Minnpost: On trade, Donald Trump sounds like a Democrat. But can Democrats trust him?
As president, Donald Trump has used his bully pulpit in expected ways — talking tough on topics like foreign relations, the travel ban, and repealing Obamacare.
Most Americans are familiar with those issues. But Trump has also rushed to use his outsized megaphone on issues few Americans know or care about: problems with U.S.-Canada dairy policy, the raw deal that the U.S. lumber sector is getting, the terrible things that are happening with steel.
To hear Trump tell it, these issues paint a larger picture of an America that’s been rendered inept on the global trade market, constantly being outfoxed by sharper negotiators in Mexico, Canada, China, and a host of other countries.
Trump’s fix? An “America First” trade policy that promises renegotiating deals like the North American Free Trade Agreement — and to burn them down if they turn out bad.
Like many other elements of the president’s agenda, achieving this vision to rework U.S. trade policy will be harder than it sounds. Unlike many elements of the president’s agenda, though, this enjoys broad support from Democrats.
Trump, along with leading Democrats, argue that free trade has ravaged blue-collar American communities, and that trade policy going forward should emphasize fair, not free, trade.
Odd-couple dynamics aside, you’d think Minnesota’s fair-trade Democrats would be working closely alongside Trump to get something done on a shared policy priority. Though Democrats cautiously like what Trump has to say on trade, they don’t trust the president at all. Is there any chance they join forces to remake American trade policy?
From the earliest days of his campaign, Trump understood that there was great appetite for a new kind of trade politics in the GOP’s working-class base. Touring industrial states ravaged by the flight of manufacturing jobs to Mexico and elsewhere, Trump the candidate railed against trade pacts and foreign competitors, receiving considerable support for it.
His nomination as the GOP standard-bearer represents a major shift in the contemporary Republican Party, which once enthusiastically led the charge for free trade. As president, Trump has elevated a group of tough-talking trade populists to carry out his agenda, and they have generally been spared the staunch Democratic opposition that’s come with the president’s other administration picks.
Among Democrats, a similar shift in trade politics has occurred. Despite its strong ties with organized labor, generally an opponent of free trade, Democratic leaders since the 1990s have largely touted free trade beliefs. Bill Clinton signed and supported NAFTA, while a key goal of Barack Obama’s second term was negotiating and approving the Trans-Pacific Partnership, an 11-nation free trade agreement.
Organized labor and the Democratic grassroots, though, organized heavily against TPP, helping shoot it down during Obama’s final years in office. Sen. Bernie Sanders’ insurgent presidential candidacy was fueled by anti-TPP, fair-trade rhetoric, and his success forced Hillary Clinton — who once praised TPP — to reverse her stance.
Some Democrats in Minnesota’s delegation have worked to move their party’s trade agenda in this direction. Sen. Al Franken was an outspoken opponent of TPP, 5th District Rep. Keith Ellison organized congressional opposition to TPP, and 8th District Rep. Rick Nolan has advocated strong protectionist measures to help the U.S. steel industry.
NAFTA on the table, or the chopping block?
With a group of Democrats open to Trump’s trade talking points, the president could plausibly earn bipartisan support on Capitol Hill for his trade agenda.
What does that agenda consist of? Though there remain some big questions, there are a few topics Trump has been consistent on as a candidate and as president — and NAFTA tops the list.
Trump has had a lot to say about the free trade pact between the U.S., Mexico, and Canada, which was made official in 1994. Over the years, he’s called it a “total disaster,” “catastrophic,” that there’s “never been a worse or dumber deal for trade,” and that it is “perhaps the greatest disaster trade deal in the history of the world.”
Though he once suggested he’d pull out of the pact altogether, Trump settled on renegotiating it for now, while holding over Mexico and Canada the threat of withdrawal if things don’t go well for the U.S. Most of Trump’s rhetoric has focused on Mexico, while the president says he only seeks minor changes with Canada.
On May 19, the newly confirmed U.S. Trade Representative, Robert Lighthizer, sent a letter to Congress notifying members of the administration’s intent to begin renegotiating NAFTA in 90 days, the first step in the formal process.
The administration appears to have a few priorities in reshaping NAFTA to better fit its beliefs. In his letter to Congress, Lighthizer argued that U.S. manufacturing has not seen the benefits of NAFTA, and said the administration will be looking at intellectual property rights, labor policy, environmental policy, customs procedures, and the competitive advantage of state-owned enterprises.
Trump claims that NAFTA devastated the U.S. manufacturing sector, though some experts calculate that the agreement has only directly led to the loss of around 100,000 U.S. manufacturing jobs to Mexico; others, however, have estimated those losses closer to one million. Beyond job loss, economists have observed that NAFTA has depressed wage growth for blue-collar workers in the U.S.
It’s unclear how a new NAFTA would privilege the U.S. manufacturing industry going forward, or promote better-paying jobs in working-class communities. Commerce Secretary Wilbur Ross wants to toughen the so-called “rules of origin” that govern which Canadian and Mexican products are eligible to enter the U.S. free of tariffs. Ross said in April that Chinese imports were coming into the U.S. via Mexico, hurting U.S. manufacturing.
Critics of the Trump administration’s case for manufacturing point to bigger-picture changes, like better technology and automation, that have led to the loss of millions of manufacturing jobs. (Indeed, according to the Brookings Institute, U.S. manufacturing shed six million jobs from 2000 to 2010, but total economic output increased by $800 billion.)
According to Robert Kudrle, an economics professor at the University of Minnesota, “the chances we can bring back a large number of manufacturing jobs we lost is simply fanciful… Politically, it’s catnip, but intellectually, it’s murky.”
Up to 85 percent of the jobs lost in the first decade of the 21st century, Kudrle says, are due to changes in technology that made manufacturing more efficient.
In general, the U.S., Canada, and Mexico all agree that NAFTA needs to be updated to reflect major technological shifts: it hasn’t been updated since 1994, and negotiators want to bring the agreement up to the speed for the Internet age.
An ironic wrinkle of all this, though, is that the Obama administration already did just that: as part of the negotiations for TPP, the U.S. renegotiated the framework for NAFTA with Canada and Mexico.
The hard-fought, years-long renegotiation, proponents said, maintained the U.S. competitive advantage while updating NAFTA, and it was agreed to by both Mexican and Canadian officials. In March, Politico Magazine reported that career trade staffers in Washington are frustrated at Trump’s calls to renegotiate NAFTA because they believe they already did it in TPP, which Trump officially killed.
Though NAFTA is the biggest item on Trump’s trade agenda so far, there are plenty of other things he has said he’ll take on, from negotiating new bilateral trade agreements to levying new tariffs or bringing trade court cases against countries that dump goods in the U.S.
Already, the administration made a deal with China that included opening up the Chinese market to more U.S. beef and opening the U.S. market to more Chinese poultry.
In April, Trump signed an executive order cracking down on the dumping of cheap steel into the U.S., widely considered a shot at China. Also in April, the White House increased a tariff on lumber coming to the U.S. from Canada, a move pursued after Canada blocked a way into their highly protected dairy market for U.S. dairy.
These moves have earned praise from Democrats. Indeed, at times, Trump has not sounded terribly different from Bernie Sanders on trade. But Democrats are quick to say that they will be pushing the president to apply what he’s said on trade to his concrete actions on trade.
Sen. Al Franken said as much in a statement after Trump’s denouncement of Canadian dairy policy. “I strongly urge the President to move beyond simply saying the right things,” he said.
Franken and Sen. Amy Klobuchar at least gave votes of confidence to the men tasked with executing Trump’s trade agenda. Both joined most of their Senate Democratic colleagues to confirm Lighthizer, Trump’s choice for trade representative; Klobuchar voted for Ross, the Commerce Secretary. (Lighthizer and Ross got 38 and 21 total Democratic votes, respectively.)
House Democrats sounded off on NAFTA, which many say failed to protect American jobs. Though they’d like to rework the trade deal, Democrats largely regarded Trump’s approach to trade policy with suspicion, at least for now.
After Trump’s first address to Congress in March — in which he blasted NAFTA and promised to bring back millions of jobs through fair trade policy — Rep. Nolan said in a statement that Trump “made some great promises to support fair trade… but the problem is we can’t believe him, because at one point or another he’s been on every side of every issue.”
Rep. Ellison said there are problems with NAFTA, but he isn’t sure that Trump is the right person to tackle those issues. “It’s 20 years old plus now, maybe it is a good time to review it,” Ellison said of NAFTA. “But the question is with what sort of focus will it be reviewed. I don’t trust Trump at all, but I can’t say that it’s inappropriate to take a look at NAFTA.”
Ellison promised that he’d be following the issue very closely. “I have my doubts, but I’m going to keep focused attention on it,” he said.
On NAFTA renegotiation, 4th District Rep. Betty McCollum said that “based on what I’ve seen in the Trump administration, with moving forward on oil leases and loosening regulations on pesticides and workers’ rights, I don’t have a lot of confidence that it would be a negotiation that would really protect American workers and really protect American families.”
The progressive grassroots, which worked so hard to kill TPP, has also been vexed by Trump’s stance on trade.
Kaela Berg, director of the Minnesota Fair Trade Coalition, recalled hearing Trump talk on trade early in the election. “I remember feeling really uncomfortable when Trump spoke about it because I was agreeing with what he was saying,” she said.
Like most progressives, Berg has no love for Trump. But, she said that progressives need to be appreciative if Trump helps usher in some of the trade policy changes they have long desired.
Like Ellison, however, she says Trump’s actions have failed to match his rhetoric, citing his reversal of a campaign promise to label China as a currency manipulator. Berg says that Trump will realize he needs to keep his promises to his Rust Belt base that ate up his message on trade. “My hope is he realizes how much he owes that base.”
What happens now?
So what authority do Democrats — stuck in the minority in both the House and Senate — really wield on trade? For administration decisions like tariffs on individual products, not much.
But any renegotiation of NAFTA, or any bilateral trade pact with another country, will need to pass through Congress on an up-or-down vote. Trump has so-called trade promotion authority, which means that Congress gets ample time to review trade agreements, but no power to amend them.
If Democrats are able to get past their reservations about Trump — and if his actions begin to match his rhetoric, in their eyes — they could plausibly work together to advance a shared agenda.
There’s also a big if on the other side of the aisle: whether congressional Republicans will hold to their traditional free trade stance or get in line with their party’s new de facto leader.
According to Claude Barfield, a trade expert at the right-leaning American Enterprise Institute think tank, the Republicans are a puzzle on trade. “What you don’t know is how much erosion Trump’s takeover of his party has meant,” he said, adding that top leaders like Speaker Paul Ryan are free trade backers, but rank-and-file members might face pressure to back Trump’s protectionist agenda.
“Some of these guys don’t want a negative tweet about trade aimed at them directly coming from the White House,” Barfield says.
A 2015 House vote to give Obama trade promotion authority was seen as a proxy for advancing TPP, and it’s a recent on-record reflection of congressional trade dynamics. The vast majority of Democrats — 85 percent of the caucus — voted against it, bucking Obama, while 80 percent of Republicans voted to advance it.
Perhaps, as Barfield suggested, more Republicans will join with Trump to advance an economic populist agenda on trade.
The U of M’s Kudrle notes that voters are “suffering from globalization fatigue… it does suggest that politicians are not going to get a very warm reception for more open trade.”
Still, there remain plenty of free traders in the GOP’s ranks who would face criticism for joining with Trump , like 3rd District Rep. Erik Paulsen, whose wealthy, corporate district is the kind of place where free trade ideas are still broadly popular.
In a vote to ratify a new NAFTA — which could happen as early as next year, depending on the pace of negotiation — Democratic votes could be crucial to its passage if enough free-trade Republicans don’t like what they see.
Ultimately, how it all shakes out — as it often does with trade — may simply depend on whose constituents are winners and losers.
For example, Rep. Collin Peterson, whose 7th District thrives on agriculture, will be watching closely. On balance, ag was a big winner in NAFTA, and the industry is wary of renegotiation rocking the boat.
In an April interview, Peterson didn’t say where he’s at on Trump and trade just yet. But he did offer some advice to explain who will line up where with NAFTA, and the other trade deals Trump wants to sign to make America great.
“It depends,” he said, “on whose ox is getting gored.”