The political debate had reached epic proportions and I decided to take a break. Excusing myself from the table at the dinner, I went outside to take a break and have a smoke. While lighting up, I spied a white SUV with a big, red bumper sticker in the parking lot. The sticker read “I MISS NIXON.”
When I returned to the table, I did not have any desire to engage in heated political debate and, as a matter of fact, I really just wanted to sit, drink coffee and chuckle. After a few minutes of silence and not engaging in political debate, my friends asked me if something was wrong. I replied, “No, nothing is wrong and I am happy as can be.” I then told them about the bumper sticker.
As president, Richard Nixon accomplished two very important things. The first, and in my opinion the most important, was extracting the United States from the Vietnam War, and the second was opening up communication channels with China. America has benefited greatly from the excellent trade from which both sides have profited. Trump could follow in Nixon’s footsteps and get us out of the war in Afghanistan and communicate with China’s President Xi and solve our mutual trade problems.
Trump has two excellent points on his side. The first is China’s stealing of our intellectual property Second is his limiting the ability of our industries to penetrate the China marketplace. I wish Trump well in trying to right these wrongs, but I also hope that he understands the consequences that could be wreaked on America’s citizens.
Pres. Trump, with all due respect, I have been in a lot more negotiations than you have and I have also closed a lot more deals. A street salesperson — like I was — spends upwards of six hours a day in negotiations with clients in order to close deals and in order to put food on the table. I had to close at least five deals a month to feed my family.
I constantly use the phase “the old is forever new” — not only in my columns but also in conversations with my family and friends. With this in mind, I researched trade wars of the past.
In the 1980s, Japan was clobbering its American competitors, who then demanded that American politicians take action to ease their pain. Enter a string of devastating tariffs that were imposed on Japanese industries. The result of that trade war was disastrous to the American populace. In 1980, the U.S. trade deficit was $36 billion, or 1.3 percent of gross domestic product. But by the end of 1989, the trade deficit was $170 billion, or 3.7 percent of GDP. Plus, the tragedy of the trade war was that Americans were paying higher prices for the TVs and the automobiles that they bought.
On Tuesday, Oct. 29, 1928, the U.S. stock market crashed and the Great Depression began. Family fortunes were lost, people committed suicide, many Americans lost their jobs and the phrase “Brother, can you spare a dime,” was coined. The calamity was not caused by a trade war, but instead was caused by over-expansion of industry and the resulting increase of debt. But Pres. Herbert Hoover began a trade war with the whole wide world in hopes of mitigating the economic calamity. It failed.
Hoover’s trade war had disastrous consequences for the whole world. Hostilities began between countries, with everyone enacting tariffs. Europe put tariffs on American goods, which made it harder for us to climb out of the depression. This faux pas continued until World War II.
Wise people started the World Trade Organization in 1995, which by all rights would be an alternative to tariffs by legally regulating trade disputes. Guess what? Donald Trump is in an all-out war with the WTO and if he has his way, the WTO would end up as a small blip in the world’s economic history. This is wrong and the rule of law should prevail.
Robert Pembroke is the former chairman and CEO of Pembroke’s Inc. in Salt Lake City.