Republican tax plan will lead to more offshoring of U.S. jobs and a larger trade deficit

Courtesy of The Washington Post. By Jared Bernstein

Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of ‘The Reconnection Agenda: Reuniting Growth and Prosperity’.

Upon his return from Asia, President Trump announced that he planned to work “as fast as possible” to reduce the U.S. trade deficits with the nations he visited. He later tweeted out his excitement about working with fellow Republicans to pass their “GREAT Tax Bill!”

Left hand, meet right hand. Those two goals stand in stark opposition to one another.

The Republican tax cut plan has been justly criticized for worsening both income inequality and the national debt, but the plan has another big problem: It’s likely to lead to more outsourcing of U.S. jobs and a larger trade deficit. That’s obviously a negative for factory jobs and net exports, but it’s also precisely the opposite of what Trump continues to promise to many of his working-class supporters.

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