While California isn’t Trump country, Californians may find a curious silver lining in the president’s recent actions on trade, particularly with China. In part, that’s because the trade issue doesn’t cut cleanly down party lines. Most of California’s Democratic delegation is ostensibly with the president on trade — and they share his opposition to free trade agreements. Senate Minority Leader Chuck Schumer, D-New York, recently said that he supports President Trump’s trade policies more than he supported President Obama’s.
Op-ed originally appeared in the Los Angeles Daily News on May 13, 2018
Trade matters because it profoundly impacts America’s manufacturing sector. California residents might be surprised to learn that their state is home to the nation’s largest manufacturing base, including a whopping 1.3 million manufacturing workers. These manufacturing jobs tend to pay good, middle-class wages — something that’s particularly important for Los Angeles, which is still the nation’s single largest manufacturing hub.
America has lost 5 million manufacturing jobs since 2000, including 520,000 in California alone. Such striking job loss isn’t a random occurrence, though. For more than two decades, the United States has been grappling with increasingly unfair and predatory trade practices from China and other nations.
For its part, Beijing has spent the past 25 years undervaluing its currency to make Chinese exports less expensive in the U.S. market. China has also funneled many billions of dollars to state-owned enterprises, boosting production of strategic commodities like steel, glass, rubber and paper. Not to be outdone, Japan, China and South Korea have also relied on similar systems of tariffs, currency manipulation and industrial subsidies to boost their respective manufacturing sectors.
It’s not just subsidies and currency manipulation, however. China has also dumped steel and other industrial goods in the U.S. market at below the cost of production. And Beijing has also moved on to advanced products like solar panels, semiconductors and aerospace — with Chinese firms happily stealing technology from American companies.
In response to such predatory trade, the Bush and Obama administrations spent a combined 16 years engaged in lengthy dialogues with China. They hoped that diplomatic engagement would convince Beijing to respect its World Trade Organization obligations and stop gaming the global marketplace. Dialogue failed miserably.
Despite the ineffectiveness of the long-standing diplomatic talks, many reporters, economists and elected officials continue to recommend it. These same pundits now speculate about dire harm as President Trump finally responds to China’s aggressive trade violations.
In January, the president confronted China’s massive subsidization of its solar industry by imposing tariffs on solar panel imports. Commentators quickly predicted the death of America’s domestic solar installation industry. Instead, 10 companies are now investing in U.S. solar panel production, and solar installations continue to rise. In March, the president imposed tariffs on steel and aluminum imports to address extraordinary overproduction by China’s government-owned steel mills. Again, news programs reacted with dismay. But aluminum prices are down 4 percent, steel prices are stabilizing and steel industry business is up.
Also, in March, the president took action against China’s long-standing theft of U.S. technology and intellectual property. He started a process to impose tariffs on $50 billion of goods manufactured through stolen technology. Pundits belatedly agreed that China has been a bad actor — but they again argued against meaningful action. In response, however, Beijing threatened retaliation, prompting President Trump to respond with the possibility of another $100 billion in tariffs on imports from mostly government-owned companies in China.
All of this follows what President Trump promised in the 2016 election — that he would fix trade cheating and address the “China threat.” He wasn’t alone in making such a case, though, since Hillary Clinton and Bernie Sanders also made similar promises — and repudiated President Obama’s Trans-Pacific Partnership. Now, however, he’s taking concrete action — and, predictably, the architects of failed free trade in the Bush and Obama administrations are objecting. But many Democratic leaders find themselves reluctantly supportive even as many congressional Republicans remain opposed.
President Trump’s team is led by Trade Ambassador Robert Lighthizer, who has helped craft a strategy of measured responses to China’s aggressive behavior. Unfortunately, critics are calling the president a “protectionist” rather than calling out the behavior of other countries that blatantly act in their national interest. California’s manufacturers and workers should be particularly cheered that the president is taking action, considering the high-tech sectors that have repeatedly lost ground to subsidized tech firms in China.
Leaders in both parties know that America’s trade deficit and jobs problem has been brewing for years. Tariffs are the first step in a longer-term process to defend America’s economy against ongoing attack from countries that have shown little respect for world trade law. While Californians may not have much affection for President Trump, they should at least know that he’s following a surprisingly bipartisan agenda on the trade front. Democrats should agree with him that it’s time to turn from free trade toward strategic trade to support America’s manufactures, farmers and workers.
Michael Stumo is CEO of the Coalition for a Prosperous America.
