessler, Rizzo and Kelly.

The authors quote a 2015 report from the Congressional Research Service: “In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters,” the report concluded. “The net overall effect of NAFTA on the U.S. economy appears to been relatively modest, primarily because trade with Canada and Mexico accounts for a small percentage of U.S. GDP [Gross Domestic Product]. However, there were worker and firm adjustment cause as the three countries adjusted to more open trade and investment.”

“So NAFTA was not as bad as Trump claimed,” according to Kessler, Rizzo and Kelly. “But once he struck a deal for a modest retooling – which was dubbed the United States–Mexico–Canada Agreement (USMCA) – he immediately proclaimed he had struck a deal that was ‘incredible,’ ‘wonderful,’ ‘great’ and ‘maybe the best trade deal ever made.’ About two-thirds of the deal was borrowed from the Trans-Pacific Partnership, the trade deal Trump scrapped at the start of his term, deeming it ‘one of the worst trade deals ever negotiated.’ . . . Analysts say the USMCA is 85% to 90% identical to NAFTA, but that would never be apparent from Trump’s description of his deal-making prowess.”

The book notes a similar narrative with the United States-Korea Free Trade Agreement (KORUS): “The Trump administration negotiated mostly cosmetic changes to KORUS, removing some red tape and lifting a cap on car exports to South Korea that automakers were not even reaching. Most of the deal’s original 24 chapters were untouched, noted The Economist, which headlined its article on the deal: “The trade deal between America and South Korea has barely changed.”

The U.S. Usually Wins at the WTO: In a November 12, 2019, speech, Donald Trump said, “The WTO, we’re winning cases for the first time. We just won a $7.5 billion case. We never won cases.”

“This is false,” write the authors. “The United States has prevailed in nearly 90% of the cases that it brings against other countries in the World Trade Organization. The United States tends to lose when other countries bring cases to the WTO. Other countries have a similar won-lost percentage.”

And Many More: The above represents a sample of Trump’s misleading claims and false statements about trade. If one goes to the Washington Post’s Trump false or misleading claims database and searches “trade,” nearly 2,000 entries come up. That includes more than 200 since the book was published. Many of the entries are variations on those discussed here. The authors note Trump repeats most of his false statements dozens or, in some cases, more than 100 times.

If an America First trade policy “makes America great,” why are so many arguments in favor of it untrue?

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