22 July 2020

On trade, Trumpism will outlast Donald Trump


Even in a city of ideological chameleons, Joe Biden’s ability to blend in stands out. The Democratic presidential candidate has spent half a century shifting his views to match the mood of the moment. Tough on crime in the 1990s, he has taken up the mantle of police reform a quarter of a century later. Pro-life when that stance was tolerated in his party, he now says he is resolutely pro-choice.

What is true of policing and abortion is also true of economic policy. In a series of speeches and announcements in recent weeks, Biden has outlined a recipe that mixes the dirigiste assumptions of a Democratic Party moving to the left, with Trumpian protectionism.

The former Vice President’s wants to spend $700-billion on a “Buy American” plan to “Build Back Better” in the wake of the coronavirus slowdown. Some $400 billion would be spent on government procurement of US-made products, with tightly defined domestic-content rules; the remaining $300 billion comes in the form of subsidies for research and development.

As a senator, Biden swam with the generally pro-free trade current, voting for NAFTA and the normalisation of trade relations with China. As Vice-President, he pushed for the adoption of the Trans-Pacific Partnership (TPP). Now, as a presidential candidate, he says he would renegotiate TPP, and the mood in his party means any prospective trade agreement would come with a long wish list of environmental and worker protections.

Like Trump, Biden is especially keen on manufacturing jobs. According to his campaign website, “Biden does not accept the defeatist view that the forces of automation and automation render us helpless to retain well-paid union jobs and create more of them here in America. He does not buy for one second that the vitality of U.S. manufacturing is a thing of the past. U.S. manufacturing was the Arsenal of Democracy in World War II, and must be part of the Arsenal of American Prosperity today, helping fuel an economic recovery for working families.”

It is a view dripping with the same nostalgia as Trump’s economic populism and out of step with the shape of the 21st century US economy and what a good job looks like in 2020. No wonder the president’s first response to his opponent’s plan was, “He plagiarised me.”

But the problem goes deeper than Trump. Ignoring for a moment the strictures of party politics, Biden’s mix of industrial policy and protectionism would probably have the support of everyone from progressive hero Senator Elizabeth Warren on the left to darling of the national populists Senator Josh Hawley on the right.

Maddeningly, Washington’s pro-liberalisation consensus has collapsed even as polls record increasing support for free trade. In a WSJ/NBC poll from last August, a record 64% of Americans said they thought free trade with foreign countries was good for America while just 27% said they thought it was bad for the country.

The mismatch between the new consensus in Washington and public opinion isn’t as surprising as it might seem. The benefits of free trade are diffuse, the negative consequences are concentrated. (The inverse is true of protectionist measures.) Biden’s America First plans therefore aren’t necessarily bad politics. The Trump campaign is eager to paint Biden as an irredeemable globalist eager to ship US jobs overseas. A “buy American” plan neutralises those attacks and helps give a Democratic spending splurge wider appeal.

But it is striking — and for economic liberals, dispiriting — to see how little political capital there seems to be in full-throated support for liberalisation, even after the US government has spent nearly four years waging an expensive and unsuccessful trade wars with enemies and allies alike. American households have picked up the bill, but all too few politicians seem to want to point that out and make a broader argument in defence of free trade.

Biden’s economic nationalism is decidedly gentler than Trump’s. The Democratic presidential candidate doesn’t have his opponent’s mercantilist hang ups and, whatever ill advised promises he might be making on the campaign trail, would almost certainly govern with less protectionist instincts than Trump. Biden would be an improvement on trade, but given the drag on the US economy that Trump’s hostility to trade has been since 2016, that isn’t saying much.

Lost in the chaos of 2020 is a teachable moment: a chance to use the example of the Trump presidency to remind American voters of the advantages of exchange, and make the case for openness. That Biden has failed to take this opportunity, instead deferring to Washington’s new protectionist consensus, is no surprise. It is, however, a reminder that the assumptions of Trumpism will not depart with their chief exponent if he loses in November.

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Oliver Wiseman is US Editor of The Critic.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.