Editors note: the Democrats need to be more aggressive on trade to be effective leaders.
[Andrew Soergel | September 12, 2019 | U.S. News]
The tightrope that Democratic presidential hopefuls are attempting to walk on the trade and tariffs front was perhaps best exemplified by Ohio Rep. Tim Ryan’s response to a question about President Donald Trump’s steel tariffs during the July Democratic primary debate in Detroit.
When pressed as to whether he’d continue the Trump administration’s tariffs if he secured a spot in the White House, Ryan responded: “I would have to re-evaluate. I think some of them are effective. But he’s bungled the whole thing.”
Democrats broadly agree Trump has erred in his ongoing trade war with China, his insistence on implementing a new North American trade agreement and his continued threats of tariff implementation on European manufacturers and exporters around the world.
But they’re split on how – or even if – they’d go about conducting trade in a fundamentally different way. And that’s partly because few candidates can afford to alienate Democratic voters that are far from uniform in their views on how the U.S. should conduct business with the rest of the world.
Where the 2020 Democrats Stand on Tariffs and Trade:
Sen. Michael Bennet
Bennet believes Trump has the right idea in taking on China for its trade practices, but he has argued that tariffs have hung American farmers out to dry. He has also been critical of previously negotiated trade deals.
Former Vice President Joe Biden
The former vice president has said he’d be open to rejoining the Trans-Pacific Partnership – a global trade agreement between a handful of Asian and North and South American countries negotiated under former President Barack Obama. But he has said the deal needs to be reworked to better serve American workers. He has downplayed China’s role as a primary competitor to the U.S. economy, and he previously voted to allow China to join the WTO.
Sen. Cory Booker
In a June Q&A with CNBC, Booker said he wants to be known as a “pro-trade Democrat, not trade in a way that’s going to put American workers in the crosshairs.” Booker has previously criticized China for unfair trade and currency practices, and he did not support fast-tracking TPP under former President Obama.
Montana Gov. Steve Bullock
Like many candidates, Bullock has vowed to end America’s ongoing trade disputes and negotiate new agreements that put U.S. workers first. Bullock has also suggested more actively working with other nations to curb China’s less desirable trade practices.
South Bend, Indiana, Mayor Pete Buttigieg
Buttigieg has long contended that tariffs are taxes on American consumers – and that a potential Buttigieg administration would be more judicious about using them to threaten U.S. trade partners. He has also called for adjustments to the new North American trade agreement, which is currently awaiting Congressional approval.
Former HUD Secretary Julian Castro
Castro is one of only a few candidates with relatively positive things to say about NAFTA and how the trade deal managed to help the economy of his native San Antonio, Texas. He has called to retool the deal. He was also a member of Obama’s cabinet when TPP was drafted and has similarly pushed for adjustments to the deal without completely abandoning it.
New York City Mayor Bill de Blasio
de Blasio has been critical of NAFTA and TPP, though he also hasn’t been particularly supportive of Trump’s NAFTA rewrite.
Former Rep. John Delaney
Delaney has been among the 2020 Democrats’ most pro-free trade candidates, pushing for a reentrance into TPP and a coordinated international strategy for reining in China.
Rep. Tulsi Gabbard
A staunch opponent of TPP and a regular critic of NAFTA, Gabbard has called for greater transparency in trade deal negotiations. She has also been critical of the Trump administration’s trade war and its effects on the U.S. economy.
Sen. Kamala Harris
Harris has said she would not back the U.S.-Mexico-China Agreement – the new NAFTA deal negotiated by the Trump administration and still awaiting congressional approval. She has previously said TPP did not go far enough to protect American workers. She has been particularly critical of the Trump administration’s trade war with China and its impact on farmers and U.S. exporters, cautioning against using tariffs as a tool to pressure other countries.
Sen. Amy Klobuchar
Klobuchar’s record on trade is a bit of a mixed bag. She has previously supported tariffs on Canadian lumber and efforts to rein in foreign steel dumping in the U.S. – a practice that largely implicated China. But she has also supported lifting the trade embargo on Cuba and allowing American producers to more freely access international markets.
Former Rep. Beto O’Rourke
O’Rourke has advocated for engaging with, rather than antagonizing, China to help address global issues like climate change. He has also advocated for labor and intellectual property standards in future trade negotiations.
Rep. Tim Ryan
Ryan has long been an opponent of China’s trade and currency valuation practices. He supports getting tougher on China and curbing intellectual property theft, in particular. But he has criticized the Trump administration for appearing to lack a coherent long-term strategy.
Sen. Bernie Sanders
Sanders, like Warren, has carved out a niche as an anti-globalization Democrat who believes U.S. corporations have taken advantage of previous trade deals and, by extension, American workers. Sanders has proposed reshaping tax deductions and tax breaks offered to U.S. multinational companies and instituting labor, environmental and human rights standards into future trade agreements.
Former Rep. Joe Sestak
Like Delaney, Sestak has called for the U.S. to rejoin TPP, and he has criticized the Trump administration’s handling of the China trade dispute.
Billionaire Philanthropist Tom Steyer
Steyer has been a vocal opponent of Trump’s trade war, highlighting its impact on American farmers, in particular. He has called for greater separation of the corporate and political worlds, but he has not championed many specific trade strategies of his own.
Sen. Elizabeth Warren
Warren has expressed an openness to seeking out trade deals, provided partners are held to high economic, social and judicial standards. Warren laid out her trade agenda in a July Medium post, though some experts have pointed out that the U.S. wouldn’t even be able to enter into a trade deal with itself given the high bar that Warren set.
Author Marianne Williamson
Williamson hasn’t been outspoken about her plans for trade. In August, she said during an appearance on CNN Saturday that the U.S. has “a little bit of a mad King George in charge of this country right now, and his chaos, and what he’s done with the tariffs, and what he’s done with China” have been problematic for the economy and the stock market.
Entrepreneur Andrew Yang
Yang has described tariffs and the ongoing trade war with China as “the wrong way to go.” He has criticized China’s trade policies, but he also believes China’s relatively recent prosperity should not inherently threaten America’s place in the world. He also supports the introduction of a value-added tax of 10% to increase revenues and bring U.S. trade practices more in line with international partners.
Why Tariffs and Trade Matter in the 2020 Election
Per a Pew Research Center poll published in July, 65% of Americans – and 73% of Democrats and left-leaning respondents – said free trade agreements have been a good thing for the U.S. Meanwhile, 56% of respondents – and 82% of Democrats and left-leaning respondents – believe increased tariffs between the U.S. and its trading partners have been a negative development.
Naturally, one would think that shaping a trade policy that runs counter to Trump’s penchant for tariffs would be a winning formula with voters. But few of the more experienced Democratic candidates have a long history of promoting free trade – and voters in key Rust Belt states have in recent history been more supportive of candidates that have fought against, rather than for, sweeping multilateral trade deals.
“Trade is not a partisan issue in that it does not cut cleanly across party lines,” says Michael Stumo, the CEO of the Coalition for a Prosperous America, a trade-focused nonprofit that supports the president’s use of tariffs and more concrete trade restrictions. “We’d worked more closely with the Democrats until a couple of years ago when the president got elected, because the Democrats on the House side, in particular, were the more trade agreement skeptics.”
Though discontent toward globalization had been bubbling up among voters for years, the multilateral trade march in Washington seemed to halt with Trump, who began adopting a series of more isolationist policies that some Democratic presidential hopefuls had previously supported.
By labeling China a currency manipulator, Trump slapped China with a label Ryan and Sanders had been throwing around for years. By attempting to dismantle NAFTA, Trump took action against international trade policies that Sanders and Warren had previously derided for adversely impacting American workers.
More hawkish Democratic candidates have been left to differentiate themselves from a deeply unpopular president among left-leaning voters, even though some of his trade actions aren’t far off from positions Democratic lawmakers have previously supported.
“Most of the candidates are having trouble figuring out what to say about that. Some of them will say – Biden is sort of an example of equivocation on the subject – that TPP has to be renegotiated. He’s sort of saying what (former Sec. of State) Hillary (Clinton) did back in 2016, and nobody believed her,” says Bill Reinsch, the Scholl Chair in International Business at the Center for Strategic and International Studies. “So I’m not sure anybody’s going to believe him. You’re better off being honest about it than trying to say something that is manifestly so at odds with your long record.”
That leaves the 2020 Democrats generally fall into two schools on trade. The Sanders-Warren camp has called for a continuation of strict and targeted trade management, though both candidates have taken steps to avoid falling in line with Trump on most major issues. Warren, in particular, has championed one of the more detailed trade strategies of any candidate to this point.
“Warren on her economic patriotism plan, it was quite good. And it was quite good to give Democrats a response to Trump’s economic nationalism without being thrown into a white nationalist or a racist camp,” says Stumo.
The other camp, of which Delaney is perhaps the most vocal member, appears to be supporting free – or, at least, freer – trade. Biden’s previous support for the initial NAFTA agreement and his ties to an Obama administration that sought to implement TPP and the Transatlantic Trade and Investment Partnership – a separate Obama-era agreement between the U.S. and the European Union – suggest he’d be a prime candidate to champion free trade. But Biden also opposed several free trade agreements drafted by President George W. Bush’s administration, and he hasn’t appeared particularly eager to run with free trade proposals during the 2020 primary season.
“Whether anybody’s going to pick that (free trade) mantle up and run with it, I don’t know. Biden gives no sense of doing that. Others like Booker and Harris tend to sound more like Bernie without the flame-throwing rhetoric,” says Reinsch.
President Donald Trump on Tariffs and Trade
“President Trump’s use of tariffs to restrict access to the U.S. market poses a challenge to faster U.S. economic growth. But here again, he appears to have tapped into a deep well of skepticism among voters regarding the impact of free trade on their own well-being,” a team of analysts at the UBS chief investment office wrote in an August research note. “While the tariffs may have already increased the cost to U.S. households, voters may not react as negatively to their imposition as one might expect.”
Trump has already made his trade shakeups a key selling point in his bid for reelection, and whoever does end up moving into the White House after Trump leaves – either in 2021 or 2025 – will inherit a trade landscape vastly different from what was seen when Obama left office a few years ago.
“Trump made it a big issue, and he’s going to do that again. That forces the Democrats to deal with an issue they’d prefer to ignore, because it’s complicated, difficult, it divides their party,” says Reinsch.
The 15% tariffs the Trump administration leveled on more than $100 billion of Chinese exports, which went into effect Sept. 1, are expected to hit clothing, shoes and more consumer goods than previous rounds of duties. Trump has asked multinational corporations to begin looking to move operations out of China, sparking pushback from business leaders and trade groups such as the U.S. Chamber of Commerce.
Trump also has preexisting steel and aluminum tariffs in place, which have complicated relations with several international trade partners, including Japan. The president has expressed interest in ironing out bilateral trade agreements with Japan and with the United Kingdom once the Brexit process is finalized. But these deals have yet to be finalized, and the new U.S.-Mexico-Canada Agreement that retooled certain aspects of NAFTA awaits congressional approval.
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