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Tracking Trump's Congress

Trump Isn't Living Up to His Big Promises on Trade

The president pledged to clamp down on what he said were unfair practices from China, but he hasn't actually done much.

Before Donald Trump launched missiles into Syria, this week was actually primarily supposed to be about trade. That was Trump's number-one campaign issue, after all, back when he was talking about bringing jobs back and protecting the American worker rather than meddling in the Middle East; jobs and the economy will probably decide whether he's a successful president.

Last Friday, Trump signed his first proactive and wide-ranging executive actions on this central campaign issue. One ordered a report on the nation's trade status with countries that import more to the US more than the US exports to them, ostensibly to root out what the Trump crew would consider unfair practices. The other called for stricter enforcement of existing laws penalizing partners for known or suspected trade cheating. Trump followed up the flashy orders with a barrage of comments about his meeting with Chinese President Xi Jinping this Thursday and Friday, signaling that he'd put America's unbalanced trade relationship front and center. After that meeting, Trump is expected to sign an executive order clamping down on steel "dumping" (selling a good at an artificially low price in another country), a trade cheat in which China is often implicated.


From the outside, the moves seemed to project strength and a pending major policy overhaul; some administration officials even said as much. In practice, though, these measures and tirades just show how muzzled and muddled Trump's trade policy has become now that it's collided with reality.

"Trump made trade and tearing up existing trade deals a central theme of his campaign," said Dean Baker, co-founder of the progressive-leaning Center for Economic Policy and Research. As far back as his campaign kickoff in June 2015, he took a particularly harsh line on China, which he believes has manipulated its currency and the price of products to fleece Americans. His positions stem from a conviction that a country selling more defeats and demeans a country buying more. As a massive global exporter, in that worldview China is America's great satan.

This is a simplistic reading of trade. It ignores the complexity of global supply chains (when China sells us something, often a chunk of that money actually comes into the US economy) and the fact that while trade brings pain to some communities (usually manufacturers, who are hurt equally if not more so by issues like automation) it helps others, usually boosting overall wealth and production even as it hurts some groups. It's also a false reading of China, which does engage in numerous shady trade practices, but hasn't manipulated its currency against American interests in years and would almost certainly still sell us more than we sold them even in America's ideal market.


But Trump's ideas played to a longstanding national paranoia about China and the effects of free trade on American industry. His promises to label China a currency manipulator on day one, slap tariffs as high as 45 percent on Chinese exports to the US, and generally put up protectionist walls around American industries may have been a deciding factor in the election, as he was able to win Midwestern states that have seen their manufacturing base decline.

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Trump made good on one campaign promise right off the bat, pulling out of the Trans-Pacific Partnership, a massive free trade deal a decade in the works, soon after his inauguration. All through his transition and during the first couple months of his presidency, he and like-minded aides kept up a steady stream of hardline "blow-it-all-up" protectionist dialogue. Dan Ikenson, a trade policy scholar at the libertarian Cato Institute, thinks Trump and some of his team truly believe their nationalist economic mantras.

But if they do, they've taken a slow walk on that front. As Robert Scott of the left-wing Economic Policy Institute pointed out to me, Trump has yet to declare China a currency manipulator, impose any big tariffs, or enumerate any details about how he'd go about doing that. He hasn't even filled many vital positions that would deal with the nuts and bolts of trade policy. He hasn't started his promised overhaul of the North American Free Trade Agreement (NAFTA), added Baker. And his bid at insuring the Keystone pipeline would be built with American steel petered out as it was basically unenforceable.


"His actions on trade bear no resemblance to his campaign promises," said Baker, who added that Trump may still signal his trade maverick bona fides in speeches, but "at this point I don't think anyone cares… He signals everything and the opposite."

This gap between rhetoric and action put a lot of pressure on Trump's trade push this week. And he decisively disappointed his fans. Although his new orders hint at possible protectionist retaliation to come, they contain no immediate actionable content or truly fiery language. The report mandated in one order will likely retread ground covered in previous administration's one-off studies and many regular reports on trade. The better enforcement recommended in the second order, experts agreed, was low-hanging fruit any president would likely have gone for. Even the withdrawal from the TPP, Baker said, would have been pursued by most of the recent crop of presidential hopefuls, given its unpopularity with voters and Congress. "If you pull out the rhetoric," continued Baker, "there probably is not much difference" between Trump's initial trade bids and any recent administration's.

"I see the executive orders… as basically a delaying tactic," argued David Dollar, a Brookings Institutiontrade expert. Alongside wider inaction, this suggests Trump's trade agenda is in flux.

Some of Trump's failure to take action on his trade beliefs likely stems from the fact that, in practice, he is constrained in his ability to levy most forms of tariffs or reset trade extant deals without the consent of Congress, trading partners, or both. He can't even name China a currency manipulator on his own. Yet Dollar and Ikenson pointed out that Trump retains some unilateral powers that, while limited, could have real impacts. So some of this inaction likely comes down to internal debates between White House officials who believe in blowing the global trade system up and those who believe in incrementally changing it around the edges while maintaining the status quo. This squabbling, coupled with Trump's demonstrated lack of leadership and strategic vision on hard policy, may have ground real action to a halt.


Or, as Peterson Institute for International Economics trade expert Chad Bown suspects, Trump and company may have just realized that trade's more complex in practice than theory.

"Our relationship with China isn't only about trade," Bown said. "It's also wrapped up in these really important national security issues as well, like North Korea. So I think you can expect that's helped to put the brakes on things as well."

Trump could still turn things around and come out guns blazing on trade. But the experts I spoke to agree that moderating influences seem likely to carry the day. They may even lead Trump in the opposite direction of his hardline campaign rhetoric. To wit, a draft letter reported on late last month by the Wall Street Journal seemed to indicate that the administration would take a restrained approach on NAFTA, just trimming the edges; experts looking at the steps proposed noted it actually looked like that approach would revive several aspects of the TPP. At most, wonky observers suspect Trump will ramp up actions and cases against trade cheating under existing domestic and international law. But even that will largely just continue past administrations' effortsespecially Obama's.

"To date," summarized Baker, Trump "has indicated zero interest in his actions in breaking with the trade agenda of the prior administration."

Follow Mark Hay on Twitter.