SCDigest Editorial Staff
The question of what to do about the huge US trade deficit with China and the impact of offshoring on US jobs is not one that has clear lines of political demarcation. A growing number of conservatives, such as economist and former Reagan Administration Treasury official Paul Craig Roberts, have lately been questioning the US' trade relationship with China and calling for taxes/tariffs of some kind on Chinese imports to even the playing field.
The US House of Representatives several weeks ago passed a bill calling for the US government to consider China's refusal to increase the value of the Yuan versus the US dollar an improper trade subsidy. Though largely symbolic, the bill included language that would expand the power of the US Commerce Department by allowing it to slap retaliatory tariffs on Chinese goods and passed by a margin of 348-79, meaning the Yes vote had strong bipartisan support.
Now, in an interview last week with TV host Greta Van Susteren of Fox News, real estate magnate Donald Trump, one of the US' most well known businessmen and generally thought to lean in a modestly conservative political direction, bashed the current US position vis-a-vis China and called for heavy taxes on Chinese imports.
"Donald, we cannot believe that we're able to get away with this," Trump said Chinese government and business officials have told him privately.
Trump called for a 25% tax on Chinese imports, and said it would be little financial hardship for US families to buy American-made toys and other products, that oil prices are way above what they should be given the true state of supply and demand, and that he was so irate at the current economic situation a run for President is not out of the question.
A slightly abridged transcript of the interview is republished below.
TRUMP: We've got to create more jobs. Oh, yes, they are all moving to Mexico, China. They [politicians] don't say we've got to stop that. How can you create more jobs when you have phony currencies in other countries that are making it impossible for us to compete? Why aren't we making toys in Alabama and in North Carolina? We buy toys for our children; this isn't a necessity. You tell your kid you are going to get one less toy.
The fact is we should be making these things, which, by the way, are also in many cases unsafe with the lead poisoning and the paint poisoning because the standards are different -- why aren't we making toys in this country for our children?
VAN SUSTEREN: Is there a larger profit margin? If you are a manufacturer and make them in China and you don't make them here don't you have a larger profit margin?
TRUMP: Perhaps. And perhaps we have to say, guess what folks, you can buy toys from China, you are going to pay a 25 percent tax. And all of a sudden you are going to have things being made in this country. Nobody ever mentions it.
I went to the Wharton School of Finance. This is such a basic thing. I had people that I know in China, because I do a lot of business with the Chinese -- not that I want to, but I have to do it, because of the fact that, again, their pricing is so low because of, in my opinion, the manipulation of currency. They cannot believe what they are getting an way with. They tell me at dinner, "Donald, we cannot believe that we're able to get away with this." They tell me that privately. They never said keep it confidential because they figure I'm not going to be on your show talking about it. But they tell me they can't believe how stupid our representatives are, let me put it nicely. They can't believe that our representatives let them get away with what they are doing. And, I will tell you, we are rebuilding China.
VAN SUSTEREN: What is the incentives for our representatives to let them get away it?
TRUMP: I don't get it. I really don't get it, unless they are just not smart. Whenever I go -- when I do a show like yours and bring up this, I get hundreds of letters saying "Thank you, Mr. Trump." And I don't see the politicians pick it up. It's hard to believe.
I will tell you, the Chinese have great lobbyists in Washington. And lobbyists make great contributions to politicians. Maybe they just keep their mouth shut, I don't know.
But I can tell you it is OPEC. They have the best lobbyists you can imagine. How is OPEC allowed to get away with fixing the price of oil? If you and I do that you go to jail. If we fix the prices, it is called jail time.
Here you have 11 guys sitting around the table -- in this case it is guys, by the way -- and they set the price of oil. And whenever they have a new country, hits oil, they find oil, immediately they are invited, join us. They set the price.
Oil should not be at $85 a barrel right now. There's so much oil all over the place. Every ship load they don't know what to do with it. They fix the price of oil. Why does this country allow them to get away with it? And we protect half of these countries that are fixing the price. Without us, those countries will be overthrown in two seconds. So we protect.
I mean, Kuwait -- when Iraq took over Kuwait, Greta, one of the great stories. Iraq takes over Kuwait, the sheiks they go to London and New York and take buildings and they stay. We then lose lives and spend billions on taking back Kuwait, and we hand it back to them, and now they're overcharging us for oil. You explain it to me.
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