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U.S. Trade Policy in North America, China, and Beyond

U.S. and Chinese officials, including U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, participate in the U.S.-China trade talks in Washington, D.C., February 2019. Credit: Alex Wong, Getty

4 Questions for the Trump Administration

In recent decades, economic, political, and technological barriers to international trade and investment have collapsed around the world. This rapid globalization of commerce has lifted many out of poverty in developing countries, but due in part to a lack of meaningful labor and environmental standards and enforcement, it has also resulted in an outsourcing of production and jobs as well as downward pressure on workers’ real wages in developed countries such as the United States.1 The key trade agreements and international institutions put in place to manage globalization, such as the North American Free Trade Agreement (NAFTA) and China’s entry into the World Trade Organization (WTO), have failed to rebalance the rules to enable globalization to work on behalf of all workers—not just in the United States, but in Mexico, China, and more broadly. And in many cases, the trade rules have exacerbated economic pressures on many U.S. workers.2

For years, progressive voices in the United States have called for efforts to make globalization work better for working families, communities, and the environment.3 Now, the Trump administration has sought claim to the trade reform mantle. Those claims, however, should be met with skepticism. The 2017 congressional Republican tax law slashed taxes for corporations and the wealthy on the false promise of raising wages for workers.4 Corporate profits, share buybacks, and mergers and acquisitions have all boomed, but working-class wages have barely budged.5 The international provisions of the 2017 tax law further incentivize offshoring operations at the expense of domestic investments and sourcing.6 The Trump administration’s domestic economic agenda of financial deregulation, budget cuts, and attacks on workplace safety and labor rights protections will simply make matters worse for working families.

The administration’s record on trade policy has been mixed and largely incoherent. The president railed against NAFTA and other trade agreements for harming workers and U.S. jobs yet renegotiated a new NAFTA deal that fails to make labor and environmental standards meaningfully enforceable.7 His administration has slapped tariffs on adversaries and allies alike with little strategy—often in the name of national security and without addressing the root causes of the problem. Threatening further tariffs, the administration now is engaged in negotiations with China over intellectual property theft, market access for foreign multinationals, and a state-led industrial strategy.8 The president announced a delay in the additional tariffs, suggesting a deal with China is coming together, but concerns have long existed that the administration may settle for high-profile spot sales of U.S. commodities while effectively letting structural impediments and China’s industrial policies continue.9 The cost of what may be President Donald Trump’s high-profile deal with China could be real concessions for the United States, including in the technology and national security space, without providing lasting, solidly enforceable benefits more broadly.10

View the complete February 27 article by Andy Green and Daniella Zessoules on the Center for American Progress website here.

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