Tariffs may be an issue that haunts Trump, Republicans
WASHINGTON — Is President Trump’s pitch to disgruntled manufacturing workers a leading political indicator, portending future trends, or a lagging one, appealing to a small and declining segment of the public? We may be about to find out, thanks to Trump’s controversial tariff plan.
Trump’s decision last week to levy duties on steel and aluminum imports from Europe, Canada and Mexico seems, oddly enough, to have become the choke point for many Republicans who had stomached far more outrageous Trump proposals on domestic and foreign policy. Business leaders who brushed off talk of a “trade war” now seem convinced that the threat to free trade is real.
Trump’s adversaries are some of the GOP’s most influential voices. Their sharp break with the White House suggests that despite two successful years for Trump’s populist insurgency in cultivating an angry base, the traditional Republican business consensus on trade isn’t dead yet.
Three foundations backed by conservative billionaires Charles and David Koch announced Monday that they would mount an advertising and lobbying “mobilization” to combat import tariffs. The Kochs are major financial backers of Republican candidates and causes, and one of their foundation executives said in announcing the initiative: “Trade is a major priority for our network.”
The Wall Street Journal last week accused Trump of starting “a needless trade war with America’s best friends.” The paper wrote in an editorial: “So much for Donald Trump as a genius deal-maker . ... He revealed he’s merely an old-fashioned protectionist.” The Journal warned that the steel and aluminum tariffs “will hurt the U.S. economy, his own foreign policy and perhaps Republicans in November.”
House Speaker Paul Ryan, not exactly a crusader since Trump was elected, also found his voice. “I disagree with this decision,” he said after the tariffs were announced last Thursday. “Today’s action targets America’s allies when we should be working with them.”
With the tariff fight, Trump and his critics are battling over an issue that, for more than a century, has helped shape the soul of the Republican Party. Ever since President William McKinley made the shift away from protectionism, Republicans have argued that trade means prosperity, and tariffs hurt business and workers.
Trump’s election undermined that traditional GOP view, as he mobilized angry blue-collar and Rust Belt voters to protest centrist trade policies. But how large and potent is Trump’s base on trade? The Kochs and other business conservatives have certainly enjoyed the power of the Trump insurgency, but they now seem convinced that through their “mobilization,” they can draw Republican voters away from outright protectionism.
With the midterm elections approaching, the tariff issue is partly a numbers game. How many prospective voters will be helped by protectionist policies, and how many will be hurt? A study released last week by the Peterson Institute for International Economics argues that if Trump moved to the next stage in his trade war, and levied a 25 percent duty on imports of automobiles, trucks and SUVs, the U.S. could lose 195,000 total jobs and 1.5 percent of the output of its auto and parts industries. Another Peterson Institute study last month argued that because of global supply chains, Trump’s tariffs could hurt American competitiveness and damage some industries.
These studies illustrate what economists have long argued — that in today’s global economy, protectionism is probably self-defeating. That’s not simply because other countries will retaliate with their own tariffs against our products — as Europe, Canada and Mexico have already promised they will do — but because the tariffs hurt more workers than they help. Protectionism saves yesterday’s jobs at the cost of tomorrow’s.
As the Kochs, the Wall Street Journal and Speaker Ryan try to bend the GOP back toward its free-trade roots, Democrats have a dilemma. They can try to outbid Trump in protectionist policies, hoping to carve off blue-collar votes in November. Or they can try to frame a genuinely progressive stance on trade, one that focuses on industries that are growing rather than shrinking.
The Democrats blew this chance in 2016. By joining in attacking the Trans-Pacific Partnership as a symbol of “bad” trade policies, Hillary Clinton ceded the ground to Trump’s insurgency. But in the end, that stance was a loser for her and the Democrats.
By imposing tariffs on America’s allies, in a showy attempt to stoke his base, Trump has given his opponents a big opportunity. It’s unfortunate that the politicians calling for sane trade policies are mostly Republican. The Democrats need to find their voice on tariffs, too — and start crafting a trade policy that’s about the future, not the past.