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Former US President Donald Trump, flanked by Trade Representative Robert Lighthizer, at the White House.
Tariff Man’s main man: How Robert Lighthizer changed US trade policy
Former President Donald Trump delighted in calling himself “Tariff Man.” But Trump’s own Tariff Man was Robert Lighthizer, who led the Office of the US Trade Representative as the president’s top trade negotiator. Lighthizer’s new book, “No Trade Is Free: Changing Course, Taking on China, and Helping America’s Workers,” sets out his black-and-white views on trade, prosecutes his case against China as an existential threat to the US, and recounts his trade battles with foreign counterparts.
My career as a trade negotiator at USTR spanned the Obama, Trump, and Biden administrations. My experience during the Trump years, when Lighthizer was at the helm, can be summarized as: “It was the best of times, it was the worst of times.”
Those years were the best of times because the top priority for Trump was trade policy — it was his obsession. As a result, USTR staff members were extraordinarily busy negotiating deals with China, Mexico, Canada, Japan, and others. For a career federal government official, it was a rare privilege for one’s work to be a top White House priority.
Those years were the worst of times, however, because the Trump administration was hellbent on reversing decades of US trade policy. Trump, for example, promptly withdrew the US from the Trans-Pacific Partnership agreement, something my colleagues at USTR had spent years negotiating. This sudden U-turn meant USTR staff members were tasked with undoing years of trade policy work.
For Lighthizer, trade policy can be boiled down to a couple of words.
“Leverage” is one. His view is that the US has enormous leverage over its trading partners because of their dependency on the US market to sell their goods. He unapologetically believes that the US ought to use that leverage to get what it wants from countries that enjoy huge trade surpluses with the US. Reducing the US’ systemic trade deficits with countries like China and Japan was his — and Trump’s — preoccupation.
In Lighthizer’s view, the best way to use that leverage is by threatening to raise tariffs. Trump did this against China by applying record-high tariffs on billions worth of Chinese imports. And he threatened to slap tariffs on Japanese car imports if Tokyo did not allow more US agricultural products into Japan.
The use of tariffs became such a key part of trade policy for Lighthizer that the US Trade Representative could have been renamed the US Tariff Representative.
Another essential word for Lighthizer is “workers.” When it comes to the purpose of trade policy, his view is crystal clear: Protecting American manufacturing workers is the top priority. Full stop. Lighthizer is a Hamiltonian through-and-through. He quickly dismisses economists, who see the purpose of trade policy to be promoting efficiency. As for the benefits that imports contribute to the US economy — such as greater competition and lower prices — he is similarly scornful.
Lighthizer’s views were decidedly outside the mainstream for decades. Given the strong, pro-free trade consensus in Washington for generations, he was a lone voice in the wilderness decrying the sins of free trade. But then the Trump thunderbolt struck, and he suddenly found himself back in the halls of power.
Although a long-time Republican, Lighthizer’s economic nationalism has always been more in sync with progressive Democrats than free-trade Republicans. That shared view is why he was able to successfully renegotiate the North American Free Trade Agreement. He and many House Democrats were aligned by their mutual disdain of NAFTA, which they saw as a US jobs killer.
Lighthizer teamed up with those Democrats and negotiated new provisions to NAFTA to protect US workers. As a result, the new agreement (renamed as the US-Mexico-Canada Agreement) passed with overwhelming support from House Democrats. The AFL-CIO supported it, even though it had opposed trade agreements for years. But Lighthizer was labor’s ally, ushering in a historic shift.
Across from the White House, the portraits of those who have led USTR line the second-floor walls of the Winder Building, where USTR is located. Of the previous leaders, a sound case can be made that Lighthizer was the most effective in terms of changing the direction of US trade policy, whether one agrees with his vision or not.
Before Lighthizer, the Washington consensus accepted that free trade is good and protectionism is bad. After him, there is now deep skepticism about the benefits of free trade and more willingness to embrace protectionism. That is the most profound shift in US trade policy since World War II. Many Republicans have become Lighthizer’s apostles, and the Biden administration continues Lighthizer’s trade approach.
For Lighthizer, being Trump’s top trade negotiator was the best of times. And the fact that his efforts forged this new consensus on US trade policy means that it still is.
David Boling is Eurasia Group’s Director for Japan & Asian Trade. He worked as Deputy Assistant USTR for Japan from 2015-2022.
Biden's trade strategy
If Joe Biden is elected president next month, how will he change US trade policy? It's a question with serious pocketbook implications for Americans and all US trade partners.
Trade has become more popular in the US in recent years. In 2012, when Gallup asked Americans what "trade means for the United States," respondents were evenly divided between the options "opportunity for economic growth" and "threat to the economy." The more positive view of trade has risen each year since, and when Gallup posed the same question earlier this year, "opportunity" topped "threat" by a margin of 79-18. According to Gallup, this is a point on which Republicans and Democrats agree.
This survey did not focus only on trade in the abstract. Some 80 percent of respondents told Gallup that they consider the USMCA deal, President Trump's update on NAFTA that was finalized earlier this year, to be "good for the country."
Yet, much depends on the makeup of the next Congress and its willingness to renew the Trade Promotion Authority (TPA) —which allows the president to submit a trade deal to Congress for a simple up-or-down vote without the involvement of lawmakers in the deal's details— before it expires on July 1, 2021. Many Republicans will oppose anything that gives a President Biden more power, and many Democrats will insist on a say in the labor, environmental, and climate provisions of any new deals.
So, how might a President Biden approach trade?
The central question centers on China. Though Republicans favor a tougher approach, opposition to Chinese trade practices and theft of intellectual property enjoys bipartisan support, and Biden probably wouldn't move to lower the Trump tariffs quickly or without some concessions from Beijing. That said, escalation of the trade war looks unlikely as Biden tries to put the increasingly combative US-China relationship on a more constructive path.
Biden's different approach to China would also help define US trade policy toward allies. Many European and Asian governments share Washington's frustrations with China's ability to use loopholes in World Trade Organization rules to continue its policy of "state capitalism," China's system of direct state financial and political support for both state-owned and private Chinese companies that compete with foreign firms.
As part of a broader strategy to build a more united international front against China's trade practices, Biden is likely to end President Trump's steel and aluminum tariffs on Europe and to remove the threat of auto tariffs. That would offer a quick boost to Transatlantic relations.
A Biden administration would also move forward on a trade deal with post-Brexit Great Britain, but the end of TPA might delay it indefinitely. Biden is also less likely to threaten trade action against Japan, South Korea, Australia and other Pacific allies, but there are probably too many legislative obstacles for a US return to the Trans-Pacific Partnership anytime soon.
The return of Democrats to power would also mean a return to emphasis on the environmental and climate provisions of any trade deal. That's bad news for those who support a US deal with Brazil, where Jair Bolsonaro continues to enable deforestation in the Amazon.
Bottom line. There are two dominant factors that will shape the Biden trade strategy: His bid to build a more unified international front against China's state-capitalist trade practices, and the limits imposed on his negotiators if, as expected, Congress fails to extend TPA next summer.