Trump is vulnerable on trade

Trump is vulnerable on trade

by digby

Neil Irwin of the New York Times shows
that Trump's trade war is one of his major weaknesses going into the 2020 election --- if Democrats are smart enough to thread the needle on the issue in the right way:

To President Trump, tariff “is a beautiful word indeed.” Just in the last few weeks, he increased tariffs on billions of Chinese imports and threatened Mexico with big new tariffs.

His enthusiasm as trade-warrior-in-chief, though, has not been mirrored by the public. At least that is the conclusion to draw from opinion polling, which shows a rise in enthusiasm for trade deals — and suggests an opening that the Democratic presidential nominee could have in the 2020 election.

That nominee could, strange as it may seem, have a pathway to take on Mr. Trump on a signature issue by simultaneously attacking him from the right, as being anti-business, and from the left, as being bad for workers.

In a 2015 Monmouth poll, only 24 percent of Democrats said they thought that trade agreements were generally good for the United States. In late May — after an escalation of the trade war with China but before threats of new tariffs on Mexico — that had risen to 55 percent. On Friday night Mr. Trump suspended the tariffs, for now, after Mexico agreed to reduce the flow of migration.

It’s not just a case of “if Trump is for it, we’re against it” contrarianism for Democrats: Republicans’ approval of trade agreements rose over that same period, to 40 percent from 23 percent.

In battleground states mostly in the Rust Belt — Iowa, Michigan, Ohio, Pennsylvania and Wisconsin — 39 percent of registered voters said they thought Mr. Trump’s trade policies were good for the economy, versus 47 percent who thought they were bad, according to a May Quinnipiac poll.

You can imagine a trade pitch from the 2020 Democratic nominee that goes something like this: “I’ll work with allies to keep pressure on China over its unfair practices — but not with open-ended tariffs on thousands of goods that are a tax on American consumers and invite retaliation against American farmers. I won’t use tariffs against countries that are our close partners. And I’ll use trade policy to try to boost well-being for American workers, rather than using it as a cudgel on unrelated issues.”

It could prove a potent way to knit together a Democratic coalition that depends on both traditional labor-left voters in the industrial Midwest and college-educated suburbanites who are more comfortable with globalization.

“I think Trump is hugely vulnerable on trade, but Democrats haven’t quite figured out how to attack that vulnerability yet,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. “Trump’s approach has made things worse for both key Democratic and Republican constituents.”

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Rather than focusing on a few discrete areas where international competitors have treated American companies unfairly and applying temporary tariffs to try to exert pressure, the Trump administration has applied open-ended tariffs on imports of nearly 7,000 different items.

The administration has also placed tariffs on “intermediate goods,” so that efforts to create jobs in one sector can mean higher costs and fewer jobs in another. The taxes on many steel and aluminum imports, for example, may be creating some jobs in those sectors while increasing costs for automakers and other American companies that use the metals.

And trading partners have been savvy about using retaliatory tariffs to punish Mr. Trump’s base, most notably on American farm products.

Combine those factors, and the trade war so far has offered more pain than it has a clear pathway to better deals for American companies and workers. Especially with China, it has often seemed that rather than seeking to achieve attainable goals, the conflict is the whole point.

Early jockeying between the Trump White House and the Democratic front-runner Joe Biden’s presidential campaign suggests that the president would, in a potential matchup, claim Mr. Biden is weak on China.

But how that will play if the trade war with China causes more evident economic pain?

The first round of tariffs against China was limited to goods purchased mainly by businesses. But in seeking to apply more pressure on China to make major overhauls, the Trump administration is taxing about $200 billion worth of imports from China at 25 percent, a list of goods that includes many consumer products like furniture and auto parts.

That went into effect in early May and, given the time it takes for container ships to go from China to the United States, is only beginning to ripple through to the costs of consumer goods.

Most people look at the trade wars and say “it’s probably better to lean more toward free trade than toward tariffs when all is said and done,” said Patrick Murray, director of polling for Monmouth University. “But they’re not seeing anything in terms of ‘this is undermining my quality of life right now.’”

Political science research suggests that the public tends to drift away from any president’s view on an issue when a big change is enacted.

Mr. Murray said trade is an issue in which America’s views are not strongly anchored. Rather, they can adapt based on economic circumstances and what message political leaders articulate.

Mr. Trump took advantage of that flexibility to persuade many Republicans to embrace a protectionist approach in 2016, and was able to appeal to a key segment of Democrats as well. The premium on retaining so-called Obama-Trump vote switchers in 2020 may help explain Mr. Trump’s recent moves — he may view it as keeping a promise of being tough on trade.

The challenge for the Democratic nominee will be to offer a persuasive vision for a trade policy that makes both workers and businesses better off than they are under the status quo, to stand up for American interests while removing the erratic approach of the Trump administration.

It’s no simple task, but the polling suggests it’s possible.

There are many problems with the world trading system as it exists. But Trump is making them much, much worse. Democrats need to articulate a view about this that makes sense for all Americans because Trump's actions are incoherent and dangerous and I'm not sure most Americans know what to think at this point. You don't want the old right wing LaissezFaire gift to the multi-nationals to continue. But this unilateral "my way or the highway" approach could easily lead to something very, very dangerous.

One presidential candidate has articulated a new vision. (The one with all those plans, of course.)