AP FACT CHECK | Overstatements in Trump’s economic speech

[EDITOR’S NOTE — A look at the veracity of claims in the presidential campaign]

By JOSH BOAK

AP Economics Writer

WASHINGTON (AP) — Donald Trump laid out economic ideas in a speech in Pennsylvania on Tuesday that did not always deal squarely with economic realities. A look at some of his statements and how they compare with the facts:

TRUMP: “When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians have proven, folks, have proven they do nothing.”

THE FACTS: Not exactly nothing.

The Obama administration slapped Chinese steelmakers with a combined 522 percent penalty this year.

Buttressed by government subsidies, Chinese mills churned out too much of the cold-rolled steel used for autos and other products. So the Chinese firms slashed steel prices and dumped their steel on U.S. shores. This prompted a complaint by five U.S. steelmakers in 2015, which the Commerce Department investigated as required before announcing the first of the new duties in March.

If Trump has any bone to pick, it might be that the required investigation took too long to protect U.S. mills fully from the Chinese dumping.

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TRUMP: “We tax and regulate and restrict our companies to death, then we allow foreign countries that cheat to export their goods to us tax-free. As a result, we have become more dependent on foreign countries than ever before.”

THE FACTS: Dependence cuts both ways.

Those same foreign factories depend on U.S. customers for their products. So the same argument could be made that China has grown more dependent on the United States.

This includes Wal-Mart shoppers who prefer lower prices, rather than products made domestically. The Associated Press confirmed this preference in a survey this year that found roughly two-thirds of Americans would rather buy $50 pants sewn in Asia than $85 pants sewn in the United States. If prices rise too high, Americans will spend less and economic growth will slow.

Nor are foreign and U.S. factories necessarily in direct competition. Roughly half of imported goods are used by U.S. companies to put together finished products, according to the American Action Forum, a center-right advocacy organization.

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TRUMP: “Today, we import nearly $800 billion more in goods than we export. This is not some natural disaster. It is a politician-made disaster.”

THE FACTS: That’s in the ballpark, but not the whole trade story.

The trade deficit on goods was $762.6 billion in 2015. But he neglects to include the valuable services that foreigners buy from U.S. firms. Those services reduced the total trade deficit to roughly $500 billion, according to the Census Bureau.

It’s hard to see the problem as the sole fault of politicians. Many businesses chose to relocate their factories abroad in order to increase their profits, while others kept their production in the United States. Trump himself outsourced the stitching of his neckties and branded clothing to China.

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