In theory Free Trade leads to optimal benefits for all. The US gets less expensive goods and (eventually) the displaced US workers find other (more productive) work. The last 45 years shows that this is not case when competing with low-cost nations. There are a number of studies that indicate major costs to trade and low-skilled immigration. See: http://www.vox.com/new-money/2016/11/30/13764146/china-imports-trump-sad



We need to follow the Terrain of our economic experience and not the false Map of standard economics. Except under conditions of diminishing returns, which often do not exist free trade does not generate optimal benefits. As noted above, one nation can use its lower costs to dominate selected production processes. This was pointed out by Baumol and Gomory See: https://www.amazon.com/Conflicting-National-Interests-Robbins-Lectures/dp/0262072092/ref=sr_1_5?s=books&ie=UTF8&qid=1473299717&sr=1-5&keywords=Baumol+Trade and http://www.ralphgomory.com/articles-on-trade/ We are on new ground here and Trump is one of the few who recognizes Trade as a problem. Standard economics does not think this is an issue.



The simplist approach is to restructure international trade around Warren Buffet's idea of creating a market for Import Certificates based on US exports. This would automatically balance trade (an Import Certificate based on exports is needed for any Import), provide a rules-based approach (vs. bureacratic), and block massive rent-seeking around Trade Policy. See: https://en.wikipedia.org/wiki/Import_certificates There would probably be a period of phase in to avoid major disruptions. The market should be run on a national basis, if China or Mexico wants to export they have to buy something. Since the US runs an almost 800 Billion dollar trade deficit the disruptions will not be too huge to the US. Given flexible supply chains it should be easy to do import substitution and bring this $800B in production to US soil. We would still have some level of international competition, and more time for the working classes (and the entire nation) to improve their productivity.



US Exports are 13.7% of GNP, imports are around 17%, other nations would compete to maintain their share 13.7% of the US imports until equality is reached. Our exports should not be hurt too much and if they are we can do rapid import substitution and deport illegal workers as needed.

