Trump’s losing trade policy? A lot of Democratic candidates share his vision.
If you want to get a unanimous verdict from any gathering of economists, just ask them about Donald Trump’s trade policy. If it were a movie, its Rotten Tomatoes score would be zero. One expert analysis after another has torched it.
A report from the Becker Friedman Institute at the University of Chicago found his tariffs on washing machines cost consumers $1.5 billion, or more than $815,000 per U.S. job saved. A study for the National Bureau of Economic Research concluded that Trump’s trade war has reduced Americans’ real incomes by $1.4 billion per month.
The Tax Foundation says the new tariffs amount to a tax increase of $42 billion on Americans. A team of economists from the University of Chicago, Northwestern and Stanford estimate that tariffs and trade squabbles cut investment in U.S. manufacturing by 4.2 percent last year.
NBER notes that Trump’s tariff hikes “are unprecedented in the postWorld War II era in terms of breadth, magnitude and the sizes of the countries involved.”
They haven’t worked in the most basic sense. The overall trade deficit in goods, which he promised to eliminate, hit a record high last year, and the imbalance with China grew.
To the surprise of no economist, his policy of blocking trade, and threatening to do so, turns out to be bad for consumers, producers and the economy. So how are Democrats running for president handling the issue? By offering their own version of protectionism.
On Monday, Bernie Sanders attacked Joe Biden by saying, “I helped lead the fight against NAFTA; he voted for NAFTA.” Like Sanders, Elizabeth Warren opposed the Trans-Pacific Partnership, a mammoth free trade deal among the United States and 11 Pacific Rim nations. Both also oppose the administration’s modest revision of NAFTA, the United States-MexicoCanada Agreement.
The positions of Sanders and Warren, write Gary Clyde Hufbauer and Euijin Jung of the Peterson Institute for International Economics, “do not differ greatly from President Trump.” Among the other Democratic presidential candidates who opposed the TPP are Kamala Harris, Kirsten Gillibrand and Amy Klobuchar.
From all this you might forget that the Pacific free trade deal was the proud achievement of Barack Obama — and was described as “the gold standard in trade agreements” by Hillary Clinton. The idea, by the way, originated with Bill Clinton when he was in the White House. You might also forget that it was Clinton who signed NAFTA and Obama who preserved it.
Biden is so far holding firm. In
Free trade should be a good fit for a party that favors liberal immigration policies, friendly relations with our neighbors and constructive engagement with the world.
response to Sanders’ broadside, he said he didn’t regret voting for NAFTA. He’s a lonely voice. With the exception of Beto O’Rourke, the other Democrats who lean toward free trade, including Julian Castro, Jay Inslee and John Hickenlooper, are relative unknowns.
But if the presidential candidates would like to move toward protectionism, their voters are not going with them. A Pew Research Center poll last year found that among Democrats and Democratic-leaning voters, 67 percent think free trade agreements have been a good thing. Only 19 percent take an unfavorable view.
By contrast, Trump has managed to persuade a large share of Republicans to abandon their historic allegiance to open global commerce.
Pew found that 43 percent endorse free trade deals — down from 57 percent a decade ago. A plurality of Republican and Republican-leaning voters, 46 percent, now regard free trade as a bad thing.
Among the electorate as a whole, however, 56 percent favor free trade and 30 percent oppose it. With his belligerent and destructive trade war, Trump has actually dried up support for protectionism, except in his own party.
Why are so many Democratic candidates advocating policies that are a loser not only with the public in general but with their own party faithful? The harm done by Trump’s import barriers ought to work to the advantage of the opposition. But Democrats may end up with a nominee who, on the topic of trade, is largely indistinguishable from Trump.
At best, a Sanders, Warren or Klobuchar would be giving him a pass on one of his big vulnerabilities. At worst, they could force many moderate, independent voters to decide that on economic matters, Trump is the lesser of two evils.
Free trade should be a good fit for a party that favors liberal immigration policies, friendly relations with our neighbors and constructive engagement with the world.
Trump has done his best to hand Democrats a winning issue for 2020 and beyond. But that doesn’t mean they’ll take it.