By Raoul Lowery Contreras
“I have great respect for the country of Mexico…Mexico is killing us…The country of Mexico is taking our jobs, they’re killing us at the border…They’re taking advantage of the fact we have stupid negotiators…We have very stupid people in our country negotiating for us…We have leaders who don’t know what they are doing.” Donald Trump, July 8, to Katie Tur of NBC News
Donald Trump, the most brilliant businessman, deal negotiator and Presidential candidate in American history has spoken…Donald Trump: The Leader America has been looking for since 1776. Or, perhaps, conservative Kevin D. Williamson of the National Revue says it better: “The value of speaking one’s mind depends heavily on the mind in question, and Trump’s is second-rate.”
“We don’t have a good relationship with Mexico…Mexico is making a fortune off of us…A fortune in addition to forcing their people to come here…I’m not angry at Mexico, I’m angry at our leadership for not putting the right people to negotiate.” (Same interview)
How, Mr. Trump is Mexico “killing us…taking our jobs” and “making a fortune off us?”
Through May of this year, American trade with Mexico has amounted to $215, 379 billion worth with the U.S. exporting $96 billion worth to Mexico and buying $118, 552 billion worth from Mexico.
In 2014 the U.S. Exported $240 billion worth of goods and services to Mexico and imported $294 billion from there; in the past ten years, the U.S. has exported $1.7 trillion worth of goods/services to Mexico and imported $1.9 trillion back from it. (All trade numbers from the U.S. Census Bureau)
Those numbers may be the ones that Trump’s gofers have given Trump to use in his interviews and speeches. There is more to the story, however. When he uses those numbers Trump manifests a total lack of knowledge which proves beyond doubt that he is not intellectually equipped to be our national CEO (Chief Executive officer) or Commander–in-Chief, or CFO (Chief Financial Officer).
Before this writer is chastised for being uppity, one salient fact that economic and foreign trade observers know that Trump apparently does not, needs exposure here so we ordinary people can laugh at the “brilliant” Trump and the drivel of gratuitous assertions that flow through his lips.
Remember one thing: In a court of law, if a witness -- who has sworn to tell the truth and only the truth -- is caught lying, then all his/her testimony can be discarded.
Donald Trump claims “Mexico is killing us.” Does he know of a ultra-unique arrangement that has been negotiated by our “stupid” negotiators with Mexico’s “smarter” negotiators that is officially labeled -- “Production Sharing?”
So that the Fordham University/Wharton School of Finance alumnus Trump can understand it (he did not major in English or foreign relations obviously) this is what “production sharing” means:
At United States insistence up to 40 percent of what Mexico exports to the United States may be of American origin. We speak of automobile engine parts, or computer mother boards or electrical circuit boards, or plastic for flat screen televisions and/or laptop computer screens and myriad other American-produced products. These thousands of American products are imported into Mexico without tariffs of any sort and paid for by Mexican firms some of which are American subsidiaries then incorporated into finished products shipped and sold to the United States.
So, from the aforementioned numbers of exports and imports, one can deduct 40 percent of Mexican exports to the U.S. because they are bought and paid for in American exports to Mexico to begin with, resulting in a healthy “positive” balance of trade with Mexico.
Mexico is making money off of us and employs hundreds of thousands of – millions (?) -- Mexicans in making products for sale to the U.S. Yes. On the other hand, the United States is making good money off of Mexico’s purchase and importation of trillions of dollars’ worth of American goods and service.
Someone should tell Mr. Trump about “production sharing” with Mexico that permits somewhere between 6 million and 14 million Americans to work in jobs that are involved in trade with Mexico. The 6 million job figure comes from the Wilson Center’s Mexico Institute. The 14 million jobs estimate comes from the U.S. Chamber of Commerce.
Trump: “Mexico is beating us on trade…Mexico is the new China…(Mexicans are) going to sell cars in the U.S and parts and trucks…How does that help us?”
Blah, blah, blah…Mr. Trump has no idea. America cannot make small economy cars because of high Detroit union auto worker wages. Without Mexico making small Ford, GM or VW cars we would not have many small economy cars.
Millions of Americans work in jobs involving trade with Mexico. Using “production sharing” in our calculations we have a huge trade advantage and profit with trade with Mexico. It seems that American negotiators who made the deals with Mexico are not as “stupid” as Mr. Trump says they are.
Reality: Mexico is not “killing us.”
Contreras formerly was syndicated by Creators Syndicate and wrote for the New American News Service of the New York Times Syndicate
photo from conservativetribune.com