Trump’s immigration and trade policies are being driven by pessimism and bad economics

During the 2016 presidential campaign, Donald Trump would talk about the “mindset” America needed to solve its problems. Although Trump didn’t go into much detail, the context suggests he meant the can-do, deal-making attitude of a successful businessperson. It’s an attitude or view that sees challenges as opportunities

But what is the mindset that suggests it’s a good idea right now to threaten withdrawal from a successful South Korean trade agreement that’s only a few years old? And what is the mindset that suggests it’s a good idea right now to begin revoking the legal status of young undocumented immigrants? What is the mindset that would make such moves priorities at a time of rising tension on the Korean peninsula and a stalled economic agenda here at home?

After all, there’s no evidence the Korea-US trade agreement is failing. Exports of manufactured goods are up 8.4% since 2011, while services have risen 34.5%, according to a March 2016 report from the US trade representative, which concluded: “The US-Korea trade and investment relationship is substantially larger and stronger than before the KORUS agreement.” The modest trade deficit in goods — there’s a surplus in services — is of little economic significance. As economist William Nordhaus recently noted, “Actually, to a first approximation, trade deals have no impact on the unemployment rate or the trade deficit.”

Likewise, there is at least some evidence of significant economic downside to ending President Obama’s executive action on immigration. And while it’s easy to sketch out some sort of compromise on immigration, it was also easy to sketch out a compromise that would have by now delivered tax reform and infrastructure spending.

Indeed, much of the public concern about immigration seems misplaced. For instance: The newpaper “The Rise and Fall of US Low-Skilled Immigration” finds: “Because major source countries for US immigration are now seeing and will continue to see weak growth of the labor supply relative to the United States, future immigration rates of young, low-skilled workers appear unlikely to rebound, whether or not US immigration policies tighten further.” As the paper theorizes, perhaps immigration concern is really more about signalling disapproval of past immigration policy decisions than dealing with current problems.

Seems the mindset at play isn’t one of can-do optimism but rather one of zero-sum thinking and scarcity. It’s the mindset of a closed politics rather than an open one.

 
James Pethokoukis is a columnist and blogger at the American Enterprise Institute. Previously, he was the Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.