President Donald Trump’s multi-front trade war on the global stage has opened two distinct political battles over tariffs in the domestic arena that will shape the future of U.S. trade policy: in his race for reelection, and in the coming reckoning in Congress on his legislative priority, a renegotiated NAFTA.
The new politics of trade is scrambling traditional party alignments in a fashion unseen in modern American history.
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A new episode of POLITICO’s Global Translations podcast detailed how far Trumpism has pried Republicans away from their free-trade orthodoxy — a gambit that comes to a head next month. Meanwhile, the 2020 presidential primary is pushing Democrats toward a far more confrontational position with China compared with the stances of the Obama and Clinton administrations.
“I think there are two totally separate discussions going on,” said Lori Wallach, a trade specialist at Public Citizen, a consumer advocacy group, who’s been in these battles for decades. “There’s China, and there’s everything else.”
Within the 2020 presidential race, Trump’s campaign believes he can beat the Democratic field by standing up as the fiercest defender of American interests against the economic and strategic threats from China. Reprising his 2016 argument that past political leaders — including the Obama administration and Democratic front-runner Joe Biden — reacted too timidly while Beijing spent decades flouting international rules, Trump is eager to show he made good on his promise to stand up to China through the volley of tariffs he has imposed — and the threat of more.
But the president’s fearless — or reckless — enthusiasm for tariffs as a weapon has sparked a second battle: within his own party and in the halls of Congress where the passage of the new U.S.-Mexico-Canada Agreement now hangs in the balance due to Trump’s threats of tariffs against allies.
Earlier this year, Senate Republicans made clear that the North American deal could not proceed until Trump’s tariffs were removed from Canadian and Mexican steel and aluminum. But no sooner had Trump relented, than he threatened new tariffs on Mexican products as a way to pressure Mexico on migration policy. Republican senators mounted unprecedented pushback against his plans and have made clear that any additional tariffs could block the agreement. While House Republicans have been more supportive of Trump — and face primary contests in which GOP voters demand loyalty to Trump — Republican senators who don’t necessarily face reelection in this cycle, including Ted Cruz (R-Texas), are becoming more vocal.
Meanwhile, the clock is ticking. House Speaker Nancy Pelosi (D-Calif.) has not yet decided to bring the agreement up for a vote — and the clock is ticking with summer recess approaching. If not passed before the August recess, the deal could be swept away by congressional priorities such as raising the debt ceiling — and then will give way to campaign season.
“I surely hope that he has learned from history that lower tariffs are good,” said Chuck Grassley, the Republican senator from Iowa who chairs the Senate Finance Committee and made the lifting of steel tariffs a precondition for passage of the USMCA.
Whether the president believes tariffs are an end to themselves is not clear. Said Grassley, “I have heard him say something along this line that leads me to believe that he wants lower tariffs. … ‘What do you mean you don’t want a trade war? We’ve had a trade war and we lost.’ So he wants to do something about that.”
But while he’s under pressure in Congress on tariffs against allies, when it comes to China, it’s a different story. Trump’s confrontation with China is being matched by muscular rhetoric from progressive Democratic hopefuls like Bernie Sanders and Elizabeth Warren. They — like Trump — see an opportunity to paint Biden as too weak and complacent about taking on the many economic and security threats they perceive as emanating from Beijing.
In a campaign ad, Sanders touts his votes against NAFTA, the Central America Free Trade Agreement and China’s entry into the WTO. “We need trade policies in this country that benefit the working people of the United States and not just the CEOs of large corporations,” Sanders says in the ad.
Sanders has also criticized Biden, saying,“Joe voted for NAFTA and permanent normal trade relations, trade agreements with China. I helped — led the effort against that. I don’t think there’s much question about who’s more progressive.”
While Biden makes the case that constructive engagement with China is in America’s interest, Warren has come out with a platform she calls “economic patriotism” that also plays up the problem of China. “The Chinese are bad actors on trade. That means that our best way to fight back is with strength and with a coherent plan,” she said.
The emerging dynamic involves campaigns taking even harder lines on China, urged on by influential voices on the left — raising the possibility of a broader shift in American attitudes that could outlive the Trump administration.
“I also support the use of tariffs against the Chinese because they have so willfully and blatantly violated all norms of international trade, and they continue to do that — whether it’s currency manipulation, whether it’s stealing of intellectual property rights, or anything of that sort,” said Richard Trumka, president of the AFL-CIO.
However, like Republican senators, Trumka opposed the use of tariffs against Mexico and Canada.
“Tariffs are a legitimate form of an economic weapon or a trade weapon. They are legitimate if used properly, but they should be used like a rifle shot. You use them when someone is violating an agreement, and you use it to correct that action or to stop that action,” he said. “It’s not to be used as a shotgun, where you just shoot it out there and it hits everywhere.”
Since Mexico and Canada did not violate the terms of the North American Free Trade Agreement, he said, “there shouldn’t have been tariffs imposed on them.”
Many Republicans recognize Trump will need the support of America’s allies to be successful in the confrontation with China.
Grassley said it was a mistake to walk away from the Trans-Pacific Partnership trade deal in 2017, but he is heartened that U.S. allies like Canada, Japan, and those in Europe are a “united front” against China, because they’re all facing the same challenge.
“They may not like the specific tactics the president’s using,” Grassley said. “But they know that his heart is in the right place of getting China to live by the international rules of trade.”