Trump vs. Biden on Trade

By Matthew McMullan
Oct 22 2020 |
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Donald Trump has forced a re-examination of American trade policy. How would a Joe Biden administration respond?

President Trump is a longtime trade skeptic. He was buying newspaper ads about the devalued Japanese yen in the 1980s. I was 4 years old. Walk Like an Egyptian was the No. 1 song in America. It was a long time ago!

But even if much of Trump’s politics have changed over the years, his views on trade has been remarkably durable. The language in those newspaper ads is quite similar to what he’s been saying about America’s trading partners since he came down an escalator at Trump Tower in Manhattan to begin an improbable presidential campaign that ended with a shocking victory in the 2016 election.

Maybe we shouldn’t be that shocked anymore. A lot of things broke the right way for Trump four years ago when he upset Hillary Clinton – not least of all was her poorly run campaign in industrial battleground states – but Trump was able to just get over the top in them (and scoop up their electoral college votes) with a near-constant message of trade reform.

He has since governed as a trade reformer to mixed results. But his Democratic rival this time around, Joe Biden, is making sure not to repeat the baffling ignore-the-industrial-heartland mistake of 2016. Trade policy has been taken very seriously in 2020. So what are their campaigns saying about the subject with the election just days away?

Let’s start with the guy who’s been in charge the past couple of years.

President Trump is promising more of the same trade policy if re-elected. But more of the same, of course, is a radical departure from the policies of the years that preceded him. He started off with symbolic gestures – like when as president-elect he intervened to save jobs being offshored by an Indianapolis HVAC manufacturer to Mexico, managed to save a handful of them, took credit for saving all of them, and then berated the local union official for having the audacity to point that out.

Once in office he did something substantial: He picked a guy, Robert Lighthizer, to be his U.S. Trade Representative – a cabinet-level position – who, broadly speaking, shares the president’s appetite for “America First” trade reform but actually knows how trade policy works. It was a rare Trump move that earned praise from the left. The American Prospect wrote:

“There is an old saying that even a stopped clock is right twice a day. Lighthizer marks the rare case of Trump both stumbling into a better policy than that of his predecessors, and hiring the right person to carry it out.”

While Lighthizer got to work, President Trump cited a national security provision in American trade law to raise tariffs on steel imports, which were not well received by most but had their desired effect: They allowed domestic steel manufacturers to recover footing in a global market increasingly dominated by China.

Lighthizer, meanwhile, undertook a renegotiation of NAFTA that passed Congress with the votes of House Democrats who held out for (and won) stronger protections for American workers; has blocked appointments to an important court at the WTO that he argues works against US interests; and set out after the biggest fish of them all – an actual bilateral trade deal with China, a country with a huge, growing economy, and with whom the American bilateral goods deficit has increased every year since Washington helped it join the World Trade Organization (WTO) in 2001.

The Trump administration’s China trade effort officially began with a Section 301 report, unveiled by Lighthizer in the spring of 2018 as a detailed examination of the Chinese government’s trade abuses. With the report in hand the Trump administration raised tariffs on hundreds of billions of dollars of Chinese imports. China responded in kind, and negotiations soon commenced. Early this year the two sides signed an agreement – called “Phase One” because it’s by no means comprehensive – that kept most of the tariffs in place and effectively committed the Chinese side to increased purchases of American agricultural products like soybeans. China is currently not living up to those purchasing commitments.

Trump’s trade fight with China is big, sprawling, and uncompleted – and it was unlikely from the start to be wrapped up in the window of a four-year presidential term, despite putting an aggressive negotiator who’s good with details in charge of the talks. There are still huge issues to consider, like the substantial swaths of the Chinese economy that are effectively underwritten by the Chinese state. That’s just one example, but it’s kind of a fundamental one because it gets to the very heart to how China, soon to home to the world’s largest economy, manages its economy. How should those industries be treated when China has them competing directly with workers in private industry – not just in the United States, but around the world?

A potential “Phase Two” deal with China will have to be picked up in 2021, no matter who’s president. Speaking of which …

How about Joe Biden?

Joe Biden, as Trump pointed out in both of their face-to-face presidential campaign debates, has years of votes and policy positions that he should own. Since we’re talking about trade, Biden’s votes include a vote for NAFTA, permanent normalized trade relations with China, and support for the Trans-Pacific Partnership in his role in the Obama administration.

All of that has represented mainstream thinking on trade policy over the past few decades, and it has hardly been confined to the Democratic Party. Lots of Republicans voted this way, too. But the trade policy consensus is shifting, particularly when it comes to China. Some of that shift, obviously, is because of the guy currently in the White House. Some of that shift is from the progressive left that has railed against job-killing trade deals for decades. And so, even if he eschews Trump’s “America First” unilateralism and argues instead for easing off our traditional trade allies, Joe Biden is shifting on trade too. From the Wall Street Journal:

“I think there is a broad recognition in the Democratic Party that Trump was largely accurate in diagnosing China’s predatory practices,” says Kurt Campbell, the top Asia official in the Obama State Department, now a senior adviser to the Biden campaign.

A few months ago, Biden was asked in an interview if he’d roll back the tariffs the Trump administration has placed on Chinese imports. He criticized them, pointing out that the tariffs haven’t changed fundamental shifts to Chinese economic policies and American consumers have eaten the increased costs. But he didn’t say explicitly that he’d lift the tariffs, and a campaign spokesperson later said “he would re-evaluate the tariffs upon taking office.”

But not so fast, Kemosabe: Even though a President Biden would have a huge wall of Chinese tariffs and a “Phase One” trade deal dropped into his lap on his first day in office, he’s unlikely to embark on a feverish pace of trade reform similar to what Trump has done. That’s what he says, at least. Here’s what he said on a United Steelworkers candidate survey:

“I won’t enter into any new trade agreements until we’ve made major investments here at home, in our workers and our communities—equipping them to compete and win in the global economy. That includes investing in education, infrastructure and manufacturing here at home.”

This – infrastructure investment – is indeed a huge part of Biden’s economic recovery platform. And the platform pairs that investment with an enormous $400 billion Buy America commitment that would virtually guarantee any infrastructure program would be completed with domestically manufactured goods. He talked about it at the end of Thursday night’s debate with President Trump in Nashville:

So what’s the bottom line?

If you want something with a little more, uh, nuance, Biden’s probably your guy. If you want to stick with a bull-in-a-china-shop approach to trade reform, Trump is your man.

Both candidates have their faults. Biden is a longtime politician with a number of trade votes to his name that don’t look great in retrospect. Trump’s approach, on the other hand, has left the United States with fewer manufacturing jobs than when he took office (even when you account for the coronavirus recession) and a goods trade deficit last month that was a record high.