During the 2016 election cycle, trade was much-maligned by both party nominees. Lost in the election-year rhetoric was the positive impact that trade has on our economy and in the lives of every American.
International free trade is the backbone of our nation's retail industry. It stimulates economic growth, encourages innovation, and brings value to consumers for the items they buy each and every day.
What's the impact on TPP?
President-elect Trump has indicated that he plans to halt all ongoing trade negotiations until his incoming Administration reviews current and proposed trade policies. This includes pulling out of NAFTA and TPP, but in recent conversations with our NAFTA trading partners, both Canada and Mexico have indicated a willingness to talk and possibly renegotiate the deal.
New tariffs on imports?
During the campaign, Trump also told voters he would implement a 35 percent tariff on goods imported from Mexico and a 45 percent tariff on goods imported from China while focusing on reducing the trade deficit. If implemented, these measures could have a negative impact on retailers and consumers alike. We can expect higher costs for consumer goods, particularly for gasoline, raw materials, apparel, and electronics which would result in a decrease in spending by American consumers.
Getting tough on trade enforcement?
Another major theme has been the lack of enforcement of U.S. trade agreements. While most of the attention has been on China, with whom we do not have a trade agreement, getting tough on China could have ramifications across global supply chains. Whether President-elect Trump uses his executive powers to protect domestic steel, aluminum and automakers or labels China a currency manipulator is still to be seen.
RILA has long championed retail's role in international trade. International trade supports millions of American jobs throughout the global value chain, which keeps Americans working here at home while growing our economy. As a new Administration and Congress come on board, we welcome the opportunity to work with lawmakers to build a bold trade agenda that creates new opportunities for open markets and shows why free trade helps save Americans money while keeping us competitive.