President Donald Trump took office almost four years ago, promising to tear up trade deals and negotiate new treaties better for American business.
He’s one for two.
Reading a column about the presidential candidate’s policies may seem quaint after Tuesday’s debate. I watched looking for insight into policy differences, and boy, that was a waste of time. But Americans should consider the economic consequences of their vote nonetheless.
While the president of the United States has little direct power over the domestic economy, Congress has given the White House enormous authority over foreign policy. The administration negotiates trade deals, which typically require the president to certify they are implemented fairly.
TOMLINSON’S TAKE: Trump must keep economy in mind when standing up to China
Trump made his intentions clear in his inauguration speech, declaring that: “We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.”
The president quickly withdrew the United States from the 12-nation Trans-Pacific Partnership, a new treaty that could have marginalized China and expanded markets for U.S. goods. He then demanded a rewrite of the North American Free Trade Agreement, which led to only minor tweaks.
Trump’s most significant transformation was moving away from big framework treaties that standardize rules among dozens of nations. Instead, he returned to old-fashioned, narrow deals with individual countries, closing two with Japan and South Korea. They only marginally increased U.S. exports.
The president’s trade failures, though, have been more hurtful to the U.S. economy. White House trade advisor Pete Navarro threw out years of progress on a European Union trade deal, sacrificing that opportunity. Trump then imposed new tariffs on European goods, including Scotch whiskey and French cheese.
Trump’s trade war with China has introduced new tariffs that have punished U.S. producers and consumers. To save the stock market, he managed to reach a first-phase trade agreement to boost Chinese imports of U.S. goods. But China is nowhere near meeting its commitments.
Talks with China are on hold until after the election, but so far, China has not given an inch.
Americans, meanwhile, have paid $80 billion in tariffs on foreign goods, according to the conservative Tax Foundation. No matter what Trump claims, foreign countries do not pay tariffs. American businesses pay them when the goods clear U.S. customs. Those costs are then passed to consumers.
The foundation estimates Trump’s tariffs have shaved a quarter percentage point off annual economic growth and have led to 180,000 American job losses. The trade deficit in manufactured goods set a record in August at $82.9 billion, according to the Commerce Department.
American farmers have suffered even more from losing their most important foreign markets. Trump has spent $28 billion in taxpayer money compensating them.
Former Vice President Joe Biden also promises new treaties for fairer, cleaner and more efficient trade. Instead of determining what tariff should go on each item, he will join the European Union and Pacific Rim countries in establishing common legal standards to qualify for free trade.
Business people would benefit from consistent rules for shipping, inspections, labor and pollution controls. Workers would know they are competing on a level playing field.
Environmentalists could feel confident that nations selling goods to the United States would have to meet similar standards. Labor unions could insist on fair pay and safe conditions overseas knowing that foreign governments do not want to lose their privileges.
Past U.S. presidents have led the world on these issues for decades, from the General Agreement on Tariffs and Trade to the World Trade Organization. As with any political process, no agreement will ever be perfect, but people around the world, including Americans, have seen an enormous improvement in living standards from global trade.
TOMLINSON’S TAKE: Biden economic plan harkens to 1933 for inspiration
In many ways, though, Biden remains a mainstream Democrat loyal to labor unions. He is promising his own version of “America First.”
“I will not enter into any new trade agreements until we have invested in Americans and equipped them to succeed in the global economy.” Biden wrote in Foreign Policy magazine. “And I will not negotiate new deals without having labor and environmental leaders at the table in a meaningful way and without including strong enforcement provisions to hold our partners to the deals they sign.”
By partnering with the world to build a global trade framework that puts people first, Biden can rally other nations to oppose China’s predatory practices. President Xi Jinping has used Trump’s jingoism to rally the world around his authoritarian model at the expense of democracy.
Trump has failed to deliver for American businesses and workers. Biden’s plans make better sense.
Tomlinson writes commentary about business, economics and policy.
twitter.com/cltomlinson
chris.tomlinson@chron.com
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