Gary Anderson Blog | Tourism And The Trump Letter To Renegotiate NAFTA | Talkmarkets
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Tourism And The Trump Letter To Renegotiate NAFTA

Date: Thursday, May 18, 2017 5:07 PM EDT

Donald Trump plans to renegotiate NAFTA. He has sent the letter activating the process to Congress. After 90 days from 5/18/2017, the process of renegotiating can begin.

But what does Trump hope to accomplish? He hopes to accomplish higher wages for Americans. However, forcing higher wages to make up for higher prices and tariff restrictions seems to be a big negative for economic growth. The idea that American companies can make everything and Americans must pay higher prices will mean more losers than winners in the US economy.

Manufacturing makes up about 12-13 percent of US GDP. Yet the rest of America will have to pay higher prices for goods we are able to procure more cheaply due to the world economy.

As the chart shows towards the end of this article, Mexico and Canada are important neighbors, tourist neighbors, like no other nations. NAFTA renegotiation could jeopardize these relationships. 

I have said it before, that globalization has its faults. Yet economic isolationism is not the solution!

Donald Trump appears to be painting the US economy into a corner. It will remain to be seen how a tariff laden economy will prosper. It would only prosper if there was an uptick in exports, a huge uptick and an uptick in tourism to the USA. But alienating allies will not bring that uptick in exports to nations not happy with the US. And it is not as if the prices for US goods will become more affordable as this ill fated plan is put into place.

I believe that exports could decline, unless US quality was so vastly superior that it would compel buying by foreign customers. Donald Trump does not respect foreigners. In the spat with Israel, it has been said, but not verified, that Donald Trump gave the exact location of the spying operation that helped uncover the laptop bombing scheme that could have played out on US aircraft.

That seems to me to have gone over the top. I am no fan of a lot of Israeli behavior for various reasons, including treatment of the Palestinians, but giving secrets as to the exact location of spying activity seems to be the wrong thing to do. Israel happened to do us a big favor in warning of this laptop attack, although one could argue our support of Israel gets us into a lot of conflict with other peoples and nations. Anyway, bottom line is,  if Donald Trump exposed the agents responsible for gathering this information, that seems to be plain stupid.

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