Give Donald Trump this: we have been pants'd on almost every single trade deal we have done with our so-called partners around the globe.
For years now, when I get a chance to ask an official of either major party to name be it one deal in the last decade that we have signed that has given us a surplus, not one party functionary has been able to do so. They all come back with dogma of free trade and then try to embarrass me, as if I never took any economics in college or high school and don't know the first thing about how the world works.
I am now watching some of the same people who tried to embarrass me on so many shows for so many years now questioning the free trade orthodoxy that they have blathered on about and attacked people like me over for so many years.
So I have no beef when it comes to what Trump says about these trade deals: we have been horrendous negotiators, or we would have at least come up with a surplus on some of these deals.
You don't make it up in volume.
However, let's do go a step further. In his "acceptance" speech last night -- with quotation marks around the word acceptance because no matter how big this guy wins, the media still talks about him having a bad night this time because he lost Ohio -- besides his bashing of these truly idiotic trade deals, he did visit specific corporate incidents that he thinks are travesties and says he will change them if he becomes president.
Let's look them over. First, he says he is going to force Action Alerts PLUS charity portfolio holding Apple (AAPL) to make its cellphones here. I don't think anyone, including Trump, knows how he is going to make Apple do this. We don't have the workforce in this country to assemble all of those phones and most of the component makers reside in Asia, not here.
He would have to let Apple repatriate its foreign dollars with almost no tax and demand that the money be used to build factories, but even then he will have to help Apple train a workforce to meet the demand.
I like the idea that he can solve the repatriation tax issues, but he would be best just letting Apple continue to do exactly what it is doing, which is putting millions of people to work all over the place, including the U.S., designing and creating and selling apps.
Plenty of people work for Apple in this country, including in manufacturing jobs. Donald, go look at the brand new headquarters Apple is building: one of the largest ongoing construction jobs in the United States right now, if not the largest.
I say it's low on the list of problems.
Second? Carrier. Earlier in February United Technologies (UTX) notified union workers at a Carrier heating ventilation and air conditioning plant near Indianapolis that the work is being shifted to Monterrey, Mexico. You may bemoan this -- and the video that's on YouTube is a tough one.
But, welcome to the world of NAFTA. You can make this equipment so much cheaper in Mexico, it is a wonder anyone makes anything here. Great workforce. Well trained. Loyal. Low absenteeism. Five dollars an hour. Questionable environmental standards. Health care paid for by the state. Train line ready to take products north, just as easily as any train coming out of Indiana.
Honestly, this one's about free trade in a nutshell. If Greg Hayes, the CEO of United Tech, wants to make his numbers, wants to raise profits, wants to grow the company, it just makes more sense to move that plant to Mexico. You would have to re-write NAFTA to stop that truly no-brainer decision.
I want to re-write NAFTA. I know that sounded foolish when I first articulated it not long after I started Mad Money 11 years ago, but that's the way the law works. Mexico's just a fabulous place to do business. Take it from me. I do business there. Raising numbers, United Technologies.
Back in May of 2012, when Eaton (ETN) bought Cooper Industries, it chose to move its headquarters to Ireland. The company did so to save $120 million in taxes. So when Trump went to Ohio, it was easy to take a swipe at the Cleveland company for doing so.
While I can take issue with how well that merger has performed, I can't take issue with the decision to move the headquarters, because if our government was dumb enough to allow companies to shift headquarters so easily to avoid taxes and not evade them, which is a criminal case, then Eaton was right to do so.
I blame any headquarters move on the inability of Republicans and Democrats to make commonsensical policies that disadvantage American companies by keeping their headquarters here instead over overseas, particularly when they are international companies. Sure, it's just a maildrop: Eaton's very much a Cleveland company. But the fault is in Washington, not with Eaton.
Finally, there's Pfizer (PFE). Here's a company that merging with another company that has a foreign headquarters in Ireland, Allergan (AGN), and it is playing by the exact rules that Treasury set up to meet the new tests of inversion. The deal is structured precisely the way the Obama administration established its safe harbor for inversions.
If Trump gets to be president, maybe he can rewrite the IRS rules to allow it so that the next company can't do what Pfizer's doing, but it would be impossible to undo the Allergan merger by January. It will be closed.
So, Apple, United Technologies, Eaton and Pfizer -- all under attack by Trump -- will, hate him or like him, all be unscathed in a Trump presidency, unless real laws are changed and real deals are overturned.
For a different outcome, with the possible exception of future deals like Pfizer's and an aggressive use of Treasury rules, nothing will change with a Trump presidency unless he updates the Art of the Deal to prove he can buffalo everyone in the room, Democrats and Republicans alike.
Call that wishful thinking.
