The Washington PostDemocracy Dies in Darkness

Donald Trump’s ‘dumb market’ position on trade breaks with decades of Republican views

Donald J. Trump (Jabin Botsford/The Washington Post)

It is the stated goal of the Republican Party, as articulated in platform document created for the 2016 convention, that "international trade is crucial for all sectors of America's economy."

"We envision a worldwide multilateral agreement among nations committed to the principles of open markets, what has been called a 'Reagan Economic Zone,' in which free trade will truly be fair trade for all concerned," it reads.

At that same convention, the Republicans nominated Donald Trump to be their presidential nominee. In November, he won that race. And in December, in an interview with Fox News' Chris Wallace, he said this when asked about getting on the phone with business leaders to convince them not to leave the country.

DONALD TRUMP: I don't have to do it myself. I have great people. We have top, top smart people. But it's so easy to do and we're going to have to impose a major tax on companies that leave, build their product and think they're going to sell it right through our border like we're a bunch of jerks.
CHRIS WALLACE: But what about the free market, sir?
TRUMP: That is--that's not free market when they go out and they move and they sell back into our country.
WALLACE: But that's the free market. They made a decision and it makes —
TRUMP: No. That's — that’s the dumb market, okay? That's the dumb market. I'm a big free trader, but it has to be fair.

The "major tax" to which Trump refers is his proposal to impose a 35 percent tariff on products that are made overseas after having once been made in the U.S., which are then sold here. (If you're curious how that would affect your pocketbook, we made a tool that will show you.) But it's the ensuing comments that are remarkable.

The idea of free trade across borders has been a staple of Republican politics for decades. In 1980 -- the year the party nominated Ronald Reagan -- the party's platform repeatedly mentioned the need for fair trade. "The Republican Party believes in free trade," the platform of Reagan read, "and we will insist that our trade policy be based on the principles of reciprocity and equity."

In 2000, the platform was even more effusive. "For American producers and consumers alike, the benefits of free trade are already enormous," the platform read that year. "In the near future, they will be incalculable."

One might view the 1980 qualifier -- "based on the principles of reciprocity and equity" -- as supporting Trump's argument to Wallace. But that's a description of the effects of unbalanced trade stipulations, like tariffs applied on one side, not the other. "We oppose subsidies, tariff and non-tariff barriers that unfairly restrict access of American products to foreign markets," it continues. "We will not stand idly by as the jobs of millions of Americans in domestic industries, such as automobiles, textiles, steel, and electronics are jeopardized and lost."

The primary reason that products are manufactured overseas is that labor costs are lower. Even if American-made products have equal access to foreign markets, there still exists a strong incentive for products to be made in places where production costs far less. Companies producing products where they want and selling them where they want is, as Wallace notes, the heart and soul of "free trade."

None of which is to say that there isn't political will behind Trump's description of the problem. His antipathy to trade agreements was a large part of his appeal; that he overperformed in states that had been more heavily affected by manufacturing losses is likely not a coincidence. Someone like Bernie Sanders, who offered similar skepticism about these trade policies, is less encumbered by this conflict in part because the party he sought to represent takes a different tack on the subject (usually calling for worker and environmental protections in agreements).

It's also not clear how Trump's anti-free-trade position will exist within the broader context of his administration. His Cabinet picks to date are heavily stocked with veterans of the business and finance communities, which usually overlaps with strong support for free trade principles. His rumored pick for Secretary of State is the current CEO of ExxonMobil, a company which (and person who) supports the concept.

Trump may want to strong-arm businesses into staying, but on a day-to-day basis, he's building a team that's much more likely to adhere to the Republican platform than to the Republican president.

Here’s a look at Trump’s administration so far

Dr. Scott Gottlieb is seen in this American Enterprise Institute photo released in Washington, DC, U.S., March 10, 2017. Courtesy The American Enterprise Institute/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY. NO RESALES. NO ARCHIVE. (Handout/Reuters)