World War II Ended in 1945—So Why Do We Have a Marshall Plan Mentality When it Comes to World Trade?

A Marshall Plan export economic mindset that stretches back a half century has set us on course towards $1 trillion trade deficits stretching as far as one can see.

It is important to understand how we got into this mess. Only after World War Two did the United States begin to advocate a liberal trade policy. To promote post-war recovery in Western Europe and Asia the U.S. opened its market wide to war-time enemies without requiring equal access for American exports. The U.S. trade policy that developed during this period is remarkable inasmuch as it permitted friendly countries to discriminate openly against American products with impunity. Domestic financial interests were completely subordinated to U.S. foreign policy. Imports from Germany and Japan were aggressively encouraged whereas the necessity of exports was largely disregarded.

A 1952 declassified document from the National Security Council (NSC) recommended that the entrance of Japanese goods to the U.S. should be “facilitated” to “halt economic deterioration” that “creates fertile ground for communist subversion”. Our bilateral trade agreement with Japan in 1955 completely surrendered domestic manufacturing concerns to foreign policy objectives. The U.S. granted Japan historic tariff reductions on almost all its exports and received no concessions in return.

By the late-60’s it was already clear that our global competitiveness was in rapid decline. However, instead of rethinking and adjusting our trade policies, the same flawed strategy was perpetuated. Our markets were opened further to several Asian, African and Latin American countries while getting very little trade reciprocation in return.

It took just twenty years for one of the nation’s greatest miscalculations to become deeply rooted in our culture; essentially subjugating the world’s number one compulsive consumer by unconditionally surrendering its export industries and the futures of millions of Americans whose livelihoods are tied to them.

There is nothing new under the sun in global trade. Britain at the height of its empire in the middle of the nineteenth century embraced unilateral free trade and opened its markets to the world without any reciprocal consideration for its industries. It is fitting to remember within seventy years of this charitable gesture, Britain was nearly broke and its position as one of the world’s leading financial markets evaporated.

To keep American from suffering the same fate, our Marshall Plan mentality must be reversed so that we never cede our once envious export prowess to our competitors and adversaries, and thereby protect the economic future of millions of our citizens.

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