Experts predicted Trump trade recession in 2016 if he won, instead the opposite

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Experts predicted Trump trade recession in 2016 if he won, instead the opposite happened. The economy is booming and in 2020, seeing is believing.

By Robert Romano

Remember Smoot-Hawley.

That was the rallying cry of #NeverTrump all throughout 2016, that if elected, President Donald Trump would levy tariffs and the world would fall into recession, or maybe even another Great Depression. Because the Smoot-Hawley tariffs were the cause of the Great Depression, or so the thinking goes.

I’d say it was the strong dollar that made a bad recession worse in the 1930s, but that’s another argument. The question is what impact Trump’s tariffs had on the real economy versus the expectations of the punditry in 2016.

A Moody’s Analytics prediction by Mark Zandi in 2016, prepared for the Washington Post, predicted that as many as 4 million jobs would be lost and the U.S. economy would either flatline or go into recession if President Trump levied tariffs against China and Mexico.

Zandi called tariffs a disaster, saying, “This is a pretty ugly scenario, one that I think any rational person would want to avoid.”

It turns out that, quite rationally, Americans voted in their economic self-interests in favor of the Trump trade agenda in 2016, and Trump won the election.

Now, hindsight is always 20-20.

Moody’s mapped out a trade war with both Mexico and Canada, but Trump never levied additional tariffs against Mexico, although he briefly threatened to do so. However, he did levy them against China on $350 billion of goods.

But the outcomes were not as expected.

Instead of losing 4 million jobs, in the establishment survey published by the Bureau of Labor Statistics, the U.S. economy produced 6.6 million jobs since Jan. 2017 when President Trump was sworn in.

Moody’s said we would only have 139 million jobs in 2019. Instead we had 152 million. They were only off by 13 million.

Unemployment is at a 50-year low of 3.5 percent.

As for the Gross Domestic Product (GDP), it has stayed very much in the positive, with mid-2 percent growth levels similar to Moody’s baseline it used in 2016, with no recession in sight.

So, by every measure, the economy is great. And in 2020, seeing is believing.

And rather than provoking too much trade retaliation, Trump’s tariffs and tariff threats respectively have resulted in new trade agreements with China as well as with Canada and Mexico.

The pressure worked.

It turns out getting tough on trade ended up promoting freer trade, and the immediate negative impacts of tariffs projected by the experts were just wrong. China did retaliate, but it had no measurable impacts on U.S. jobs markets or growth prospects, and so Beijing was brought to the table.

And with the modest tariffs now in place, the U.S. trade in goods deficit with China fell 12.8 percent in the first nine months of 2019, or $38.5 billion, compared to 2018, according to the latest data from the U.S. Census Bureau.

Meaning, Trump was right all along. It is China and other trade partners that have more to lose by failing to make a deal with the U.S.

Developing economies want to export, meaning we have something they want in the way of markets. Being a net importer, the U.S. has always had more leverage in trade relations. We were just not using it to our advantage in the trade negotiations. Until Trump came along.

Now agreements are being reoriented to serve U.S. interests with a measurable net benefit to the U.S. economy. And the American people, as they get prepared to vote in 2020, can see it in their finances. They were warned that the economy would be a catastrophe if the Trump trade agenda were implemented. It would be the worst recession since the Great Depression. Millions of jobs would be lost.

Instead, Trump won, his trade agenda was implemented and the opposite has happened as the economy keeps booming. Who will voters believe in 2020, the critics or their own lying eyes?

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.

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Fact Check: Trump’s Claims on the Economy
By: Jim Tanersley - New York Times
RE: https://www.nytimes.com/2019/11/12/u...p-economy.html

In an appearance at the Economic Club of New York, the president overstated some of the economy’s gains on his watch, understated others and often cited inaccurate statistics.

The United States economy is slowing and wage growth has slipped, but household incomes are rising and the unemployment rate is at a half-century low. This is the complicated — and somewhat contradictory — state of the American economy that President Trump painted over with a big smiley face at the Economic Club of New York on Tuesday.

In remarks and a question-and-answer session, Mr. Trump continued to portray himself as a savior of what had been a moribund economy, trumpeting job gains and increased worker pay on his watch. To support his claims, he unleashed a flurry of economic statistics. Some were accurate, some were misleading and some appear nowhere close to the truth.

Here are some of the president’s claims.

HERE'S WHAT THE PRESIDENT SAID

#1 “We are winning” World Trade Organization “cases for the first time.” - FALSE.

The United States is a member of the World Trade Organization, which adjudicates disputes between nations in global trade. Mr. Trump claimed that before he took office, the organization never ruled in favor of America in those disputes: “They would rule against us because they said: ‘Hey, don’t worry about the United States. They are the stupid people. Don’t worry. Rule against them.’”

The World Trade Organization’s history of decisions shows this to be untrue. The United States usually prevails in cases that it brings before the global body.
As Chad Bown of the Peterson Institute for International Economics explained:

By: Chad P. Bown

Trump claims US *never* won WTO disputes before him.

Pre-Trump Facts

• US wins most all WTO disputes where it is complainant (foreigners imposing barriers to US exports)

• US loses a fair amount of WTO disputes where it is defendant (US imposing barriers on foreign exports) 11:53 AM - Nov 12, 2019

2. “Unemployment has recently achieved the lowest rate in 51 years.” TRUE

The unemployment rate has fallen to half-century lows in recent years. It was 3.6 percent in October — matching the lowest rate since 1969. So that’s actually 50 years. The president was off by a year, but broadly correct about the historic nature of the low rate.

3. 600,000 new manufacturing jobs. FALSE

You would need — according to a past administration representative at the highest level of that past administration — you would need a magic wand to bring back manufacturing jobs. Well, we brought them back and we brought them back to over 600,000 manufacturing jobs as of today.

False. - Here, Mr. Trump is off by a lot. The Labor Department shows that, through October, the United States has added 443,000 manufacturing jobs since Mr. Trump took office. His number is off by more than 25 percent.

4. “Over 10,000 brand-new, beautiful factories.” - Needs context.

After losing 60,000 — can you believe that — factories under the previous two administrations, America is now gaining over 10,000 brand-new, beautiful factories and many, many more than that want to come back in because under my administration, we are producing jobs and incentives for these companies to come back.

Context:

Mr. Trump slightly overstated the number of manufacturing establishments lost under Presidents George W. Bush and Barack Obama: It was about 55,000, according to the Labor Department, and would have been worse if the sector had not begun to rebound in 2013.

Mr. Trump is correct that since he took office, the United States has added more than 10,000 new manufacturing establishments, as measured by the Quarterly Census of Employment and Wages. They are mostly small businesses. Nearly all of those establishments — more than 9,000 — employ zero to five workers, the actual statistics show.

5. 14 million jobs created by … Ivanka? FALSE

She has now created 14 million jobs and they are being trained by these great companies. The greatest companies in the world because the government can’t train them. It’s a great thing.

False. - In his zeal to praise his daughter, Ivanka Trump, who is co-chairwoman of a White House initiative to improve work force training, Mr. Trump claimed that she had “created” 14 million jobs. She has not.

What Ms. Trump has done is help lead an effort that has resulted in private companies pledging to give “over 12 million new education and training opportunities for American students and workers over the next five years,” the White House says. That’s not the same thing as creating jobs.

About this writer: Jim Tankersley covers economic and tax policy. Over more than a decade covering politics and economics in Washington, he has written extensively about the stagnation of the American middle class and the decline of economic opportunity. @jimtankersley

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Each Writer(s): Statistics depend on one perception of the actual facts. Not hypothetical's.

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