The stock market dive on Monday, May 13, following China’s announcement that it would impose retaliatory tariffs for President Donald Trump’s tariff hike on $200 billion in Chinese products, set off alarms around the globe. The business press warned that the trade war between the two countries could “spin out of control.”
Republicans worried that Trump’s trade war, resulting consumer price increases, and the pain born by U.S. farmers who could lose access to a lucrative export market, will hurt them politically in 2020—even if Trump remains popular with his long-suffering base. And Democratic consultants began to feel optimistic about peeling off Republican voters in the 2020 Senate race, The Hill reports.
But the politics of the current confrontation are complicated.
Take the long and flattering profile of Trump’s trade representative, Robert Lighthizer, by Robert Kuttner in the current issue The American Prospect.
“Unlike his last four predecessors as [United States Trade Representative], Lighthizer unabashedly embraces a salutary brand of nationalism,” writes Kuttner, a serious progressive thinker, founding editor of the Prospect, and author of Can Democracy Survive Global Capitalism?. “To use a very old-fashioned word, Lighthizer is a patriot, someone who truly cares about whether U.S. industry endures—and a far more serious man than his boss.”
Lighthizer is also the driving force behind Trump’s get-tough stance toward China.
Lighthizer has spent his career fighting China’s currency manipulation, its dumping of cheap products on the United States, its theft of intellectual property, and other predatory policies that have long gone unchecked by free traders in Democratic and Republican administrations alike, Kuttner points out.
While news coverage of the most recent collision between the U.S. and China focuses on the potential cost to farmers, Trump’s attacks on Clinton-era free trade deals resonated throughout the battleground states of the Midwest.
Progressive economist Jared Bernstein agrees. “For those of us who’ve long watched U.S./China negotiations, it looks like Robert E. Lighthizer [Trump’s lead negotiator] has pushed the Chinese further and harder than any of his predecessors,” Bernstein writes in The Washington Post. “Our negotiators’ theory, which may well be correct, is that they can’t force China to play fair without at least temporarily hurting U.S. consumers and producers.”
And while news coverage of the most recent collision between the U.S. and China focuses on the potential cost to farmers, Trump’s attacks on Clinton-era free trade deals resonated throughout the battleground states of the Midwest. Even among farmers who have been personally hurt by tariffs, there is a widespread feeling that Trump is driving toward an economy that reverses the race to the bottom they’ve suffered through in the globalized market.
“To be serious, a revised trade policy would need to be married to a series of industrial policies,” Kuttner cautions. “The goal should be not just to improve the trade balance but also to revive American industry and safeguard it from China’s improper grabs of market share via subsidies and dumping. Trump has done nothing on that front.”
A serious effort to revive American industry and address the crisis gripping former manufacturing centers and rural areas throughout the industrial Midwest is something neither Democrats nor Republicans—nor the mainstream press—has grappled with.
That’s part of the reason Trump’s actions look so wild. There is very little conversation about what an economic policy that would protect workers and farmers—as opposed to U.S. corporations and stockholders—might look like.
That disconnect was on display in an August 2018 Time magazine profile of Peter Navarro, a Democratic economist who became Trump’s policy advisor. Time reporter Molly Ball calls Navarro “the [Steven] Miller of economic policy, the voice in Trump’s ear that eggs him on against the experts.”
“How did Navarro, a Democrat whose philosophy was formed by environmentalism and anti-corporatism, become the man behind Trump’s trade war?” Ball asks.
After China joined the World Trade Organization (WTO) in 2001, Ball writes, Navarro “started to notice that his MBA students were losing their jobs despite their sterling qualifications. He concluded that China’s trade practices–including export and production subsidies, currency manipulation and theft of intellectual property–were putting Americans at an unfair disadvantage.”
“In other words,” Ball concludes, “Navarro seemed to see in China a scapegoat for people like himself: well-credentialed Americans denied access to the success they felt they’d earned.”
But maybe Navarro, who came from a working-class background and made it his personal cause for decades to fight greedy developers and tax-cutting Republicans, was correct that the United States’ trade relationship with China was bad for American workers, as both Kuttner and Bernstein seem to think.
Both Trump and Bernie Sanders gained a lot of support in the Midwest with their opposition to foreign trade deals, Ball acknowledges. She quotes a 2016 poll that showed 68 percent of Americans said they’d prefer an American factory that created 1,000 jobs to a Chinese-owned factory that created 2,000 jobs in their community.
But to show the depths of Navarro’s hypocrisy, Ball quotes his warning from the 1990s about the rise of former Republican governor of California Pete Wilson: “This man without core beliefs,” he wrote, “wants to cynically ride a tidal wave of white male rage and anti-immigrant fervor right down the Potomac and into the White House.”
The attack on Trump is fair enough. But his get-tough stance on China trade resonates with voters for a reason that goes beyond lack of education and racism. It has to do with working people’s frustrations about being on the losing end of deals that have jacked up corporate profits while leaving ordinary Americans scrambling to scratch out a living in an increasingly unequal economy. Democrats ignore that at their peril.