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Rapaport Statement on President Trump’s Trade Policy

Feb 21, 2017 9:22 AM   By Martin Rapaport
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RAPAPORT... President Trump's trade policy is based on his principles of “America First” and “Reciprocity.” America must use its purchasing market power to ensure reciprocal benefits from trade partners. Those who do not reciprocate, should not be given free access to our markets.

Previous administrations sought to expand international trade by freely opening U.S. markets to groups of multinational trade partners. By exporting jobs and prosperity, America hoped to buy world peace and increase foreign demand for sophisticated American products. While this may have worked for many years, the current reality is that America is getting a bad deal.

Deals with countries like China are unbalanced. America exports jobs and prosperity to China. In return it gets strategic military threats in the form of aircraft carriers, fake islands and claims to the South China Sea. Should the U.S. be supporting those who stand against it? Shouldn’t the U.S. use its market power to demand reciprocal relationships that support strategic “America First” interests?

Trade policy is more complex as it interacts with domestic policy. Free trade is not free when it costs American jobs. While cheap imports may feel good, they reduce jobs whose wages fuel the U.S. economy. “America First” means American jobs must sometimes come before cheap imports even if that means higher prices.

So trade policy is not just about trade. It’s about jobs, prosperity, prices, national security, and a host of other social, economic and political factors. Presidential management of trade policy must be balanced, centralized and coordinated in the face of powerful competing interests. Trade policy decisions should be based on President Trump's principles of “America First” and “Reciprocity.”

Martin Rapaport
Chairman
RAPAPORT

Addendum:

Multinational Trade Agreements

President Trump’s bilateral trade policies may conflict with existing multinational trade agreements. Such agreements require everybody to agree with everybody about everything. They destroy U.S. ability to create effective bilateral trade agreements that optimize the value of its market power. It’s time for the U.S, to review the benefit of multinational trade agreements and U.S. membership in the World Trade Organization (WTO).

©2017 Rapaport USA, Inc.
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Appropriate and Necessary
Mar 19, 2017 12:36AM    By Martin Rapaport
Dear Friends,

Thank you for your comments. The global diamond trade cannot ignore new political realities. Understanding President Trump's new foreign trade policy is critical to your survival in the jewelry industry.

For example: The proposed and likely implementation of a Border Adjusted Tax (BAT) that would tax all imports (including diamonds, gems and jewelry) by as much as 20% will have huge impact on our trade. Does anyone think a 20% border tax and why it is happening is not important?

In my view if you do not understand President Trump's new policies of "Reciprocity" and "America First" you will not be able to anticipate the huge changes that will directly impact your business.

Whether you like President Trump or politics is irrelevant. In the new world reality, if you don't understand politics you won't understand diamonds.

Martin Rapaport
Chairman Rapaport Group
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Inappropriate
Feb 23, 2017 4:30PM    By Marco Cheung
I second Mr. Streep's comments. This statement, put out here in this form, is completely inappropriate, in bad taste, and at odds with what one would have thought Rapaport stands for as an important player in this global industry and beneficiary of open trade. Whether this statement is genuine or made to be in your President's good books, only you will know. But if you really do think that the US is the world's Knight in shining armor and China the big opportunist and provocateur, then "... Sad!"
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America first
Feb 22, 2017 11:40PM    By James Sinclair
Hello Martin,

Firstly, I would like to state that I am a regular user of RapNet and feel it is the best platform of it's type in the world today. By allowing the world's producers to offer their diamonds directly to downstream buyers, in a safe and secure way, it is highly democratic and at odds with your Statement on President Trump's Trade Policy.

In reality, if this statement is your vision of the USA in the world of tomorrow, under Trump, then for those of us in "small" countries, your article gives us little hope of the fair go, which you are arguing the USA has missed out on in recent history.

You are making the case for the strongest is entitled to the spoils and if the weak don't like it then that's just bad luck.

The de-facto pricing of diamonds in the retail market today, is the price on BlueNile and similar companies. They have huge volume, extremely low overheads and until recently, no bricks and mortar outlets. They also make small profits, that are not reflective of the real price of doing business of a "luxury' nature. BlueNile is not in the "Luxury" business. If you ask jewelers in the USA what, or who, is the cause of their loss of profit margin, the answer will be BlueNile and others that use their business model. It is not trade imbalances caused by bad trade deals of preceding USA administrations.

I have run out of space to talk about LARGE USA companies shifting money to low tax havens, maybe another time.
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Free trade article
Feb 21, 2017 11:43PM    By Norbert Streep
Martin.

Irrespective of my opinion on the subject I don't think you should voice political comments in your business's Facebook portal. You get paid to inform us about our industry and to produce your weekly price guide, that's based on trade in all the important diamond centers around the world.

Stick to your vocation or get politically active.

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