Trump's new trade policy

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But an assessment of the impact of trade on wages is very different than an assessment of trade agreements. It is inconceivable that multilateral trade agreements, such as the North American Free Trade Agreement, have had a meaningful impact on US wages and jobs for the simple reason that the US market was almost completely open 40 years ago before entering into any of the controversial agreements. American tariffs on Mexican goods, for example, averaged about 4 per cent before Nafta came into force.

China had what was then called “most favoured nation” trading status with the US before its accession to the World Trade Organization and received the same access as other countries. Before the Korea Free Trade Agreement, US tariffs on Korea averaged a paltry 2.8 per cent. The irrelevance of trade agreements to import competition becomes obvious when one listens to the main arguments against trade agreements. They rarely, if ever, take the form of saying we are inappropriately taking down US trade barriers.

Revoking trade deals will not help American middle classes

Fitch Ratings, one of the world's major credit rating agencies, is sounding the alarm on the potential negative impact of President Donald Trump's economic policies. In a report on Friday, Fitch said that the uncertainty of Trump's economic policies, as well as his penchant for protectionist trade policies, pose a risk not only to the sovereign bonds but overall economic conditions as well.

Fitch Ratings on threat of Trump economic policy - Business Insider

Known as border adjustability, the approach is intended to help U.S. manufacturers by favoring exports over imports. As laid out in Ryan's "Better Way" agenda, companies would pay no tax on revenues from exports and would be unable to deduct the cost of imports from their taxable income. Advocates said if that approach became law, it would attract investment to the United States, provide incentives to manufacturers to maintain or expand their U.S. facilities, and dissuade companies from leaving the country. But some tax experts are skeptical it will be approved by Congress.

What does Trump's 'big border tax' threat really mean? | Reuters

Before going any further, have a read of Gavyn Davies on the idea of a border tax — suggested by Paul Ryan last year — being imposed by your president-elect Trump. The basic idea of said tax, in Davies’ words, is it would “operate like a tariff on imports into the US, combined with a subsidy on many exports from the US, a combination that would have profound international economic consequences.” In short, it would understandably be seen as protectionism and could lead to retaliation.

Pricing in a Trump border tax | FT Alphaville