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Tuesday, December 07, 2021

Democrats’ 2020 Problem: How to be tougher on trade than Trump

They have denounced the North American Free Trade Agreement for outsourcing jobs and criticized China for manipulating its currency to make Chinese products cheaper. They have vowed to use federal procurement, tariffs and other tools to help U.S. workers.

By: New York Times | Washington |
August 11, 2019 10:58:16 am
donald trump, us elections, us elections 2020, us president, democrats, us trade, us trade policies, us trade relations, trump, indian express President Donald Trump speaks to reporters aboard Air Force One, Aug. 7, 2019. Trump’s escalating economic war with China highlights a challenge for Democrats hoping to unseat him in 2020: They’ll have a hard time appearing tougher on trade than him. (Photo: Doug Mills/The New York Times)

Written by Ana Swanson

President Donald Trump’s escalating economic war with China highlights a challenge for Democrats hoping to unseat him in 2020: They’ll have a hard time being tougher on trade than he is.

For years, Democrats in Congress have been warning that China is an economic aggressor bent on undermining U.S. industry. They have denounced the North American Free Trade Agreement for outsourcing jobs and criticized China for manipulating its currency to make Chinese products cheaper. They have vowed to use federal procurement, tariffs and other tools to help U.S. workers.

Trump has stolen that playbook and gone further. On Monday, his administration formally designated China a currency manipulator, a step some Democrats have demanded for years. Last week, the president moved forward with plans to tax nearly every toy, laptop and sneaker that China sends to the United States. Trump has also renegotiated NAFTA, imposed tariffs on foreign metals and strengthened “buy American” rules so that federal projects use more materials from the United States.

So far, many of these efforts have not produced the kind of change Trump promised. His revised NAFTA, the United States-Mexico-Canada Agreement, is languishing in Congress, and his sweeping tariffs have prompted China and Europe to retaliate against U.S. products, particularly farm goods. The president’s trade war with China has begun driving up costs for consumers and businesses.

But Trump’s trade assault has put Democrats in an awkward spot. They are trying to figure out how to differentiate themselves from Trump — without ceding their position as the party that will do the most to defend workers against the downsides of globalization.

So far, they are divided between two very different approaches. On one side are Democratic lawmakers and presidential candidates who hew more closely to Trump’s isolationist approach, arguing that trade pacts have sold out workers in favor of corporations. On the other are those advocating the type of engagement undertaken by previous Democratic administrations, including those of Presidents Barack Obama and Bill Clinton, to try to gain more influence over other countries through negotiation and trade.

The party is split along familiar lines, with progressives like Sens. Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont calling for a more radical transformation of trade policy, and moderates like former Vice President Joe Biden espousing a more traditional approach.

That division is exposing a vulnerability for a party that has historically embraced a tougher stance on free trade than Republicans but has seen that position erode with the ascension of moderate Democrats like Clinton and Obama.

Progressives who had railed against trade pacts for years felt shunted aside in the Clinton administration, as pro-trade Democrats brought China into the World Trade Organization and finished NAFTA, a trade deal begun by President George Bush. They felt similarly ignored by the Obama administration, which pushed ahead with the Trans-Pacific Partnership, a multicountry trade pact, despite complaints that the deal was a boon to drug companies, would allow foreign automakers to flood the U.S. market and overlooked labor violations in countries like Vietnam and Malaysia.

Then came Trump, whose assaults on China and the North American Free Trade Agreement during the 2016 campaign mimicked what many Democrats had been saying. His promises to put “America first” won over some of the union rank and file, if not their leaders.

“At one time, the Democrats were much more aggressive on trade than the Republicans,” said Daniel DiMicco, Trump’s trade adviser during the 2016 campaign, who leads the Coalition for a Prosperous America, a trade group. “They’ve been missing for decades on this, just as many of the Republicans had.”

For now, many of the Democratic candidates are characterizing Trump’s trade policy as haphazard and inept. But some have also praised him for pursuing policies they have backed for years.

“I think President Trump was onto something when he talked about China,” Rep. Tim Ryan of Ohio said last month in the second Democratic debate in Detroit. “China has been abusing the economic system for a long time. They steal intellectual property. They subsidize goods coming into this country. They’ve displaced steelworkers, autoworkers, across the board, eroded our manufacturing.”

“So I think we need some targeted response against China,” Ryan added. “But you know how you beat China? You outcompete them.”

Ryan and other candidates spent much of the recent debate denouncing Trump’s trade war as a conflict without winners. But they offered few concrete ideas for how to better position the United States against China’s growing economic ambitions. And while the candidates were united in saying Trump’s tariffs were not the solution, only Rep. Tulsi Gabbard of Hawaii would commit to rolling them back once in office.

Instead, Democrats proposed working with allies to try to restrain China, or investing in job training programs to improve America’s competitiveness as a manufacturing base. And they clashed over whether their approach should result in more trade agreements, like Biden suggests, or fewer, like Warren.

The stakes are particularly high for Biden, who has a record of supporting free-trade deals like NAFTA, which he voted for while in Congress, and the TPP, which was ushered in while he was vice president. Although Biden portrays himself as the candidate most in touch with — and able to win — blue-collar and union workers, that electorate has become increasingly disillusioned with free trade and its ability to deliver promised gains.

Biden has called for rejoining the Trans-Pacific Partnership, which was aimed, in part, at pressuring China to overhaul its economy and strengthening the United States’ ability to compete against it in Asia. That deal proved deeply unpopular as the 2016 election approached — including with the Democratic nominee, Hillary Clinton — and Trump pulled the United States out of it in his first week in office.

Biden tried to head off criticism in the most recent debate, saying that he “would not rejoin the TPP as it was initially put forward” but would “insist that we renegotiate.”

“Either China is going to write the rules of the road for the 21st century on trade, or we are,” Biden said. “We have to join with the 40% of the world that we had with us.”

Others, like Warren and Sanders, continue to criticize trade pacts like the TPP as drafted by and for multinational corporations.

Trade deals “have become a way for giant multinationals to change the regulatory environment so they can suck more profits out for themselves and to leave the American people behind,” Warren said in the debate.

In Warren’s view, the United States should act as an agent of global change by only entering into trade deals with countries that have strong labor, environmental and other protections.

The standards in her trade agenda, released in July, are so high that they would prohibit the United States from entering new trade agreements with countries including South Korea, Germany, Japan, Singapore, Mexico — and, currently, the United States itself.

“Unlike the insiders, I don’t think ‘free trade’ deals that benefit big multinational corporations and international capital at the expense of American workers are good simply because they open up markets,” Warren said.

Sanders’ trade proposals, though less detailed, include ending federal contracts for companies that send jobs overseas, scrapping Trump’s rewrite of NAFTA, and labeling China a currency manipulator. The plan focuses on fulfilling Trump’s promise of renegotiating existing trade deals to stop the outsourcing of U.S. jobs, rather than writing new agreements.

Some candidates also see Trump’s rewrite of NAFTA as an opportunity to revive voter anger toward a trade deal that many within the party blame for decimating U.S. manufacturing, particularly the auto industry.

“President Trump is trying to sell NAFTA 2.0,” Bill de Blasio, the mayor of New York, said in the debate as he tried to attack Biden, who voted in favor of the original deal while in Congress. “It’s just as dangerous as the old NAFTA. It’s going to take away American jobs like the old NAFTA, like it did to Michigan. And we cannot have Democrats be party to a new NAFTA.”

Trump’s renegotiated NAFTA is largely an update of the 25-year-old pact, and it adds some provisions that Democrats have long favored, like higher requirements for using U.S. materials to make cars and the rollback of a special system of arbitration for corporations.

But Democrats say its provisions on labor rights and the environment are too weak. And they have particularly criticized a provision that would lock in intellectual property protections for pharmaceutical makers, seeing this as an issue where they can drive a wedge between the president and his populist base.

“Anyone who thinks that these trade deals are mostly about tariffs just doesn’t understand what’s going on,” Warren said in the debate. “Look at the new NAFTA 2.0. What’s the central feature? It’s to help pharmaceutical companies get longer periods of exclusivity so they can charge Canadians, Americans and Mexicans more money and make more profits.”

Some Democrats argue that Trump’s trade policy will not be difficult to counter, now that the pain of the trade war is being felt.

“Because he opposed NAFTA and trade agreements like I did, I think a lot of voters found that attractive, because these trade agreements have sold out American workers,” said Sen. Sherrod Brown of Ohio, who is not running for president. “But I think people’s patience is running thin, because his trade policy has really brought us nothing except a more difficult situation for a lot of people.”

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