President Trump’s trade policies are creating quite the uproar. They’re also creating a political realignment.
The history of America’s dominant political parties on trade is complex. Republicans have largely favored free trade, whereas Democrats have been more committed to protecting their union base.
As for tariffs, look at the last two Democrat presidents: Barack Obama slapped a 35% tariff on Chinese tires and Joe Biden imposed a 25% tariff on Chinese steel and aluminum. Both Biden and Donald Trump oppose Nippon Steel’s acquisition of Pittsburgh’s U.S. Steel.
Last year, I wrote about bipartisan opposition to the U.S. Steel deal, which included Republican senators JD Vance, Marco Rubio and Josh Hawley, and Democrats John Fetterman, Sherrod Brown and Joe Manchin.
Generally, among Republicans, we’re seeing sharp splits over Trump’s tariffs. Scott McKay at The American Spectator urges observers to realize that Trump’s tariffs are being done on a reciprocal, country-by- country basis. And not just tariffs. Consider the words of Peter Navarro, Trump’s senior counselor for trade and manufacturing:
“Take any given country,” says Navarro. “They all cheat us in a different way. Some of them engage in currency manipulation. Some have a hefty VAT tax. All of them dump into our markets. All engage in heavy export subsidies (and) put up phony … barriers to our Ag products, our autos, and everything in between. Many steal our intellectual property. A lot of them run sweatshop labor, including forced child labor.” Says Navarro: “We want fairness. We don’t want them to kill American workers (with) non-tariff cheating.”
Non-tariff barriers can be worse than tariffs, and harder to handle.
There’s more to the Trump thinking. As Francis Sempa writes at RealClearPolitics, Trump’s tariffs are part of an overall strategy to “promote manufacturing and reindustrialization at home.” Especially in Rust Belt areas and states like Pennsylvania.
Making “The Case for Tariffs” in the Wall Street Journal, John Michaelson, chief investment officer of Michaelson Capital Partners, states: “Perhaps the worst part of America’s (free) trade policies is their legacy of deindustrialization. Swaths of the country once proud of producing steel and aircraft are now better known for opioid abuse.”
That point was made last Saturday at the Pennsylvania Leadership Conference in Harrisburg. Every spring, I participate in the conference breakfast panel with Colin Hanna, John Gizzi and Jeff Lord. We discussed how Trump’s economic policies have pushed the working middle class toward the GOP. Democrats are no longer the party of steelworkers and coal miners but instead of Starbucks baristas and college professors, not of Pittsburgh and the Rust Belt but Manhattan and Silicon Valley, not of farmers in the Midwest but Northeast leftist elites.
The political effect of Trump’s economic policies is politically profound. In a revealing analysis at RealClearPennsylvania, Christopher Nicholas notes that in the early 2000s, there were a half-million more registered Democrats than Republicans in Pennsylvania. Under Obama, that Democrat lead doubled. But under Trump, that lead has vanished. The Democrat advantage is under 50,000. The lone Democrat stronghold is the Philadelphia media market. Trump support has surged in the state’s industrial areas. The data confirms Trump’s policies are prompting a major voter realignment.
But alas, that’s a political point. More important is whether Trump’s trade policies will help or hurt the overall economy long term. For this longtime free trader, that remains to be seen.