Donald Trump faces a tough test on international trade

It’s up to Trump and his team to deliver.

Saving 800 jobs in Indiana from relocating to Mexico is not a trade policy.

For every promise of creating and saving jobs, there are consequences, economic impacts that haven’t been evaluated and significant costs to consumers.

The reality of President-elect Donald Trump’s proposals on tariffs and trade is likely going to look very different from his as-seen-on-Twitter version of instant gratification.

Trump’s campaign jump-started an important conversation on global competitiveness, trade policy, tax reform and job creation. But for him to fulfill his broad promises to create a substantial number of jobs, expand the economy and transform the nation’s ability to compete will require more complex, specific and well-thought-out proposals than anything he has presented so far. To understand why, Americans have to remember the size and scope of the U.S. economy. The labor force includes 150 million jobs, and easily ebbs and flows by more than 100,000 jobs a month. The deal with air- conditioner manufacturer Carrier Corp. is minuscule, reflecting less than half of 1 percent of the number of jobs created in November alone. What’s more, the manufacturing industry Trump is so focused on makes up just 13 percent of the nation’s overall economic activity.

Beyond that, Trump’s plan to institute a stiff 35 percent tax on imports of companies that leave the United States and build factories elsewhere has been panned by most economists and trade experts. Its specificity likely makes it illegal. Even if it were ruled not to be, the unintended consequences, particularly on consumer prices and spending, could be enormous.

But what does the tariff idea say about what Trump might do in office?

Economists note that Trump’s constant drumbeating about global economic inequities could open the door for more realistic and substantive ideas. That could include significant tax-code reform that goes beyond lowering taxes and includes changes to deductions and corporate loopholes that might make it more difficult for companies to avoid paying taxes on their profits.

Trump has mentioned penalizing China for its currency manipulation. Such penalties could include tariffs on Chinese imports. There are consequences of such a move — in this case, how Beijing would respond, likely with tariffs of its own. That could usher in a dangerous trade war. So, while it is worth exploring ways to level the world’s economic playing field, it’s important to consider potential effects. It’s one thing to create a short-term economic win; it’s harder to address the long-term repercussions.

Then there’s the need to look beyond manufacturing, from pharmaceutical research to legal, medical or financial services. Trade in services, and not just goods, has to be addressed, so that the United States can grow in those fields, too.

What’s missing from Trump’s end of the conversation is any talk or understanding of the trade-offs, from lower government revenues to higher prices from companies that have to compensate for more expensive imports. If prices rise, consumer spending could slow. Economists have legitimate concerns that such a path could lead the United States into recession. And Americans in poverty could be even worse off, because they’re more dependent on low-priced goods.

Even as Trump rides a wave of nostalgia, it won’t get him to where he or Americans want to go. No big idea or small success will bring back millions of manufacturing jobs or return us to the heyday when coal was king and steel-mill jobs were tickets to a good life. Indeed, it would be unwise, if not impossible, to return to the days when factories were the centerpieces of our towns and cities, and one employer carried a community on its back. Gains from automation and technology, and improved environmental standards and regulation, far outweigh any negatives.

So, even if some factories were to reopen or stay open, robots will ensure that there will be far fewer employees. That’s true no matter what new trade policy unfolds. Retraining and education become paramount to rebuilding industries of old and supporting those that are new. That’s important, too, as towns and cities try to find multiple economic paths to avoid the fall that comes when the one big employer fails.

No matter what Trump does, he’s not going to prevent every corporate failure or departure. Trump’s economic advisers know that firsthand. They’re corporate executives who have benefited from outsourcing and free trade, who have engineered layoffs and turned to automation — folks from General Motors and General Electric, Walmart and IBM. How their perspectives will mesh with Trumpian economics, whatever that may be, remains to be seen. And even as we consider cabinet picks like Steven Mnuchin as treasury secretary and Wilbur Ross as commerce secretary, we don’t yet know who they will hire to create and implement economic policy. The expertise of the staff Trump surrounds himself with is just as important.

The nation’s employment and economic diversity are integral to America’s greatness. A broad approach, with attention to the long-term, can make a difference. It’s up to Trump and his team to deliver that if he is to fulfill his No. 1 promise to America: jobs.

The Editorial Board