AP FACT CHECK: Trump ignores a big slice of trade
AP FACT CHECK: Trump ignores a big slice of trade
AP FACT CHECK: Trump ignores a big slice of trade
By CALVIN WOODWARD
Mar. 03, 2018
WASHINGTON (AP) — President Donald Trump leaves out a big component of trade when he complains about the huge imbalance between what the U.S. buys from abroad and what the world buys from the U.S. He ignores services, an American strength and part of the trade equation.
So it was in a tweet Saturday, capping a week in which he seemed itching to start a trade war that he said would be "easy" to win. Here's a look at some his recent statements on trade, guns, the economy and matters involving the Russia investigation:
TRUMP: "The United States has an $800 Billion Dollar Yearly Trade Deficit because of our 'very stupid' trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!" — tweet.
THE FACTS: No, the trade deficit is not $800 billion. It's $566 billion. The U.S. in 2017 bought $810 billion more in foreign goods than other countries bought from the U.S., says the Census Bureau. That deficit in goods was offset by a $244 billion trade surplus in services, like transportation, computer and financial services, royalties and military and government contracts.
Similarly, Trump has complained about a trade deficit with Canada even though the U.S. runs an overall surplus with that country — thanks to services.
He said in December that he corrected Canadian Prime Minister Justin Trudeau on this matter when they talked. But the U.S. Trade Representative's Office said the U.S. enjoyed a $12.5 billion trade surplus with Canada in 2016. A $12.1 billion U.S. deficit in goods was overcome by a $24.6 billion surplus in services.
TRUMP: "You take the Pulse Nightclub. If you had one person in that room that could carry a gun and knew how to use it, it wouldn't have happened, or certainly not to the extent it did, where he was just in there shooting and shooting and shooting, and they were defenseless." — bipartisan meeting with lawmakers Wednesday.
THE FACTS: That's a misrepresentation of the scene at the club in Orlando, Florida, where a gunman killed 49 people in June 2016. There was an armed police officer working extra-duty at the club, and he exchanged gunfire with Omar Mateen when the attack began. More officers arrived within minutes and also engaged the killer, who ultimately died in a shootout with police several hours later.
TRUMP: "Why is A.G. Jeff Sessions asking the Inspector General to investigate potentially massive FISA abuse. Will take forever, has no prosecutorial power and already late with reports on Comey etc. Isn't the I.G. an Obama guy? Why not use Justice Department lawyers? DISGRACEFUL!" — tweet Wednesday.
THE FACTS: The report that Trump suggests is late is actually not. The office he attacks as toothless has more power than he credits it with. And the inspector general he dismisses as an "Obama guy" is an independent civil servant who was appointed to federal positions both by the Bush and Obama administrations.
The issue here is that Attorney General Jeff Sessions asked the Justice Department's internal watchdog to investigate whether potential abuses of the Foreign Intelligence Surveillance Act occurred when prosecutors and agents in 2016 applied for and received a secret warrant to monitor the communications of a onetime Trump campaign associate, Carter Page. Trump wants the matter investigated, all right, but at what he considers a more serious level.
He regards a probe by the inspector general to be a weak move; hence, the scolding of his own attorney general. But that internal office would be the natural place within the Justice Department to do the type of review that Sessions has requested.
Trump is right that lawyers in the inspector general's office can't bring criminal charges on their own. But they can and often do refer matters they investigate for potential prosecution.
TRUMP, addressing governors Monday: "We've done many other things, as you know, and I won't go over them because I want to be hearing from you today. But many other things that, frankly, nobody thought possible. GDP: 3.2, 3, 3... . I think we're going to have another really big one coming up this current quarter. Maybe a number that nobody would have thought would ever be hit." — addressing governors Monday.
HE FACTS: He cited three quarters of annualized growth of the gross domestic product and got one of them right. The correct percentages for each quarter last year are, in order, 1.2 percent, 3.1 percent, 3.2 percent and 2.6 percent. That fourth-quarter percentage is tentative and might still be adjusted. The first quarter encompassed Barack Obama's final weeks as president.
Overall, the U.S. economy grew by 2.3 percent last year, subject to possible adjustments in the fourth quarter. That's an improvement from Obama's final year, 1.5 percent in 2016, but below the best year of the Obama presidency, 2.9 percent in 2015.
Trump has set high — even sky high — expectations for GDP growth, saying late last year, "I see no reason why we don't go to 4 percent, 5 percent, and even 6 percent." Federal Reserve officials and most mainstream economists expect economic growth closer to 2 percent. The economy rarely achieves phenomenal growth approaching 6 percent.
As for his prediction Monday of a "really big" number in the January-March quarter, time will tell; the figure comes out April 27.
Forecasts are all over the map, but they have fallen recently. Sales of new and existing homes fell in January and Americans slowed their spending at retail stores that month. Macroeconomic Advisers, an economic consulting firm, lowered its forecast of first-quarter growth to 1.7 percent from 1.9 percent in recent days, based on new manufacturing and home sales data. Trump's announcement of coming steel and aluminum tariffs has introduced even more volatility.
TRUMP: "When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!" — tweet Friday supporting his announcement that he will impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports.
THE FACTS: Trade wars have not been easy before.
The president's argument, in essence, is that high tariffs will force other countries to relent quickly on what he sees as unfair trading practices, and that will wipe out the trade gap and create factory jobs. The record shows that tariffs, while they may help certain domestic manufacturers, can come at a broad cost. They can raise prices for consumers and businesses because companies pass on at least some of the higher costs of imports and imported materials to their customers. A trade war also is bound to mean that other countries erect higher barriers of their own against U.S. goods and services, punishing American exporters.
The United States first became a net importer of steel in 1959, when steelworkers staged a 116-day strike, according to research by Michael O. Moore, a George Washington University economist. After that, U.S. administrations imposed protectionist policies, only to see global competitors adapt and the U.S. share of global steel production decline.
SARAH HUCKABEE SANDERS, White House press secretary, when asked about the fact that three Trump campaign figures have acknowledged criminal wrongdoing: "I think that those are issues that took place long before they were involved with the president, and anything beyond that, because those are active investigations, I'm not going to go any further than that." Asked specifically about one of them, Rick Gates, she said: "The actions that are under review and under investigation took place prior to him being part of the president's campaign."
THE FACTS: That's not true about Gates or the other two who have pleaded guilty, Michael Flynn and George Papadopoulos. Nor is it true about Paul Manafort, the fourth Trump campaign figure charged in special counsel Robert Mueller's investigation of Russia's interference in the election and the Trump team's ties with Russians.
The criminal conduct alleged by Mueller overlaps with the 2016 presidential campaign and stretches into 2017.
In one example, court papers filed Friday state that in November 2016, the month Trump was elected, and February 2017, when Trump was president, Gates and Manafort caused "false and misleading" letters to be sent to the Justice Department about their foreign lobbying work. The letters, intended to explain their failure to register as foreign agents as required by the law, falsely stated that their work did not include meetings or outreach in the United States, and that they could not recall conducting outreach to U.S. government officials or U.S. media outlets.
Gates was a 2016 Trump campaign deputy chairman; Manafort was the campaign chairman for about five months in 2016.
Flynn, a campaign and transition aide who briefly became Trump's national security adviser, pleaded guilty to lying to the FBI about his contacts with the Russian ambassador to the U.S. in December 2016, after the election.
Papadopoulos pleaded guilty to lying to the FBI in January 2017 about his contacts during the campaign with people who claimed to have ties to Russian officials. He was a foreign policy adviser to the Trump campaign.
State Department's historical summary of "perils of protectionism": https://history.state.gov/milestones/1921-1936/protectionism
Trade statistics: https://www.census.gov/foreign-trade/statistics/historical/gands.pdf
Trade with Canada: https://ustr.gov/countries-regions/americas/canada
Associated Press writers Christopher Rugaber, Eric Tucker, Josh Boak and Jill Colvin contributed to this report.
Find AP Fact Checks at http://apne.ws/2kbx8bd
Follow @APFactCheck on Twitter: https://twitter.com/APFactCheck