Trump Acts On Promise To Withdraw From Trans-Pacific Partnership
RACHEL MARTIN, HOST:
President Donald Trump is making good on one of his big campaign promises to re-evaluate America's free trade commitments.
STEVE INSKEEP, HOST:
To that end yesterday, he signed an executive order which pulls the United States out of a negotiated but never ratified agreement, the Trans-Pacific Partnership. Later in the day, he spoke about the deal after a meeting with union leaders.
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PRESIDENT DONALD TRUMP: I just signed a document, a very powerful document. And we're going to have trade but we're going to have one-on-one. And if somebody misbehaves, we're going to send them a letter of termination - 30 days - and they'll either straighten it out or we're gone.
MARTIN: President Trump also met with the heads of several manufacturing companies yesterday. Afterwards, he defended his economic policies - policies that some critics have called protectionist and anti-trade.
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TRUMP: What we want is fair trade. And we're going to treat countries fairly, but they have to treat us fairly.
INSKEEP: As part of what the president calls fair trade, he plans to announce some action on NAFTA, the free-trade agreement between the United States, Mexico and Canada, maybe calling to renegotiate the whole thing.
MARTIN: To hear more about all those plans, we got in touch with Stephen Moore. He was an economic adviser to Donald Trump during the presidential campaign. Mr. Moore, thanks for being with us.
STEPHEN MOORE: Great to be with you.
MARTIN: Now that we've seen President Trump sign this executive order backing away from negotiations related to the TPP, what is your take? Is this a good choice?
MOORE: Well, let's talk first about the real politics here, which is that Donald Trump campaigned for president and he made a big deal out of renegotiating NAFTA and the trade act with Asia. And he is delivering a promise here. And I do think presidents, when they come into office, should follow through with the promises they make to the voters. And he's doing that.
Now, my own personal view on the Asia trade deal is that it is way too complicated. There are way too many special interest provisions in it. And I think it can be renegotiated in ways that will keep the heart of the idea of trade agreements with some of these Asian countries but without the thousands of pages of regulations and special interest provisions.
I think it's important, by the way, because if we have free trade agreements with other Asian countries, that actually increases our power in Asia and reduces the power that China has.
MARTIN: So what happens in the interim? I mean, now that TPP is not going to move forward because there's no American leadership in it, does that create a vacuum that China can swoop in and fill?
MOORE: Hopefully not. That would be a disaster if China swooped in and took our trade routes away from us by negotiating their own deals.
MARTIN: Do you think that's a risk, though?
MOORE: It is a risk - certainly, it is. But I think, look, Donald Trump is most concerned when it comes to trade with China. There's no question about it. And there's an area even as a free trader, as I am, I share many of his concerns about China cheating, stealing technologies and not playing by the rules. And I think a tougher stance with China makes sense.
I think it's in the interest of American companies and American workers. And I think that's coming.
MARTIN: So let's talk more about what could be coming. Administration officials have suggested that President Trump will take some kind of action related to NAFTA, the North American Free Trade Agreement. I guess I'm asking you to reveal what you know. I don't know if you can. What do you expect him to do?
MOORE: Well, here is another promise that Donald Trump made, and it was central to his campaign, that he was going to renegotiate NAFTA. And so it will happen. It makes me a little bit uneasy because I think as an economist, NAFTA has been on balance a good thing for all three countries, Canada, the U.S. and Mexico. It's benefited Mexico the most, in my opinion.
And given how shaky Mexico's economy is right now with the falling of the peso and the increase in unemployment, I think it's important that we continue to trade very openly with Mexico to keep their economy strong and stable, not just for economic reasons but also for foreign policy and national security reasons. By the way, it's important to remember, this was begun by Ronald Reagan, and it was signed into law by Bill Clinton.
This is a true bipartisan effort that I think on balance has worked well.
MARTIN: So does this decision to renegotiate at least parts of NAFTA - does this run counter to the guidance that you gave then-candidate Trump?
MOORE: No, you know, when I started working for Donald Trump, he and I talked about trade and I said, Donald, you know, I don't agree with you on a lot of your trade decisions. And he said, look, we can agree to disagree on that. I want your help on other issues. If Trump simply tweaks these deals in ways that are in America's interest, I think it's a positive thing.
The worry that many people have, like me who are free trade advocates, is the worry that is Donald Trump going to spark a trade war? And that would be negative not just for the United States but for the whole world economy.
MARTIN: I want to ask you about a meeting that Donald Trump had with CEOs yesterday. In it, he said - he was trying to reassure them saying he wants to axe all kinds of regulations to make it easier for businesses to start new initiatives, to set up new factories. At the same time, he said if corporations still choose to export their labor overseas, he will slap a big so-called border tax on the products they make there.
What do you think of that?
MOORE: I think it's called the carrot and the stick (laughter). So the carrot is that he's offering companies lower taxes, less regulation, a more robust American energy policy, all things that would be very pro-business and make America a very attractive place to invest in. I happen to think that's the heart of the economic plan. And I think if he does those things, it'll have a very positive impact on bringing companies back home.
So I'm in favor of the carrot of lower taxes and less regulation. The stick is something where he's basically got a club and he's saying to these companies, look, if you leave, we're going to hit you over the head with these tariffs when you bring your goods and services back into the United States. And I don't think it's necessary.
I think if he does the tax reductions and the regulatory relief, I do think you're going to see thousands of companies moving back to the United States. I hope that we will see more carrot and less stick.
MARTIN: Although all it takes is a big conglomerate, a big multinational company to call the president's bluff, in some ways, and say, fine, we've done the math. We can take the tariff. It's just in our best interest to produce these products overseas.
MOORE: That's certainly a possibility, no question about it. When you buy a computer, you're buying a computer with parts that are made in Mexico, China, India, United States and so on. That's just the nature of our 21st century economy. And I hope Donald Trump fully understands that. But, look, if you cut me, I bleed red, white, and blue, all other things equal.
I want things produced here in America, in Michigan, in Ohio, in Pennsylvania, Wisconsin and my home state of Illinois. I hate it, as Donald Trump does, when I see a company, you know, pack up their bags and leave a town. And you can see how it really negatively affected the lives and the families of people who live there.
MARTIN: Stephen Moore was an economic adviser to Donald Trump during the campaign. He is a senior fellow in economics at The Heritage Foundation. Stephen, thanks so much.
MOORE: Thank you. It was a pleasure. Transcript provided by NPR, Copyright NPR.