Trump: Demanding Trade Reciprocity Will Make America Great Again
What’s wrong with this picture?
Jun 28, 2017
Speaking in front of President Donald Trump and son-in-law Jared Kushner at the President’s “American Innovation Council” was Bill McDermott, CEO of a German multinational software corporation headquartered in Waldorf, Germany. The company is acronymically pronounced “SAP,” and its U.S. subsidiary “SAP America.” Mr. McDermott suggested the German company could sell the White House a type of ‘digital cabinet room’ by which President Trump could enjoy constant communications with his Cabinet secretaries or monitor them non-stop.
The Innovation Council included titans of American innovation, for instance, Apple’s CEO Tim Cook, Amazon’s CEO Jeff Bezos, Microsoft’s CEO Satya Nadella, Oracle’s co-CEO Safra Catz, and Eric Schmidt, executive chair of Google’s parent company Alphabet. Mr. McDermott stood out like a sore thumb.
Last month, President Trump complained to European Union leaders that German carmakers had penetrated the American car market without reciprocal opportunities for American carmakers in Germany. According to the German newspaper Bild, Mr. Trump scolded,
“The Germans are bad, very bad. Look at the millions of cars that they sell in the U.S. Terrible. We’re going to stop that.”
In an earlier January interview with Bild, Trump carped,
“if you go down Fifth Avenue everyone has a Mercedes Benz in front of his house,”
while lamenting the absence of Chevrolets on the Autobahn.
So why is President Trump giving a prized White House platform to a German owned company with no reciprocity from Angela Merkel? On May 30, 2017, the President tweeted,
“We have a MASSIVE trade deficit with Germany, plus they pay less FAR LESS than they should on NATO & military. Very bad for U.S. This will change.”
The history of enlightened United States international trade or economic policy is a history of reciprocity. We open up our alluring markets to foreigners to the extent they open up their markets to American business. It’s a classic win-win game for consumers. But to succeed, we must be willing to withhold free trade or investment opportunities or benefits from foreign owned companies unless our American companies receive reciprocal treatment by their foreign nations. We shouldn’t give something for nothing when we can give something for something.
Restricting employment in the federal civil service to United States citizens offers a useful but not perfect analogy. In 1976, President Gerald R. Ford issued Executive Order 11935 to provide as follows:
(a) No person shall be admitted to competitive examination unless such person is a citizen or national of the United States.
(b) No person shall be given any appointment in the competitive service unless such person is a citizen or national of the United States.
(c) The [Civil Service] Commission may, as an exception to this rule and to the extent permitted by law, authorize the appointment of aliens to positions in the competitive service when necessary to promote the efficiency of the service in specific cases or for temporary appointments.
Among other things, the Executive Order created an incentive for aliens to become naturalized, and provided the President a bargaining chip in treaty negotiations.
President Trump should similarly issue an executive order prohibiting federal contracts—or at least White House contracts—to foreign owned companies unless American companies enjoy reciprocal access to contract opportunities in their foreign nations. The President should publish a list of nations that satisfy that reciprocity standard biannually. If such a reciprocity regime conflicts with any of our outstanding trade agreements like NAFTA or the World Trade Organizations, the agreements should be renegotiated accordingly.
Who better to accomplish that task than the author of Trump: The Art of the Deal?