Donald Trump Is an Incoherent Leftist When It Comes to Free Trade
The Republican candidate's big economy speech showed just how strange his ideas are—and how he could enrage the GOP if he ever followed through on them.
On Tuesday, Donald Trump stood before a backdrop of compacted aluminum in Monessen, Pennsylvania, and did what he does best: explain to people why they should be mad as hell.
"The legacy of Pennsylvania steelworkers lives in the bridges, railways and skyscrapers that make up our great American landscape," he told the crowd, mostly reading from prepared remarks. "But our workers' loyalty was repaid with betrayal. Our politicians have aggressively pursued a policy of globalization—moving our jobs, our wealth and our factories to Mexico and overseas. Globalization has made the financial elite who donate to politicians very wealthy—I hate to say it, but I used to be one. But it has left millions of our workers with nothing but poverty and heartache."
Trump's xenophobic immigration policies, hawkish bluster, and healthcare "reforms" are mostly in line with traditional GOP thinking. But on economic issues, the subject of his latest speech, he's impossible to pin down, speaking about left-wing ideas in the language of the right, pushing back on the free trade consensus that has dominated both parties for years.
His basic narrative, repeated Tuesday, is that America is losing because countries like China engage in "unfair" trade practices like currency manipulation and subsidized goods, saddling the US with an $800 billion trade deficit (in other words, America imports $800 billion more in goods than it exports). Trump's answer involves threatening China, imposing tariffs, and renegotiating—and potentially withdrawing from—NAFTA.
Economics is a notoriously contentious field, but there's one blanket statement few economists would object to: Trump is very, very wrong about a lot of stuff. Rob Scott, the director of trade and manufacturing at the Economic Policy Institute, a liberal think tank whose work Trump cited on Tuesday, agrees that globalization has caused problems for workers, but doesn't concur with the candidate's solutions.
"Like a drive-by shooting, he fires enough bullets, he's going to hit some things that might look like a policy that works," Scott told VICE. "But it doesn't have a coherence."
"The problem with NAFTA is that we failed to effectively help Mexico develop as part of the agreement," Scott continued. A good model, he said, was what wealthier European nations did for their neighbors like Greece and Spain decades ago, pumping money into their economies to create new markets for goods, thus making a pan-European economy possible.
"We could create such a vision and implement a truly united North American economy that worked for everybody but nobody's put that on the table," he said. "Certainly Trump is not talking about that—he's talking about building walls."
Joshua Meltzer, a senior fellow at the Brookings Institute, had other problems with Trump's speech. For one, Trump "completely misunderstands what the trade deficit means for the US economy." Exporting more than you import isn't a sign of economic health—for instance, Japan has a trade surplus, and "no one would say Japan has a strong economy."
Meltzer and Scott disagree about many topics that Trump touched on, including the benefits of globalization—but neither of them thought much of the politician's plans.
Meltzer thinks that on a basic level, Trump doesn't understand how trade deals like the proposed Trans-Pacific Partnership (TPP) work. "He's got this very simple, zero-sum game of trade," he said. "His view is that some countries have to win and some countries have to lose. He's incapable of understanding that trade negotiations are a win-win for all parties, that the US is better off if these other countries are also doing well."
Trump seems oddly fixated on trade negotiations as a way to improve the economy, which doesn't really make sense according to Scott, and the Republican candidate's preference for bilateral trade deals over multi-country arrangements like TPP is similarly confusing.
"I have to intuit what he's trying to say there," said Scott, "but my guess is that he thinks that somehow he as a person, as a negotiator, could have more leverage dealing one-on-one with individual countries and could get more out of them than if he had to deal with 11 countries at once."
Some things Trump says are just flat wrong, like his contention that the US is "one of the most highest-taxed nations in the world" or the notion that politicians have done "nothing" about cheap steel being dumped on US markets (in fact, Chinese steelmakers have been punished with tariffs). Maybe strangest of all, Trump insisted that "the TPP creates a new international commission that makes decisions the American people can't veto."
"The TPP would not establish any kind of organization," Meltzer said.
But voters, unlike economists, don't pay attention to the wonkish details of speeches. Trump isn't a brainy candidate—you have to go a couple feet down to find the body parts he appeals to—and on a basic level, it's not exactly wrong to say that elites have gotten rich as the manufacturing middle class that sustained American cities died off. It's just weird that a Republican is saying it.
Since Bill Clinton decided to support NAFTA, which had already been endorsed by the GOP, after taking office in 1993, the two parties have mostly agreed that free trade is good, with most of the opposition to it coming from the left. But Trump's success shows that the Republican blue-collar base is open to his kind of anti-globalization talk—even as pro-business GOP pillars like the Chamber of Commerce publicly denounce it.
Trump's ideas are echoed in plenty of other places. Bernie Sanders sounded some of the same notes in a New York Times op-ed published Wednesday, writing that, "We need to fundamentally reject our 'free trade' policies and move to fair trade." Even Hillary Clinton, maybe pressured by Sanders's strong support among liberal voters, has seemingly abandoned the TPP, though it remains to be seen what she'll actually do if and when she becomes president.
For that matter, it's unclear what Trump would be willing or able to do if he were sitting in the Oval Office, especially since a lot of what he proposes, including tariffs, would have to be passed by Congress. The white men Trump was appealing to in Pennsylvania may like what he said, but what about the white men in Congress?
"In the 2012 election, Romney complained about currency manipulation from China. And Obama complained about currency manipulation," Scott said. "The problem is that when they get in office, we've not had leaders of either party who have been able or willing to put together effective trade and manufacturing policies to rebuild the manufacturing sector."
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