Transcription by Accurate Secretarial LLC
My fellow Americans, last Wednesday I notified Congress of my decision not to impose either quotas or tariffs on foreign shoe imports into this country.
I’d like to talk with you about that decision because the case of shoe imports illustrates why so-called protectionism is almost always self-destructive, doing more harm than good even to those it’s supposed to be helping.
Advocates of protectionism often ignore its huge hidden costs that far outweigh any temporary benefits.
The Council of Economic Advisers estimate that the quotas on shoe imports that I turned down would have cost the American consumer nearly three billion dollars, and there are other costs.
Quotas would have entitled our trading partners to another two billion dollars in compensation, or they would have retaliated; slapping quotas or tariffs on the products we sell to them.
That would mean an immediate loss of American jobs and a dangerous step down the road to a trade war.
Also, if our trading partners can’t sell their products here, they can’t afford to buy our exports and that means more lost jobs for Americans.
Protectionism almost always ends up making the protected industry weaker and less able to compete against foreign imports.
Between 1977 and 1981, U.S. footwear manufacturers received protection from foreign imports, but at the end of that time they were more vulnerable to foreign competition than before.
Instead of protectionism, we should call it destructionism.
It destroys jobs, weakens our industries, harms exports, costs billions of dollars to consumers and damages our overall economy. Of course, free trade also means fair trade.
We will move vigorously against unfair trading practices, using every legal recourse available to give American manufacturers a fair shake at home and open markets abroad.
The balance of trade has become a very emotional issue; some claim our trade deficit has cost us millions of jobs.
Congress is awash in bills calling for trade sanctions and retaliation.
But look at the facts.
In 1980 we had a trade surplus, and about 99 million Americans had jobs.
Today we have a trade deficit, and almost 107 million Americans are working.
Despite a growing trade deficit, we’ve gained over seven and half million new jobs since 1980.
Our free, open, and growing economy has put more Americans to work in 1985 than ever before in our history.
We’ve created more jobs in the last three years than Europe and Japan combined.
The surest way to destroy those jobs and throw Americans out of work is to start a trade war.
And one of the first victims of a protectionist trade war will be America’s farmers, who have it tough enough already.
A news story the other day said protectionist fervor on the Hill is stronger than it has been since the 1930’s.
Well now, some of us remember the 1930s, when the most destructive trade bill in history, the Smoot-Hawley tariff act, helped plunge this nation and the world into a decade of depression and despair.
From now on, if the ghost of Smoot-Hawley rears its ugly head in Congress, if Congress crafts a depression-making bill, I’ll fight it.
And whether it’s a tax, trade or farm legislation that comes across my desk, my primary consideration will be whether it is in the long-run economic interest of the United States.
And any tax hike or spending bill or protectionist legislation that doesn’t meet the test of whether it advances America’s prosperity must and will be opposed.
America is getting stronger, not weaker.
Our 23-percent tax rate cuts have given us two and a half years of economic expansion, a dramatic increase in after-tax personal income, and the most dramatic drop in poverty in 10 years.
We must not retreat into the failed policies of the past, whether they be protectionism or higher taxes.
Let’s go forward by cutting income tax rates again and building opportunity.
On Monday we’ll be recognizing America’s working men and women.
We’ve created over seven million jobs in the last four and a half years.
On this Labor Day, let’s challenge ourselves to create ten million more in the next four.
To do that, we’re going to have to be courageous, hopeful, hard working, and proud; which pretty well sums up what it means to be an American.
There is one quality I left out; faith in the loving God who will continue to guide us on the optimistic course we’ve set.
Enjoy your Labor Day holiday.
Until next week then, thanks for listening, and God bless you.