Issue Position: Foreign Trade

Issue Position

I am a supporter of expanding American Trade. I support the lowering of tariffs on imports from countries when our trading partners reciprocate by lowering their tariffs.

Expanding trade will accelerate the rate of American economic growth in the following ways:

A) Allowing businesses in foreign countries to import those products that they can produce more efficiently will increase the amount of goods that are made available to the American consumer. In addition, these products will be lower in price. This increase in imported goods at lower prices would have a deflationary impact on the American Economy. But, the Federal Reserve Board is not interested in price deflation. The Federal Reserve Board is interested in price stabilization. Therefore, once imports are increased, the Federal Reserve Board will respond by increasing the American Money Supply. This increase in the American Money Supply will allow Americans to purchase the increase in imported goods as well as more goods and services produced by American companies. This will benefit American companies and American workers.

B) By expanding trade we help to build up the economies of other countries. As the economies of these other countries grow, their citizens will be able to purchase more American products in the future. This will benefit American companies and American workers.

C) By reducing the tariffs that the U.S. charges on imports from companies in foreign countries, those countries will reciprocate and reduce their tariffs on products sold by U.S. Manufactures. In the aggregate, this will benefit American companies and American workers. Although it is true that when U.S. tariffs are reduced, some existing American manufacturing jobs will be lost. But, as other countries reciprocate and reduce their tariffs, American exports will increase creating many more new jobs than would be lost. In addition, the new jobs generally will be more highly technical and higher in pay than those existing jobs that will be lost.

D) As American trade increases the American trade deficit tends to increase. However, American trade deficits result in increased investments in businesses located with in the U.S. This occurs because trade deficits reflect a net exporting of dollars from America. However, eventually these dollars return to America in the form of investment surpluses. America investment surpluses benefit the U.S. economy by providing American Entrepreneurs with more funds to invest in more plant and equipment, research and development, employee training, and technology. These are the types of investment that increase our nation's productivity.

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