Trump’s hard-line views on trade were formed long before he targeted China with tariffs
President Donald Trump’s decision to slap China with additional tariffs, after hinting for weeks that a groundbreaking trade deal was near complete, shocked the markets — but it shouldn’t have.
Fueled by a deep-rooted nationalism and pride in his own skills as a dealmaker, Trump has wielded the threat of tariffs during his presidency as a key weapon for retaliation against countries he accuses of taking advantage of the U.S. But long before he took office, Trump was railing against what he deemed unfair trade through “globalist” deals like the North American Free Trade Agreement or the Trans-Pacific Partnership.
Most recently, the president threw into doubt ongoing trade negotiations with China by hiking tariffs on $200 billion in Chinese goods from 10% to 25% — a threat he issued last Sunday, even as a Chinese delegation prepared to travel to the U.S. for high-level trade talks that week.
Stock indexes see-sawed throughout the week as the drama unfolded. Hours after the tariffs were imposed, the self-described “tariff man ” president reaffirmed his belief that the taxes on imports “will make our Country MUCH STRONGER, not weaker.”
No deal emerged from the two days of negotiations in Washington, D.C. Treasury Secretary Steven Mnuchin said there were no further trade talks planned as of Friday afternoon.
But despite steady pushback from mainstream economists, many of whom claim that the U.S. economy’s recent gains have come in spite of tariffs, Trump’s populist rhetoric on trade represent perhaps his most consistent political stance and may be one of his strongest assets in what is expected to be a long and bitter reelection fight in 2020.
“The average American voter sympathizes with the idea that we’re getting taken to the cleaner by the Chinese,” said Robert Kuttner, co-editor of The American Prospect and a professor at Brandeis University’s Heller School.
The Trump trade
Trump’s views on trade, tariffs and multinational trade deals were set in stone long before he became president.
In the 1980s, Trump lambasted Japan for “taking advantage of” the U.S., along with other countries. He railed against the trade deficits the U.S. had amassed with Japan and other trade partners. “It’s time for us to end our vast deficits by making Japan, and others who can afford it, pay,” Trump wrote in an open letter “To The American People” that ran as a full-page newspaper ad in 1987.
During Japan’s economic boom in the ’80s, the U.S. became a major importer of the island nation’s cars and electronics, giving rise to a populist backlash.
Trump capitalized on that environment, watering the seeds of a fiercely competitive view of international relations that would later resonate with millions of working-class Americans who saw their industries and jobs dwindle amid globalization.
Trump’s depiction of the U.S. being ravaged by trade wasn’t all wrong. “Previous administrations had a kind of willfully naive view of protectionism that was being engaged in by other countries … and how it harms U.S. industry,” Kuttner said. “In that respect, Trump used trade as part of his general story about economic nationalism.”
As president, Trump has boasted about the advantages of protectionism. “Trade wars are good, and easy to win,” Trump tweeted in March 2018, as his administration dangled steel and aluminum tariffs. “When we are down $100 billion with a certain country and they get cute, don’t trade anymore – we win big. It’s easy!”
He had entertained the idea of a trade war with Japan, in nearly identical terms, in 1999. “Perhaps there has to be a trade war. It’s not going to last very long because Japan, if they don’t sell to this country, they go out of business, OK?” Trump said, The Wall Street Journal reported.
His song on trade remained largely the same through the next two decades, even as his other political views began to shift.
Years before he entered the race for the White House in 2016, Trump had been a registered Democrat who was pro-choice and had advocated for universal health care. By the time he became a presidential candidate, Trump had reversed all of that, re-branding himself as a Republican culture warrior while continuing to tout his business acumen.
That transformation never extended to trade, however — putting him at odds with Republicans on one of the sturdiest planks in its platform. But while Trump’s was one of the few Republican voices espousing protectionism, it was also the loudest.
“The Trans-Pacific Partnership is another disaster done and pushed by special interests who want to rape our country, just a continuing rape of our country,” Trump said of the 12-member trade pact in June 2016. The Trump administration later withdrew the U.S.′ signature from that deal.
NAFTA, which Trump had called “the worst trade deal ever,” has been renegotiated into a new trilateral deal with Canada and Mexico, known as the USMCA. With a few key distinctions, it leaves the original deal largely intact. The USMCA has not yet been approved by Congress with both parties calling for changes.
Trump has been accused of economic isolationism by critics who see his most radical comments as being altogether anti-trade.
At a rally in Florida on Wednesday, Trump tore into China, saying “We won’t back down until China stops cheating our workers and stealing our jobs.”
In “Fear,” the tell-all book about the Trump White House, author Bob Woodward reports that Trump edited a speech by writing, “Trade is Bad.”
“Though he never said it in a speech,” Woodward wrote, “he had finally found the summarizing phrase and truest expression of his protectionism, isolationism and fervent American nationalism.”
Trump, who now enjoys support from the vast majority of Republicans, appears to have catalyzed a huge shift away from the free-trade position that had been championed by the GOP for decades.
A March 2016 Pew Research poll, for instance, found that 53% of Republicans viewed free trade agreements as a “bad thing” for the U.S., compared with 34% of Democrats. Two-thirds of those Republican respondents who supported Trump agreed.
But some experts argue that, despite some tariffs and his relentlessly incendiary rhetoric, Trump hasn’t actually governed like that much of a protectionist.
Kuttner said Trump has shown his administration is not serious about some of the policies he’s previously touted, such as so-called Buy American and Hire American laws.
While his tariffs have “really managed to piss off the EU,” Kuttner argued that they are not large enough to significantly affect the overall economy or domestic politics. “It’s just not that big a deal” in those areas, he said.
Robert Scott, trade expert at the Economic Policy Institute, summed up Trump’s governance on trade more bluntly: “Smoke and mirrors,” he said, “and trade policy by press release.”