“America First” is a declaration of “No More Mr. Nice Guy.” This is the link between his views on NATO and trade. In the former case, he appears to think that the NATO alliance is a favor we do for an ungrateful Europe. While it would be a very positive development if every NATO member were to spend the agreed-upon 2 percent of GDP on defense, there is reason to doubt that Trump’s comments are simply veiled threats made in order to achieve that.
Trump has offered differing explanations for his tweets about NATO being “obsolete.” He has mentioned defense spending. He has also cited failure to cooperate on terror. But Article V has only ever been invoked for Europe to help America.
Unlike his views on immigration, abortion, single-payer health care, ISIS and countless other topics, Trump’s views on trade have been consistent since the 1980s. In 1987, he bought a full-page ad in The New York Times denouncing trade with Japan. He seems genuinely to believe that trade impoverishes us, which is odd for a businessman, because “trade” is really just another word for business.
It is true that our economy has seen very limited growth over the course of the past decade or so, but to finger the North American Free Trade Agreement and other trade deals as the culprit, instead of, say, overregulation or high taxes, is perverse. Trump cites the trade-deficit figures with China and others to prove that we are “losing” in a zero-sum competition and that jobs are being “outsourced” due to stupid leadership by politicians.
Manufacturing jobs are being lost to automation above all. Also, commerce (another word for trade), unlike war, has winners on both sides of the transaction, not winners and losers.
Trump has made a number of fine cabinet appointments, but the “trade triumvirate” of Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and the head of a new entity called the National Trade Council, Peter Navarro, are quite worrying advocates of so-called “nationalist” economics. Like Trump, they see trade as a form of warfare. It isn’t. But trade wars can lead to real wars, thus the saying, “If goods don’t cross borders, armies do.”
The possible ironies here are voluminous. 1) The people who will suffer from trade protectionism are the poor and working classes who will pay higher prices for goods, and see their jobs lost due to higher prices of imports (half of imports are used in American manufacturing, some of which go to exports). 2) China is benefitting even now from other nations’ fear of U.S. retrenchment on trade. Instead of American-led free-trade agreements, China is lining up Pacific nations for a Regional Comprehensive Economic Partnership, in which Beijing calls the tune.
The president has a great deal of independent power on trade matters. Here is something for Republicans in Congress to mull: If President Trump, the great businessman, ignites a trade war and tanks the economy, voters will draw the lesson that “those free-market Republicans have done it again. Capitalism equals depression.”
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