Donald Trump's proposal to slap a 45% tariff on Chinese imports is another example of his genius for making politically incorrect catchwords respectable. By the end of the Columbia, SC presidential debate, there was a general agreement in the room that tariffs on Chinese imports were going to be a legitimate issue in the elections this year.
Thanks to Mr. Trump, there is no stigma now to believing that illegal immigration has to end, that giving Muslim refugees sanctuary is a bad idea, and that importing more than we export is a path to self-destruction. It's lunacy to believe that a nation can import its way to wealth. But this is the only legal explanation for why the U.S. has allowed massive negative trade balances to fester and grow over the past 20 years.
Donald Trump is drawing thousands of blue-collar workers to his stump speeches with the central message that America is far down the road to financial collapse. This shift in voter allegiance has profound implications for the political future of the country.
The working poor understand that Mr. Trump is on the right track for the simple reason that each and every one of them faces financial collapse on a daily basis. The danger is real, as they have been losing purchasing power every year since President Clinton blessed Robert Rubin's strong dollar policy and began the era of unrestricted imports in the mid-1990s.
Mr. Trump sees trade in easy to understand terms: Countries that export more than they import grow wealth. Countries that import more than they export fade away. Mercantilism works, tariffs work (they are not passed on to consumers), and reciprocity works.
We have to put people to work in this country and making the goods we import is the starting point. The estimated $485 billion of goods we bought from China in 2015 represent lost jobs and lost investment in this country. In the future, to sell us $485 billion in goods, China should be forced to buy $485 billion worth of goods from us. Reciprocity is the next politically incorrect word Mr. Trump should redeem. Balanced accounts make good neighbors.