The Trump transition team is trying to deal with concerns that business and corporate leaders have regarding the possibility of trade wars sparked by the incoming administration.
A senior adviser on the Trump transition team, Anthony Scaramucci, told a group of business leaders gathered at a meeting of the bipartisan group ‘No Labels’ that President-elect Trump is a free trader who is looking to make the U.S.’s trade deals more fair, not to scrap them.
“I don’t think we’re looking to rip up NAFTA as much as we are looking to right size it and make it fairer,” Scaramucci said on Monday. “He’s got a great relationship, by the way, with the Mexican president. They talk regularly,” referring to Mexican President Enrique Pena Nieto.
Scaramucci claims that part of his role with the Trump economic team has been to study the impact of the North American Free Trade Agreement — originally signed into law by President Bill Clinton in 1994 — which Trump has repeatedly called “the worst trade deal ever” by any country.
“I don’t think anybody in the administration from the top to the bottom is looking for protectionism. We understand the economic harm and the impact that would take,” he said. “I don’t think anybody in the administration is looking for quote unquote tariffs, but I think they are a cudgel, if you will, to lay out there if we can’t get the trade deals to be right sided to now benefit the American people.”
During the campaign, Trump repeatedly said that he was either going to “entirely renegotiate” or “terminate” NAFTA. According to Saramucci, the U.S. has lost about 70,000 factories since the trade agreement was enacted. Bernie Sanders railed against the treaty during the primaries saying that it has cost 800,000 American jobs. However, the Congressional Research Service and other experts do not agree claiming that it is difficult to quantify the impact of the treaty on jobs.
Signaling the likely approach of the incoming administration to trade deals, Saramucci said that in the past, the United States has sought trade deals that made it easier for foreign partners to export goods to the U.S. rather than making it easier for U.S. manufacturers to penetrate foreign markets. He also said that post-WWII deals were designed to promote global peace and stability, at times, at the expense of American workers.
“This economic interdependence has actually reduced conflict around the world. However, one of the deleterious side effects of this is that it’s hollowed out the manufacturing base of the United States,” he said.
That is certainly a position with which many economic and trade experts disagree.