Trump, Clinton's trade proposals would "deeply harm" U.S. economy, study says

The proposed trade policies of both Donald Trump and Hillary Clinton, the 2016 Republican and Democratic nominees for U.S. president, would "deeply harm" the U.S. economy, according to a study released by a U.S. think tank.

"Clinton's proposed trade and international economic policies would damage American well-being, primarily but not solely due to her stated opposition to TPP and to further economic integration," Adam Posen, president of the Washington-D.C. based non-partisan Peterson Institute of International Economics (PIIE), said in an introduction to the institute's study of both Trump and Clinton's trade policy proposals that was released on Monday.

"The policies proposed by Trump are another matter altogether. His stated approach to the global economy of waging trade war and protecting uncompetitive special interests would be disastrous for American economic well-being and national security," Posen said.

Trump has threatened to slap punitive tariffs on products imported from China and Mexico, withdraw from the World Trade Organization (WTO), and abrogate existing preferential trade agreements, such as the North American Free Trade Agreement (NAFTA), making protectionist trade as a centerpiece of his campaign.

"If implemented, these proposals would provoke retaliation by U.S. trading partners, unleashing a trade war that would send the U.S. economy into recession and cost millions of Americans their jobs," the PIIE study found.

U.S. industries that manufacture machinery used to create capital goods in the information technology, aerospace, and engineering sectors would be the most intensely affected, according to the study.

The trade shock would also damage sectors such as wholesale and retail distribution, restaurants, and temporary employment agencies, particularly in regions where traded commodities are produced, the study said, noting that the U.S. state of Washington would suffer a 5 percent private sector job loss relative to baseline in a full trade war scenario.

"While Clinton's stated trade policy would be harmful, Trump's stated trade policy would be horribly destructive," Posen said, adding the institute has no partisan goal with undertaking this study, which aims to "prevent severe economic policy mistakes by the next president of the United States" .

"Curbing trade will worsen rather than solve the problem of American income stagnation by reducing families' purchasing power, and by further slowing productivity growth," he said. Enditem