How serious is Trump on trade?

The economic costs would make him back down

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I’ve written about each of Donald Trump’s campaigns for president in a professional capacity, and the biggest challenge each time is finding the right balance between conveying outrage and communicating reasoned information about policy. At a time when Trump is trafficking in straight up fascist rhetoric about immigrants “poisoning the blood” of America, it’s natural that outrage predominates. It’s also important to realize that one of the functions that this outrage serves for Trump is to crowd out coverage of what his actual policies would mean for America. But that coverage is important as well, even if it can seem like a deep dive into his trade policy risks treating him too much like a normal candidate rather than someone on trial for trying to overthrow American democracy.

Nevertheless, trade is one of Trump’s signature issues, and it’s also the one about which his campaign has released the most detailed information. Based on that information there are plenty of reasons to think that his trade policy would be very bad for America, and Trump-critical media ought to spell out those reasons as a public service to people who are considering voting for Trump because they think he has sensible ideas about trade. Modern American elections are decided by insanely thin margins and it would be irresponsible to give up any potential line of attack against the closest thing to an aspiring dictator the United States has ever seen.

Viewed in this context, a recent interview by Trump’s top trade advisor with The New York Times gives us a lot to think about. Robert Lighthizer made it clear that Trump will not only double down on the trade policies which he pursued in his first term, but will also dramatically expand them. Even if there are reasons to think that the more drastic ideas he spells out will never come to fruition, it’s clear that the Trump team plans to pursue a protectionist agenda which would have hugely damaging economic consequences. Both of these things - how bad the ideas are and how unlikely it is that most of them will ever be implemented - are important information for voters to consider.

From bad to worse

Despite Trump’s reputation as a “tariff man”, the story of his first-term trade policy is actually much more complicated. His campaign in 2016 was a seminal moment in modern American trade policy because it scared both parties out of advocating for new free trade deals and killed any chance of America participating in the Trans Pacific Partnership, a deal negotiated by the Obama administration that many people in both parties saw as key to containing the rise of China. But once Trump was in the Oval Office, his trade policy was fairly tame and directionless.

This pattern was typified by his approach to China, which he supposedly saw as America’s economic enemy number one. He slapped tariffs on both China and America’s allies at the same time, making it impossible to put together the sort of international coalition which would have been needed to do serious damage to Beijing. He also brought both tariff hawks and Wall Street bankers into his White House and could never seem to decide if he really wanted to get tough with China or not. He sunk years into fruitless negotiations with Beijing and then pretended to achieve a big breakthrough with the minor Phase One agreement in January 2020.

These policies harmed the U.S. economy to the tune of tens of billions of dollars, both by raising consumer prices and because of Chinese retaliation. To take one example, China slapped trade restrictions on the American soybean sector, and the Trump administration started paying out huge subsidies to keep the sector afloat. Over the course of the Trump administration, those subsidies added up to more than the U.S. government spends in a year on either shipbuilding or maintaining its nuclear forces. One of the benefits of America being a $26tn economy is that it can absorb bad policy choices like this without anyone really noticing, but that doesn’t make the policies any less bad.