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Opinion Why it will be so hard to roll back Trump’s trade agenda

A container ship passes the Golden Gate Bridge in San Francisco. (Eric Risberg/AP)

Global trade is not the sexiest of issues. It is, however, one of the most important, both in regard to U.S. foreign relations and America’s domestic cohesion. It is also a policy arena that former president Donald Trump changed in ways that will be hard to roll back.

The United States was known as a proponent of global free trade prior to Trump’s ascension. A bipartisan commitment to reducing global trade barriers pushed trade among nations to record heights. The North American Free Trade Agreement (NAFTA) and its Central American counterpart, the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), opened U.S. markets to low-cost imports from nearby countries. The World Trade Organization pushed adherence to the “Washington Consensus” — which included liberalized trade and investment and floating currencies — as a price of admission. China’s admission to the WTO extended the American free-trade religion to the world’s most populous nation. We were promised it would result in peace, prosperity and democracy for all.

That didn’t happen. In the developed world, the investor and educated classes boomed, as they could use their financial or human capital to export their services to the developing world. Workers in the countries that received this investment gained, and extreme global poverty plummeted as a result. Less-skilled workers in the developed world, however, did not gain much and in some cases even fell behind. As their jobs went to cheaper labor, through outsourcing or through domestic competition from migrants who were willing to work for much less, they came to believe the system no longer worked for them.

Trump owes much of his rise to this discontent. He had campaigned on reversing the free-trade regime and came into office intent on delivering. And despite his many poor personnel decisions, Trump struck gold with his pick for trade representative. Robert Lighthizer stayed in the position for the entire four years. His deep knowledge of trade law and political savvy allowed him to push the United States away from its worship of the free-trade catechism and toward an approach that placed American workers and national security first.

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Lighthizer provided insight into what he and Trump accomplished in an interview on Tuesday with Oren Cass of American Compass. Contrary to what his critics contend, Trump did not intend to return to a 19th-century protectionist regime in which the United States would purportedly prosper while tariff walls protected it from global competition. The point was to replace the postwar consensus, which fetishized consumer preference and used access to U.S. markets to subsidize economic development among European and Asian allies. Instead, Lighthizer explained, every decision was “made based on how it’s going to affect working people, how it’s going to bring manufacturing jobs back to the United States, how it’s going to put pressure on wages.”

That policy worked. The country gained more than half a million manufacturing jobs between Trump’s election and the onset of the pandemic. Wages and incomes went up for all, but especially quickly for those at the lower end of the wage scale. The replacement of NAFTA with the United States-Mexico-Canada Agreement also baked future gains into the cake. Lighthizer said that the new pact’s requirements concerning how much of a car had to be manufactured in North America to qualify for preferential treatment is leading to new investment in automobile manufacturing within the United States. Those jobs won’t appear until the plants are built, but when they are complete, thousands of Americans will work at good-paying jobs.

Lighthizer also highlighted how Trump changed views toward China. Before Trump, the United States and its allies largely accommodated China’s rise. The Obama administration’s “pivot to Asia” and negotiation of the Trans-Pacific Partnership were both insufficient and would have merely shifted some investment from China to other low-cost Asian countries. American workers would still have suffered, and U.S. supply lines would have still been subject to Chinese disruption in case of conflict. Trump’s open confrontation with China — through his tariffs, his efforts to engage allies in resisting Chinese investment and his military buildup — made it impossible to turn a blind eye to how global trade fueled Communist China’s growing power.

President Biden has so far sought merely to amend Trump’s doctrines rather than to return to the pre-Trump past. His “buy American” policies could deepen the Trump doctrine by putting the federal government’s purchasing power firmly behind building U.S. jobs. The attendance of Taiwan’s de facto ambassador at the inauguration, a first since the United States broke formal ties with the island nation in 1979, sent a clear signal that Biden was not retreating wholesale from Trump’s shift. It’s still early, but it looks as though Biden’s approach to trade and China will be to put a velvet glove on Trump’s iron fist.

The United States’ global leadership rests on its domestic cohesion and its ability to build items needed for national defense at or close to home. The Trump-Lighthizer trade policy wrenched the country toward that realization. We’ll all be better off if Biden continues down that same path.

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