Though it took a long time for some folks to figure it out, it has become conventional wisdom that President Trump’s disastrous trade wars have made him deeply vulnerable to challenge on one of his signature issues.
The question, though, is how exactly to go after him on the issue. And as each Democratic candidate rolls out his or her trade plan, implicit within it is an answer to that question — and each answer stands as its own form of rebuke to Trump and his nationalist worldview.
Now, it’s Beto O’Rourke’s turn. The former Texas congressman just rolled out his trade agenda, and his answer is basically not just that trade wars are bad, but also that we should make an affirmative case for international trade as something that can be managed so working people enjoy its benefits.
That might not sound too surprising, since O’Rourke is sometimes associated with the “free trade” wing of the Democratic Party, having supported the North American Free Trade Agreement and the failed Trans-Pacific Partnership. But, nonetheless, O’Rourke isn’t necessarily embracing a “free” trade position here — he has moved along with the Democratic Party to the left.
O’Rourke hasn’t adopted an approach that is as progressive as that of Sen. Elizabeth Warren (D-Mass.), but he now opposes the new renegotiated NAFTA and is calling for more robust protections for labor and the environment than is historically associated with the party’s more moderate wing.
O’Rourke’s trade plan has four main components:
First, as president, O’Rourke would immediately end the trade war with China by suspending all of Trump’s tariffs on day one. Though Trump’s trade war is a full-blown disaster, this actually isn’t a no-brainer, because it could expose O’Rourke to attacks to the effect that he’s “soft” on China.
But O’Rourke’s trade plan forthrightly declares that ending the trade war would be a good thing for the United States. “In exchange, China would revoke its retaliatory tariffs on American products like soybeans, beef, cars, and planes," the plan notes.
As O’Rourke’s plan sensibly points out, Trump’s tariffs have provoked retaliatory tariffs which are closing off a big market for U.S. exporters — particularly in agriculture — but without gaining the changes from China that Trump wants. So it’s time to rethink matters, but this doesn’t necessarily mean doing nothing in regard to China.
Second, O’Rourke would lead an international coalition against unfair Chinese trade practices. This is the sweet spot for those who want to end the trade war with China, but also want to do something about the Chinese trade practices that are unfair, which O’Rourke denotes as “currency manipulation, subsidies, restrictions on market access, corporate espionage and other strategies."
This posture criticizes Trump’s penchant for one-on-one trade wars between the United States and other countries — a hallmark of Trump’s “America First” nationalism, which sees trade wars as an opportunity for the United States to get its way, however Trump defines it, by employing direct U.S. dominance — and opts instead for an international approach, of the kind that Trump is impatient with.
This includes things such as rallying allies to be prepared to use “countervailing duties” to support sectors that are hurt in competition with industries subsidized by Beijing. These would be much more targeted than Trump’s sweeping tariffs, in effect calling for surgical strikes where Trump has tried to use overwhelming firepower, leading us into disaster.
O’Rourke also proposes getting serious about currency manipulation, by beefing up research into how to detect it, which is often difficult, and modernizing the World Trade Organization, though that’s easier said than done.
Third, O’Rourke sets a template for higher labor and environmental standards in trade deals. This is at the core of the emerging progressive trade agenda. It allows for trade deals, but calls for much more robust labor and environmental standards for participants to follow — and for much stricter enforcement mechanisms — than in previous ones.
Similarly, O’Rourke pledges not to join any trade agreements that have mechanisms that empower international corporations to resist government regulations or which lock in long patent protections for pharmaceutical companies — targets of progressive anger in the past.
That O’Rourke is embracing these positions shows that it is now far more difficult for national Democratic candidates to accept trade deals that fudge on these points. Indeed, all of Democratic presidential candidates — O’Rourke included — have come out against Trump’s renegotiated NAFTA on many of these grounds.
Fourth, O’Rourke would boost funding for displaced workers and for subsidizing smaller manufacturers to compete in international markets. This has some overlap with Warren’s approach, and as Bloomberg’s Noah Smith explains, it makes sense as policy: Even in rich countries, some companies need a nudge in the direction of trying to compete globally (rather than merely relying on U.S. markets — which has numerous beneficial effects). The idea is to give this to smaller companies, not just big ones.
Jared Bernstein, a progressive economist who has looked at the plans from O’Rourke’s campaign and those of other Democrats, told me that O’Rourke’s approach overall treats international trade flows as a potentially positive force, if they are harnessed for the broader public good.
“This is managing trade so that its benefits flow to a much more broad set of people,” Bernstein said. He added that O’Rourke’s implicit argument against Trump, and Trumpism, is that we actually can “manage the outcomes of international trade to benefit working people far more than we have in the past.”
“Trade flows are good, and the more of them, the better,” Bernstein continued, in explaining the core ideas underlying O’Rourke’s approach — provided that those trade flows are no longer managed to channel their benefits to corporations, but rather to workers.
By contrast, Bernstein noted, Trump’s approach targets trade flows as a bad thing, rather than trying to improve the “distribution of trade’s benefits.”
Given O’Rourke’s past, some trade progressives might naturally be wary of his instincts. But the concrete plan that he has embraced shows that the Democratic Party as a whole has moved left on this issue, and that aspiring national candidates can no longer buck this trend.