Trump has long seen previous US trade agreements as losers
President Donald Trump’s combative approach to trade
has been one of the main constants among his often-shifting political views.
And he’s showing no signs of backing off now, even as the stakes intensify with
the threat of a full-blown trade war between the world’s two biggest economies.
The president went after China on Day 1 of his
presidential bid, promising to “bring back our jobs from China, from Mexico,
from Japan, from so many places.”
Trump’s views on trade helped forge his path to
victory in states such as Pennsylvania, Michigan, Wisconsin and Ohio, where he
linked the loss of manufacturing jobs to the North America Free Trade Agreement
and other trade deals. He warned the worst was yet to come with President
Barack Obama’s proposed Trans-Pacific Partnership.
His trashing of existing and proposed trade agreements
grabbed the headlines, but he also made clear his view that globalization had
been bad for America and that he would use tariffs to protect national security
and domestic producers. He cited the nation’s Founding Fathers, Abraham Lincoln
and Ronald Reagan as leaders whose footsteps he was following when it came to
trade and tariffs.
“Our original Constitution did not even have an
income tax,” Trump told voters in Monessen, Pennsylvania, some four months before
the 2016 presidential election. “Instead, it had tariffs, emphasizing taxation
of foreign, not domestic production.”
No. 7 on his list of trade promises in that speech:
taking on China for “its theft of American trade secrets.”
“This is so easy. I love saying this. I will use
every lawful presidential power to remedy trade disputes, including the
application of tariffs consistent” with existing trade laws, Trump said.
Those laws include Section 232 of the Trade
Expansion Act, which Trump cited to enact tariffs on steel and aluminum imports
from China, Canada, Mexico and elsewhere.
They also include Section 301 of the Trade Act,
which Trump used last year to apply 25 percent tariffs on $50 billion worth of
Chinese goods and 10 percent tariffs on $200 billion of goods. That 10 percent
was increased to 25 percent on Friday. Trump is laying the groundwork to extend
the 25 percent tariff to all of China’s exports to the U.S.
“Such an easy way to avoid Tariffs? Make or produce
your goods and products in the good old USA. It’s very simple!” Trump tweeted
on Saturday.
Of course, America’s trading partners haven’t let
Trump’s tariffs stand without taking similar action themselves. Farmers, boat
makers and whiskey and wine producers are just some of the U.S. industries
caught in the middle.
“Farming is a very small margin, small profit
business. We rely on lots of volume and lots of sales to generate a profit,”
said Brent Bible, a soybean and corn farmer in Lafayette, Indiana, who has seen
prices for both commodities drop in the past year. “We are operating at a loss
now.”
Trump’s philosophy on some issues has evolved over
the years.
He once described himself regarding the abortion
issue as “very pro-choice.” Now, his administration promotes him as the most
“pro-life president in American history.”
On trade, not so much. In “Trump: The Art of the
Deal,” Trump complained of the Japanese that “what’s unfortunate is that for
decades now they have become wealthier in large measure by screwing the United
States with a self-serving trade policy that our political leaders have never
been able to fully understand or counteract.”
Fast-forward nearly three decades, and Trump
declared in his 2015 announcement for the presidency that other nations were
prospering at America’s expense. “When was the last time anybody saw us
beating, let’s say, China, in a trade deal? They kill us. I beat China all the
time,” Trump said.
Trump’s approach on trade is a dramatic departure
for the Republican Party, but GOP lawmakers have declined to take action that
would block his tariffs. They credit his tactics for getting improvements to a
trade deal with Canada and Mexico to replace NAFTA, and for getting China to
the negotiating table.
“President Trump is the first president to take
China head-on,” said Texas Rep. Kevin Brady, the top Republican on the House
Ways and Means Committee. He said “everyone knows I’m not a fan of tariffs, but
I think everyone knows as well that China has been cheating for far too long.”
Trump has received some encouragement from
Democratic leaders. Senate Minority Leader Chuck Schumer, D-N.Y., tweeted to
Trump: “Don’t back down. Strength is the only way to win with China.”
Current and former officials in the administration
believe that voters will give the president credit for standing up to China,
and not blame him for any pain that may result from the tariffs war.
Overall, AP VoteCast found Americans critical in
their assessments of Trump on trade. But that’s not the case with his
supporters. According to the survey of more than 115,000 midterm voters
nationwide, 45% approved of Trump on trade, while 53% disapproved. Among voters
who approved of Trump’s job overall, fully 88% approved of his handling of
trade.
While Trump casts his tariffs as being paid for by
China, they actually are paid by the American companies that bring a product
into the U.S. This can help some U.S. producers, though, because it makes their
goods more competitive price-wise. Still, the burden of Trump’s tariffs on
imports from China and other countries falls entirely on U.S. consumers and
businesses that buy imports, said a study in March by economists from the
Federal Reserve Bank of New York, Columbia University and Princeton University.
Republican-leaning business groups such as the U.S.
Chamber of Commerce have warned that the tariffs threaten to derail the economy
and low unemployment rates, but with economic growth at 3.2 percent last
quarter and the unemployment rate at 3.6 percent, Trump isn’t changing strategy
now.
“Tariffs will make our Country MUCH STRONGER, not
weaker. Just sit back and watch!” Trump tweeted on Friday.