August 30, 2023

Of Trade and Tariffs

Donald Trump’s tough trade policies, especially those toward China, have shifted the way Americans think about how we do business internationally.

When we think of Donald Trump’s best hires, we naturally think first of Mike Pompeo. The former CIA director and secretary of state was smart, shrewd, and rock-steady, and he helped his boss achieve one foreign policy success after another.

Others that come to mind include Sarah Huckabee Sanders as press secretary, John Ratcliffe as director of national intelligence, Gen. John Kelly as chief of staff, and one lesser-known name that deserves more mention: Robert Lighthizer, Trump’s former trade representative.

Lighthizer and Pompeo were the instruments through which Donald Trump made China quake — Pompeo by calling the rest of the world’s attention to the menace of the Red Chinese, and Lighthizer by negotiating tough new trade conditions for the regime that had at the time built an annual trade imbalance with the U.S. of nearly $400 billion, and which in 2022 reached a record $951 billion.

“It’s hard to remember how we thought about China six years ago,” Lighthizer told the Washington Examiner recently, “but certainly the Obama administration and most Americans didn’t realize the extent to which they were a hostile force and a hostile adversary.”

Accordingly, Trump treated China as China treated us, with tariffs and countertariffs. As author and historian Victor Davis Hanson wrote in The Case for Trump, our 45th president “re-examined the asymmetrical trade relationship between Washington and Beijing” and “continued to hammer away at Chinese currency manipulation, technological appropriation, patent and copyright infringement, dumping, systemic espionage, and massive trade imbalances.”

In short, Trump treated China in a way no American president had previously. It’s no wonder, then, that President Xi Jinping and his henchmen were reaching for the Maalox in Beijing on November 3, 2020, when it looked like Donald Trump would win reelection, and then popping the champagne corks when it became clear that their bought-and-paid-for toady, Joe Biden, would supplant Trump in the White House.

Trump’s trade policies deserve closer examination this campaign season, and although the issue of trade wasn’t covered in last week’s GOP debate, we expect his fellow Republican presidential candidates to be questioned about their own policy prescriptions going forward. Trump, of course, is for fair trade rather than free trade, a sort of reverse Golden Rule approach to trade: You slap tariffs on our goods, and we’ll slap tariffs on your goods.

Elsewhere, The Wall Street Journal’s editorial page has its own position on trade — a morally relativistic position that doesn’t seem to believe in reciprocity nor vigorously demand fair play from our nation’s trading partners and is therefore aligned with traditional “free trade” Republicans and chamber-of-commerce types.

In a recent piece with a hyperbolic headline, “Trump Courts a Global Trade War,” the Journal’s editors wrote, “His leading message for a second term these days is that Americans should be prepared to pay more for all kinds of goods because he plans to impose a 10% tariff on all foreign goods sold in America.”

The Journal then quotes Trump from a GOP dinner earlier this month: “To bring tens of thousands more manufacturing jobs back to South Carolina, I will impose a border tariff on all foreign-made goods. So if they want to sell into our country and if they want to take our jobs by doing that, we’re going to have a tax that’s going to be a ‘privilege’ tax.”

It would’ve been helpful to see some additional context here, or perhaps a link to a transcript, but the Journal didn’t provide one. All we know is Trump is fixing to start “a global trade war.”

The Journal’s editors went on to make the case for why tariffs don’t work — how they ultimately cost the American consumer and cost manufacturing jobs. And they attributed the growth in manufacturing jobs during the Trump administration prior to COVID not to the then-president’s tough trade policies but to his corporate tax cut and deregulatory policies.

As for Lighthizer, 75, he recently published a book titled No Trade Is Free: Changing Course, Taking on China, and Helping America’s Workers. He also senses that Trump’s position on trade is “the new normal.” As the Washington Examiner continues, Lighthizer thinks “the tectonic shift in trade policy spurred on by former President Donald Trump, including a preference for tariffs and increased protectionism, has become the main direction of the GOP and will remain that way heading into the 2024 elections.”

Lighthizer continued: “The bottom line is the Republican Party, if it wasn’t apparent it is now, is the party of working people. The party of big banks and big businesses is the Democratic Party.”

The Democrat Party is indeed the party of big banks and big businesses. But what about its position on trade? Here, we’d call your attention to an interesting phenomenon from the 2020 campaign that didn’t get a lot of coverage: The Democrats, from Joe Biden on down, were largely silent about Trump’s tough-on-China trade policies. They were critical of most everything else Trump did, but not trade.

This indicates that fair trade, as opposed to free trade, has crossover appeal among the American electorate — and that Donald Trump has a far better sense of the mindset of everyday Americans than The Wall Street Journal does.

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