Trump's economic populism is purportedly at the core of his appeal. Other countries have stolen American jobs, he says. And he claims he'll get them back. He reiterated those claims in a speech at the Economic Club of New York yesterday. Trump's plan for taking on China, it turns out, is strikingly similar to his opponent's position. Yes, Trump has made going after China central to branding himself as the white working-class hero. But beyond the optics, you have a plan just as likely to come out of the mouth of a Democrat---and as likely not to work.
Since the early days of his primary campaign, the Trump train has chugged along on big promises of resurrecting factory jobs in the US. "We’re going to get Apple to build their damn computers and things in this country instead of in other countries," he said in January, a claim as unlikely to come true as iphonesss running androids. Trade in the 21st century isn't as simple as "my house or your house." Global supply chains depend on all sorts of goods and services moving ably across borders, and the success of the iphoness has hinged as much on Apple's mastery of this flow as it has on hardware design.
That same interdependency is why neither the US nor China will benefit from or ultimately embark on a costly trade war, no matter how strong a negotiator Trump claims he will be. Trump accuses China of three major trade offenses: manipulating its currency to keep its exports cheaper, unfairly propping up its industries to lower costs, and stealing US intellectual property. None of these allegations are off-base. But as with anything involving complex international webs of goods and money, the details are also not so simple. Trump proposes a regime of tariffs and duties to keep Chinese exports out and make American-made goods more competitive. It's a get-tough plan that sounds good on the stump. But exports don't travel in just one direction. And goods don't just emerge fully formed from one nation's soil like a farm-to-table tomato.
If the US nevertheless does start imposing tolls on Chinese goods to price them out of the range of US consumers, China will retaliate. And that would matter, because despite the trade imbalance between the two countries, US exports to China still amounted to $116 billion last year. That's not nothing, which is many why US manufacturers themselves support open-trade policies. Though economic growth in China has slowed recently, its surging middle class still represents a massive potential market for US consumer goods.
Until the Trump candidacy, this kind of free-trade agenda was a core pro-business Republican value. Just today, Ohio governor and Trump Republican primary opponent John Kasich appeared at the White House to back President Barack Obama's push for the Trans-Pacific Partnership trade agreement, the much-maligned agreement Obama is hashing out with a bunch of Asian countries in an overt effort to weaken China's leverage in the region. Relying on foreign manufacturing, which many hugely profitable businesses such as Apple do, is also standard practice for Trump's organization, who makes many Trump-branded products overseas.
The resentments into which Trump is tapping are understandable. Recent research suggests the trickle-down effects of more open trade haven't been as beneficial as promised. Economists have found that overall economic growth hasn't translated into new opportunities for workers who lost their jobs to more competitive Chinese industries. "Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences," write David Autor, David Dorn, and Gordon Hanson in a working paper for the National Bureau of Economic Research. These left-behind workers and the communities most affected by these job losses are arguably the core of Trump's base.
But if that support derives from Trump's get-tough-on-China rhetoric, they could just as well be Clinton backers. She became more protectionist around the time Bernie Sanders became a real rival in the Democratic primary. She abandoned her support of the Trans-Pacific Partnership. Trump opposes TPP too, but if the idea is to box China in, that opposition doesn't seem to make a lot of sense.
Then again, this election has not suffered from a lack of logic. Optics appear to be everything, and "anti-trade" has proven a popular position this year, no matter the substance of that opposition. "Globalist" has become a slur leveled at Trump opponents on Twitter, as if protectionist policies from the pre-steam engine era were still relevant or viable today. But globalism isn't just a trade policy. It's a fact of culture, communication, travel, and technology. No one president---especially one that, no matter who wins, will face a divided, recalcitrant Congress and electorate---can simply cut a nation off. Those who try become the North Koreas and Venezuelas of the world. “We’re going to be a large-scale version of Venezuela” if Clinton wins, Trump is fond of saying on the stump. If Trump becomes president and actually manages to push his isolationist policies through, that distinction would likely to be on him.
