How does Trump make the call? Economist Daniel Griswold explains.
A bad trade deal allows U.S. manufacturing companies to lower their production costs by importing capital machinery, raw materials and intermediate inputs such as steel at global prices. A good trade deal protects the domestic U.S. steel industry and its 150,000 workers by raising the costs of production for steel-using manufacturing companies that employ 6.5 million U.S. workers.
A bad trade deal lowers or eliminates tariffs on the imported food, clothing and shoes that make up a disproportionately larger share of the family budgets of working class Americans and the 45 million Americans living below the poverty line, thus allowing their real wages and standard of living to rise.
A good deal protects the few hundred thousand remaining manufacturing jobs in the U.S. textile, apparel and footwear industries by maintaining a regressive tax of duties on food, clothing and footwear that imposes an effective tariff on the poorest 10% of Americans that is 5 times higher than the effective tariff on goods purchased by the richest 10%.