Donald Trump Is Preparing to Unravel a Century of GOP Trade Policy - Pacific Standard

Donald Trump Is Preparing to Unravel a Century of GOP Trade Policy

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The president-elect’s pick of Robert Lighthizer as U.S. trade representative signals a new era of protectionism.

By Jared Keller

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(Photo: Don Emmert/AFP/Getty Images)

On New Year’s Day in 1994, something miraculous happened: The North American Free Trade Agreement entered into force. After a bitter public debate, the House of Representatives had passed the trilateral agreement between the United States, Mexico, and Canada with 132 Republicans and 102 Democrats in favor, according to the Washington Post; the Senate voted along similar lines, with 34 Republicans and 27 Democrats in support. When the historic GOP majority of Newt Gingrich’s so-called “Republican revolution” swept through Congress later that year, the course of Republican trade policy seemed clear: The era of free trade was here.

How things have changed. On the 2016 campaign trail, President-elect Donald Trump routinely decried free trade agreements like NAFTA and the controversial Trans-Pacific Partnership as “catastrophe[s]” for the U.S. economy, vowing to withdraw from the TPP while leaning on “tough and smart” trade negotiators willing to label China a currency manipulator and put the screws to America’s NAFTA partners. And, on Tuesday, Trump found one of those negotiators in trade lawyer Robert Lighthizer, whom he named as the U.S.’s chief trade representative to “fight for good trade deals that put the American worker first,” according to Reuters.

Lighthizer’s appointment is confirmation that Trump plans to make good on his promise to stand up to China on the global stage. A former official of Ronald Reagan’s administration who has spent recent years working on behalf of U.S. steel companies, Lighthizer has been a major critic of China’s role in the World Trade Organization. His appointment, in the libertarian Cato Institute’s words, completes Trump’s “protectionist triumvirate” alongside China hawk Peter Navarro to head the newly established National Trade Council and (to a lesser extent) billionaire Wilbur Ross as secretary of the Department of Commerce, both of whom were instrumental in crafting Trump’s campaign trail barbs directed toward the country’s economic competitors abroad.

Lighthizer’s appointment fits neatly into Trump’s doctrine of economic nationalism. Since Election Day, Trump’s coterie of adherents have aggressivelyflogged the president-elect’s negotiating acumen despite the fact he hasn’t entered office yet. In December, Trump even threatened to impose a 35 percent tariff on U.S. businesses that sent jobs to other countries: “Any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S., without retribution or consequence, is WRONG!” he wrote in a series of tweets. Now even Newt Gingrich has reversed course from his decades of advocacy for free trade.

Gingrich’s defense that the U.S. is in “a different era” isn’t totally unfair. As Vox points out, Trump’s reversal certainly isn’t unprecedented for a Republican president depending how far back through U.S. political history you travel. Protective tariffs were all but Republican orthodoxy from Reconstruction to the onset of the Great Depression, from Abraham Lincoln’s protectionist impulses to the questionable deployment of the Smoot-Hawley Tariff after the stock market crash of 1929. Trump’s trade agenda, as Vox puts it, “takes the GOP back a century.”

But Trump’s forceful brand of economic nationalism is about more than just an ideological upset for the GOP — it seems the president-elect is deadly serious about starting a trade war with China. This, as Pacific Standard’s Dwyer Gunnobserved in November, would be disastrous:

Prices on many consumer goods could increase, which would hurt lower- and middle-income Americans especially. And if consumers in other countries stopped purchasing American-made goods, employment in the U.S. would actually fall.

Economic models of Trump’s one-two punch to Mexico and China analyzed by the Washington Postsuggest that a trade war would render up to four million American workers unemployed when the two nations retaliate with their own arsenal of tariffs. Analysis suggests Trump’s bold 35 percent import tariffs would be not just burdensome for American companies like Ford and low-income taxpayers, but “devastating to the U.S. and global economies and would destroy the international trading system,” as Cato puts it.

Now, Trump can’t start unilaterally knocking heads the minute he assumes the presidency on January 20th. The executive branch needs Congress to institute such a steep tariff, and recent unilateral protective tariff initiatives pursued by President George W. Bush in 2002 and President Barack Obama in 2009 were met with international backlash.

At home, Trump faces opposition from within his own party over his 35 percent import tariff: “I do not want a trade war,” House Majority Leader Kevin McCarthysaid in December. “I do not believe in a trade war. I do not think trade wars are healthy. I think history has shown that trade wars are not healthy.”

What’s scary, though, is that Trump doesn’t really care. Trump has telegraphed an extraordinary capacity to ignore the political (and public relations) risks posed by his path to making America great again, especially when it comes to his inexplicable cabinet appointments. While the American public has a generally positive opinion of foreign trade, most are split on free trade deals like NAFTA and the TPP, though 85 percent of Republicans indicated during the 2016 campaign that free trade “has cost more jobs than it has created,” according to a Politico/Harvard poll. Why this turnaround? A Morning Consult poll indicates that Republicans overwhelmingly feel the U.S. has suffered during the last two decades of globalization. As Vice President-elect Mike Pence put it: “[T]he free market has been sorting it out and America’s been losing.”

Trump’s appointment of Lighthizer is an affirmation of his incoming administration’s protectionist doctrine and, in some ways, a harbinger of a destabilizing trade war on the horizon. And, as with the other cabinet appointees, it’s also a reminder that so long as Trump claims the mantle of economic populism, he’ll be a difficult man to stop.

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