With Tuesday's announcement that he will nominate Robert Lighthizer to serve as the U.S. trade representative, President-elect Donald Trump is showing he means business on one of the issues that defined his presidential campaign.
Lighthizer, a lawyer and former ambassador in the Reagan administration, has decades of experience working to protect U.S. companies from what he describes as unfair foreign competition. Those who know him say that with his detailed knowledge of complex international agreements, Lighthizer could help Trump implement his agenda of restricting global commerce, with consequences for the economy that are difficult to predict.
Lighthizer could prove a formidable opponent for Republicans in the administration and Congress who support freer trade.
"He’s very smart and very quick — there’s no doubt about it — and he knows the trade law and also the politics of trade in Washington backward and forward," said Gary Hufbauer, an attorney at the Peterson Institute for International Economics who has written critically about Trump's protectionism.
In some respects, Lighthizer is a figure of the GOP establishment. Before President Ronald Reagan made him a deputy U.S. trade representative, he served as the chief of staff to the Senate Finance Committee, helping to enact conservative economic policies. He was an aide to Robert J. Dole, the former Republican presidential nominee and senator from Kansas, and he has spent decades representing corporate clients at Skadden, Arps, Slate, Meagher & Flom.
Lighthizer's views on trade, however, make him different from many other elite Republicans.
"I am fully committed to President-elect Trump’s mission to level the playing field for American workers and forge better trade policies which will benefit all Americans," he said in a statement Tuesday.
Many economists argue that freer trade enriches both importing and exporting nations, but Lighthizer dismissed those arguments as "ivory-tower theories that disregard the realities of everyday life" in a 2008 column in the New York Times.
In the column, Lighthizer seemed to suggest that U.S. diplomats should take a more confrontational approach to China and the World Trade Organization — two entities that might seek to punish the United States if Trump pursues some of the policies he has floated on the stump, such as punitive tariffs on imports.
Proponents "embrace unbridled free trade, even as it helps China become a superpower," Lighthizer wrote. "They see only bright lines, even when it means bowing to the whims of anti-American bureaucrats at the World Trade Organization."
That column did not reject free trade entirely, though. Lighthizer might support free-trade agreements as long as the United States can retaliate for abuses by foreign countries, suggested Alan Wolff, a former ambassador who is now senior counsel at Dentons.
Wolff said he and Lighthizer had worked together on a number of cases on behalf of U.S. clients who believed that foreign governments' policies put them at a disadvantage in international trade. Lighthizer's specialty has been representing U.S. steelmakers.
"The single most outstanding feature of Lighthizer is caring very deeply about the industrial base of the United States," said Wolff, who served as deputy trade representative under President Jimmy Carter. "He’ll do whatever he can with respect to trade policy to ensure that the industrial base is strengthened."
Wolff said that Lighthizer would negotiate effectively not only with foreign nations, but also with Congress. Rep. Paul D. Ryan, the speaker of the House, and other Republican lawmakers favor free trade, and Lighthizer's legislative experience could help him advocate for Trump's policies on Capitol Hill.
"Lighthizer will understand, having come from the Senate, that congressional support is imperative," Wolff said.
Despite Lighthizer's appointment and a series of forceful public statements from Trump since his election, investors on Wall Street have discounted the possibility of protracted diplomatic conflict over trade.
While most agree that the restrictions Trump has proposed could cause severe economic disruptions, investors are skeptical that the president-elect will deliver on his promises. That scenario is "a risk case, not the baseline," Joseph LaVorgna, the chief U.S. economist at Deutsche Bank, said in an interview last month.
LaVorgna is optimistic about prospects for the economy under Trump, and many on Wall Street appear to agree. Investors have bid up the price of stocks since Trump's election, perhaps looking forward to potentially trillions of dollars in tax relief for corporations and investors.
The Standard & Poor's 500-stock index is up 6 percent since Trump won, while the Dow Jones Industrial Average has flirted with the historic level of 20,000 points.
In recent weeks, currency traders have sold off the Chinese renminbi and the Mexican peso in anticipation of more limited trade between those countries and the United States. The renminbi was flat against the dollar on Tuesday. The price of the peso in dollars was down 1.8 percent, to 4.7 cents, but the decline seemed to be mainly a response to Ford Motor Co.'s cancellation of a $1.6 billion plant the automaker had planned to build in Mexico.