Economists: ‘America First’ approach could hurt Iowa
President-elect Donald Trump’s “America first” economic nationalism scored well with voters but may not play well with international trading partners, much to the detriment of Iowa, according to economists who monitor the state’s economy.
The zero sum trade game - that is, the idea that when American wins, there has to be a loser - that Trump seems to be advocating could hurt Iowa’s exports to China as well as to its North American and European trading partners, economists David Swenson of Iowa State University and the University of Iowa and Ernie Goss of Creighton University said Friday during taping of an upcoming “Iowa Press” program. Goss compared Trump’s approach to trade to Brexit - Britain’s decision to leave the European Union - and similar populism in Europe, saying such “uber nationalism” is not good for the economy.
The impact could be “huge, huge,” Goss said, because “the US depends heavily on agriculture, agricultural exports, and agriculture depends heavily on trade.” Iowa is among the five states most dependent on agricultural trade, he said. Iowa exports much of its agricultural commodities and manufactured goods to China, so if Trump carries through on his threats to impose tariffs on Chinese goods, Swenson said, it will “either increase the cost of buying stuff from Iowa or decrease our access to goods and services from other places.”
China has played fast and loose on trade in some cases, Goss said, but the Chinese are no longer manipulating their currency to gain an advantage in trade.
And while many Iowans have praised Trump’s selection of Gov Terry Branstad as his ambassador to China because of his many trade missions and personal relationship with Chinese President Xi Jinping, the economists warned that Branstad can’t approach the post as Iowa’s trade representative.
“The governor is going to have to learn to be an ambassador and all that entails broadly with regard to traditional State Department activities,” he said. “An ambassador isn’t a trade representative and so the role is significantly different from being the chief trade representative of the state of Iowa or the Midwest.
“There’s no ribbons to cut in China, which is what Terry Branstad loves to do. He’s a promoter, and he’s a hand-shaker, and he likes to work out arrangements with people,” Swenson added. Iowa Public Broadcasting’s edition of “Iowa Press” with the economists will air at 7:30 pm Dec 30 and noon Jan 1 on IPTV, 8.30 am Dec 31 on IPTV World and online at IPTV.org. —AP
PITTSBURG: In this July 16, 2015, photo, a customer refuels her car at a Costco in Pittsburgh. US consumer prices rose in November 2016 by the smallest amount in three months as the climb in energy prices moderated a bit and food prices remained flat. — AP