Democrats are cornered on Trump’s trade war. But there’s a way out.

Democrats, especially those running for president, can’t support President Trump’s trade war with China. They just can’t. It’s the heart of Trumponomics and encapsulates his “America First” ideology. To embrace the bold, brash, bludgeoning trade war is to embrace the essence of Trumpism. And politics aside, many or all of them might truly think the tariffs are ultimately an exercise in economic self-harm — and a clumsy, ineffective way to change Beijing’s behavior.

But the 2020ers also can’t simply counter Trump with 1990s vintage go-go globalism. Not in the age of populism. Too much has happened over the past two decades. Economic studies have documented how trade with China in the 2000s badly hurt some U.S. regions. China itself has taken a totalitarian turn even as its growing technological prowess poses worrisome economic and military challenges for America. And, of course, the 2016 election happened. No Democratic strategist thinks paeans to globalization and free trade — never popular with progressives anyway — are the way to win back the Rust Belt.

Democrats look foolish today for their mocking response to Mitt Romney calling Russia “without question, our number one geopolitical foe.” They need to do better with China. Slamming the trade war for hurting farmers and lower-income consumers isn’t enough. Nor are vague calls to “hold China accountable” for its protectionist policies. Tough talk loses to Trump’s tough action.

Sure, it would be a good start if Democrats promised to revive the Trans-Pacific Partnership agreement that Trump abandoned. But the Trans-Pacific trade deal badly split the party back in 2016. Indeed, the North American Free Trade Agreement, which Trump opposed and then renegotiated, also remains divisive. Already Joe Biden’s vote for NAFTA in 1994 and support for TPP are seen as vulnerabilities to be exploited by his challengers to the left such as Kamala Harris, Bernie Sanders, and Elizabeth Warren.

So a political and policy problem. But not an intractable one.

First, Democrats need to separate out China from the other fronts in Trump’s global trade conflict. It’s worth their noting that America isn’t the sucker of the world, as Trump has repeatedly claimed. For instance: before the Trump tariffs, according to the World Trade Organization, American exporters faced an average 3.0 percent trade-weighted tariff when sending products to the EU, while EU exporters faced American tariffs of 2.4 percent. These are not significant differences. If Trump wants to further expand his trade war by, say, slapping a fat tariff on European automobiles, Democrats should strongly oppose it as bad for American buyers and the global economy.

Second, devise an alternate policy to negotiation and retaliation by tariff. What stick are Democrats proposing to get Chinese concessions on issues such as forced tech transfer, cybertheft, and closed markets? There are many possibilities other than broad tariffs, which penalize Chinese firms whether or not they are bad actors. Think surgical strikes rather than carpet bombing. Washington should pursue Chinese companies benefiting from their government’s protectionist practices. They can be banned from doing …read more

Source:: The Week – Business


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