Topic: Trade
“Illegal immigration should be ended, not mitigated; the border sealed, not reprioritized. Economic engagement with China should be ended, not rethought.”
The effect of “mass deportations” would be economic devastation. By one calculation, deporting 1 million immigrants would lead to 88,000 additional employment losses by other Americans, suggesting that Trump’s program could cost up to 968,000 Americans their jobs on top of the 7.1 million jobs held by immigrants up for deportation.” [Source]
Full contextual analysis of the foreword here.
“The People’s Republic of China’s predatory trade practices have disrupted the open-market trading system that has provided mutual benefit to all participating countries—including China—for decades.”
Vought is criticizing the WTO (World Trade Organization) for failing to discipline China for their unfair trading practices. However, this study by the Cato Institute found that “If the Trump administration really does want the Chinese economy to be more market-oriented, it should make better use of WTO rules by filing more complaints against China. While it is often accused of flouting the rules, China does a reasonably good job of complying with WTO complaints brought against it.”
Full contextual analysis of Section 1.2: Executive Office of the President of the United States here.
Share this quote from Project 2025:
“The United States should strictly enforce the doctrine of reciprocity when issuing visas to all foreign nationals.”
The doctrine of reciprocity means that the visa policies applied to foreign nationals entering the U.S. would mirror the policies those foreign nations apply to U.S. citizens. If a country imposes strict visa requirements on Americans, the U.S. would respond by imposing similar restrictions on citizens of that country. This promotes diplomatic leverage, and in a perfect world, could result in better treatment of Americans traveling abroad while they’re in those countries, assuming we’ve agreed to treat visitors from that particular country well while they’re guests of the United States.
In reality, however, some countries would automatically be excluded due to their policies, making enforced reciprocity a means of legally discriminating against foreign visitors from those countries. Israel’s border policy15 is one such example.
The GOP backed off from its allegiance to reciprocity after WW2, once it was widely recognized that their high tariff policies had worsened the Great Depression17 and sparked trade wars18. Now they’re revisiting these misguided and harmful policies even though history has foretold the results.
Full contextual analysis of Section 2.3: Department of State here.
“…and restart the Trump Administration’s “China Initiative” (to address Chinese espionage and theft of trade secrets), which the Biden Administration “terminated…largely out of a concern for poor ‘optics.’”
The China initiative wasn’t terminated by Biden, it was refocused because Trump’s version of it resulted in disproportionately targeting Americans of Chinese descent for their race, and for leading to a number of cases dropped due to lack of evidence. In 2022, the DOJ refocused it on threats from nations, not individuals. So I guess this is a partially true statement, if you’re calling blatant racism merely “poor optics.”
Full contextual analysis of Section 3: The General Welfare here.
“Repeal the federal sugar program. The federal government should not be in the central planning business, and the sugar program is a prime example of harmful central planning. Its very purpose is to limit the sugar supply in order to increase prices. The program has a regressive effect, since lower-income households spend more of their money to meet food needs compared to higher income households.”
He’s oversimplifying again. The Federal Sugar Program is a complex system that aims to maintain domestic sugar prices above global market levels. Potential impacts of repealing it include loss of price supports – meaning that sugar producers (both sugar beet and sugarcane farmers) would be exposed to lower global market prices, which are often more volatile and lower than U.S. prices. This could result in significant financial difficulties, with smaller or less efficient farms at risk of going out of business, which could lead to reduced domestic sugar production.
Without the import quotas and tariffs, cheaper sugar from countries like Brazil, Mexico, and Thailand could flood the U.S. market, putting further pressure on domestic producers. I suspect this is another example of “Republicans not properly understanding tariffs.” Increased reliance on imported sugar could negatively affect domestic employment in the sugar industry, particularly in states like Florida, Louisiana, and Minnesota, where sugar production is significant.
U.S. food manufacturers would benefit, since they would no longer have to buy domestic sugar and could get it cheaper at the global market price. If the price of sugar decreased, food manufacturers may drop prices, which would benefit U.S. consumers if that were indeed the result. Removal of the pricing supports leaves us open to global market volatilty, potentially resulting in unpredictable sugar prices, which translates to unpredictable manufacturing prices and therefore unpredictable and fluctating consumer costs.
On the other hand, if domestic sugar production declines due to the removal of price supports, it could lead to environmental benefits, especially where sugarcane production is water- and chemical-intensive, such as the Florida Everglades (where sugarcane farming has been linked to water pollution.) (Although I’m sure that environmental harm reduction isn’t something that Bakst wants or cares about.)
Full contextual analysis of Section 3.1: Department of Agriculture here.
“The next Administration must prioritize the economic prosperity of ordinary Americans. For several decades, establishment “elites” have failed the citizenry by refusing to secure the border, outsourcing manufacturing to China and elsewhere, spending recklessly, regulating constantly, and generally controlling the country from the top down rather than letting it flourish from the bottom up.”
We’re off to a bad start, here, considering that many of the policies the Heritage Foundation has touted throughout Project 2025 would result in economic devastation. I address that every time it comes up under a specific mandate. Second, are they arguing that their particular brand of fascism wouldn’t be “controlling from the top down”? They’re literally arguing for staffing the entire federal government with regime loyalists. It’s throughout this document.
Third, they praise Reagan throughout this document, who gave us trickle-down economics, which not only didn’t work but is the opposite of “letting it flourish from the bottom up.”
Pay attention to their actions, not their words. Their guy (Trump) is the one who killed the bipartisan border control bill, so he could continue to campaign on it as an issue. Obviously, the border can’t be that big of a problem if it can wait to be addressed.
As for economically disengaging from China, as is argued for in the Foreword of Project 2025, the results of that, at this point, are also economic devastation.
Full contextual analysis of Section 4: The Economy here.
“Lassman does not think that an aggressive U.S. trade policy would lead to more manufacturing jobs. Rather, he writes, “Federal Reserve research shows” that the Trump Administration’s steel tariffs, and the retaliatory tariffs levied by other nations in response, “have cost about 75,000 manufacturing jobs while creating only about 1,000 jobs in the steel industry.” Furthermore, he writes that “protectionism and similar progressive policies tend to weaken American security.” Lassman maintains that “trade creates peace,” and if China weren’t so reliant upon trade with the U.S., it would be “much more unstable and dangerous.””
Project 2025 is a bit all over the place with regard to who supports tariffs and who does not. Lassman didn’t serve in the Trump administration, so perhaps he has a clearer picture of what a bad idea tariffs generally are. Lassman is correct in his assertion, but off on his numbers. Trump’s tariffs on China alone cost the United States 245,000 jobs, according to a Janurary 21 study, in addition to $51 billion in increased consumer prices and a net loss of $7.2 billion to the economy. More about that here.
For context, Lassman shares Section 4.6: Trade with Peter Navarro, who disagrees with him almost across the board. Peter Navarro DID serve in the Trump administration, and spent four months in prison in 2024 for contempt of Congress. Navarro is a proponent of “decoupling” from China.
Full contextual analysis of Section 4: The Economy here.
“In contrast to Lassman, Navarro thinks that “trade deficits matter a great deal.””
Trump is famously obsessed with trade deficits, and, like tariffs, doesn’t understand what they are or how they work. More commentary on that in the analysis linked below.
Full contextual analysis of Section 4: The Economy here.
“Exports promote U.S. economic growth only if the value of the resources used to produce them is less than the value of what we receive as imports in exchange for those exports.”
This is a gross oversimplification.
Exports do contribute to U.S. economic growth, but the relationship between exports and imports is more complex than just comparing the value of resources. When a country exports, it earns revenue, creates jobs, and stimulates domestic industries. Imports, on the other hand, provide goods and services that may not be available domestically or are cheaper or better in quality.
The core idea behind international trade is comparative advantage—countries specialize in producing what they’re best at and trade for the rest. If the U.S. exports something it’s more efficient at producing and imports something another country produces more efficiently, both sides benefit, regardless of the relative value of the inputs.
de Rugy’s statement implies that a trade deficit (importing more goods than we export) is necessarily bad, which is not always true. A trade deficit might indicate that a country is consuming more or investing more than it produces, but it could also reflect a strong currency or high consumer demand, which aren’t inherently negative for economic growth. See this Bite-Sized Brief where I explain how Trade Deficits work6, because Trump famously doesn’t understand them either.
In short, while it’s true that exports are beneficial when they add more value than the inputs, economic growth from trade is better understood through the lens of overall productivity and comparative advantage, not just the relative value of exports and imports.
Full contextual analysis of Section 4.3: Export-Import Bank here.
“The first challenge is rooted in MFN: the “most favored nation” rule of the World Trade Organization (WTO). According to the MFN rule, WTO members must apply the lowest tariffs that they apply to the products of any one country to the products of every other country. However, WTO members can charge higher tariffs if they apply these nonreciprocal tariffs to all countries.”
This is partially inaccurate, and entirely needing clarification. The statement is correct that under the MFN rule, WTO members are generally required to apply the same tariffs (and other trade rules) to the products of all WTO members. This means that if a country grants a favorable tariff rate (the “lowest tariffs”) to one member, it must extend the same rate to all other WTO members. This principle is aimed at preventing discrimination between trading partners.
The MFN rule does allow for certain exceptions, including entering into FTAs (Free Trade Agreements) or “customs unions”, where they apply lower tariffs to members of these agreements without extending the same treatment to all other WTO members.
There are also special preferences regarding developing countries, which allows developed countries to apply lower tariffs on goods from developing countries without violating the MFN rule.
The claim that “WTO members can charge higher tariffs if they apply these nonreciprocal tariffs to all countries” is incorrect. The MFN rule does not permit charging higher tariffs across the board simply as long as they are applied to all countries. In fact, the WTO agreements limit tariff rates (known as “bound tariffs”) that countries can impose. Members can raise tariffs only if the tariffs remain within these negotiated bound rates or if they have a legitimate reason, such as invoking safeguard measures (to protect a domestic industry) or through an authorized dispute settlement process.
Full contextual analysis of Section 4.6: Trade here.