PRESIDENT TRUMP rode blanket condemnation of the postwar American consensus on trade to the White House. Only wealthy U.S. elites and their overseas partners, he told the public, have enjoyed the fruits of multilateral tariff-reducing deals, whereas middle-class Americans have known nothing but job loss and community dislocation.
The president is trying to create a turning point in the country’s economic relations with the world, after which he will put “America first,” and the purported globalist rip-off of the middle class will end. This is the common theme of seemingly disparate trade disputes that are set to play out in 2018: pending bids for protective tariffs from U.S. producers of steel, aluminum, washing machines and solar panels; renegotiation of the North American Free Trade Agreement with Canada and Mexico and of the U.S.-Korea Free Trade Agreement; the struggle with China over pirated intellectual property and other issues.
We hope and expect the president will fail.
Our hope that he will fail is not based on a belief that the postwar trading system has proved an unmitigated success. To the contrary, job loss due to imports, especially those from China, brought pain to specific industries and areas, the deleterious social and political repercussions of which include Mr. Trump’s victory. Broadly speaking, though, increasingly free trade over the past 70-plus years has brought tremendous benefits both to the hundreds of millions lifted out of poverty in Asia, Africa and Latin America and to Americans who have enjoyed a wider choice of quality products, at lower cost, and high wages in export industries. Also of value, tangible and intangible, to the United States was the leadership of a world with less interstate violent conflict of the kind fueled by the pre-World War II international economic system.
Our expectation of failure is based on the sheer difficulty of the task Mr. Trump has set himself. Even if NAFTA and other long-standing arrangements were bad ideas in hindsight, they represent the status quo on which vast investments depend, and which cannot be abruptly abandoned without all sorts of harm to various interests, including many that are crucial to Mr. Trump’s political fortunes. Agribusiness, for example, is concentrated in states that Mr. Trump carried and depends heavily on exports to Mexico. Politically, reimposing protectionism is no easier than removing it: Both activate practically every contentious lobby in Washington. As James Madison wrote: “It is in vain to say that enlightened statesmen will be able to adjust these clashing interests, and render them all subservient to the public good.” Mr. Trump’s attempts to keep everyone happy — from Wisconsin dairy farmers to Whirlpool Corp. — prove Madison’s point.
The promise of free trade, admittedly never fully realized, is to allocate the world’s resources according to objective economic criteria as opposed to interest-group politics. China’s stubborn adherence to mercantilism threatens that vision; Mr. Trump and other critics of Beijing’s policies are right to focus on it. What would be wrong, and self-defeating, however, would be to abandon global leadership in frustration over China’s violations, a path Mr. Trump has started down by scrapping the Trans-Pacific Partnership. That agreement represented an attempted 21st-century adaptation of the postwar, U.S.-led trade regime. Improvements in that regime are necessary, to be sure; its destruction would be not only very harmful but also, as we hope Mr. Trump soon finds, exceedingly difficult to achieve.