September 22, 2016

MAKING WAR ON THE ECONOMY:

Study: Donald Trump's trade policies could cost 4 million jobs (Zack Beauchamp, Sep 21, 2016, Vox)

The Peterson estimate looked at Trump's fairly consistent positions on trade, like withdrawing from NAFTA and slapping a 35 percent tariff on Mexican goods and a 45 percent tariff on Chinese ones. Trump would be able to do these things without Congress: US law gives the president wide discretion over tariff rates, empowering the executive to declare an economic "emergency" and raise duties basically at will.

The Peterson analysts assumed that China and Mexico would retaliate by raising tariffs on American goods and imposing other trade barriers. The team then used a model developed by Moody's Analytics, an economic research firm, to estimate the effects.

In the worst case, which they call the "full trade war" scenario, the US collapses into recession by 2019, with growth at -0.1 percent. The unemployment rate would shoot up to 8.7 percent, with the economy shedding upward of 4 million jobs.

"Together China and Mexico account for a quarter of US international trade in goods and services," Peterson's Marcus Noland, Sherman Robinson, and Tyler Moran write. "The trade war [Trump's] policies is likely to spark would send the US economy into a recession and cost millions of Americans their jobs."

Posted by at September 22, 2016 4:41 PM

  

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