Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

Sierra Raynes: Half of Republicans see foreign trade as threat to United States
Howard Richman, 2/29/2016

Sierra Raynes had a great blog posting on the American Thinker website about a poll result showing Republican voters souring on trade and also showing the correlation between trade volume and U.S. GDP growth. Here's what she said about the poll:

Newly released polling data from Gallup shows that half of all Republicans see foreign trade as mainly a threat to the United States.

This level of skepticism toward international trade has remained high among the GOP base since Gallup started collecting polling data on the topic.  By comparison, Democrats and independents both have much lower levels of concern about foreign trade, with each group at 37% of its membership viewing foreign trade as mainly a national threat.

And here is an excellent graph that she put together showing the correlation between trade volume (exports plus imports as a percentage of GDP) and U.S. per capita growth. It shows that the higher the trade volume, the lower the U.S. GDP growth:

She is definitely correct. But trade volume is not the culprit; trade deficits are the problem. When trade is balanced, trade volumes correlate positively with economic growth. The problem is that the U.S. trade deficit has been growing. But Raynes is also aware of this. She includes another graph which shows that U.S. trade deficits have been growing. And she writes:

The lack of fairness Trump is speaking of is exemplified by the unbalanced nature of American trade with the world since it began running continuous annual balance of trade deficits in the 1970s.  These never-ending and perpetually increasing deficits have played a fundamental role in the ever slowing rate of economic growth over this time frame.

The trade in goods deficit reached $759 billion in 2015, and the modest trade in services surplus of $227 billion was nowhere near enough to offset the imbalance, resulting in an overall total goods and services trade deficit at $532 billion for the year. During the higher growth period of the 1960s, the U.S. ran a small total trade surplus.

The entire piece is worth reading. Go to:

http://www.americanthinker.com/blog/2016/02/half_of_republicans_see_foreign_trade_as_threat_to_united_states.html