Co-Authored by Sharath Patil
The 2020 election is one for the record books. At the time of this writing, states have adapted at least in part to mail-in voting systems and voter turnout is booming despite the ongoing public health emergency. There’s another less obvious reason why the 2020 election is unique: it may be the first election in which U.S. trade policy has been a key issue on the debate stage. What does Trump’s record on trade look like? How do Trump and Biden’s trade platforms compare? We will discuss each of these issues, in turn.
Trump’s Record on Trade
Regardless of the merits of Trump’s trade policies, it’s certainly true that Trump has made trade policy a center-stage issue. The administration has enacted policies that counter several decades of neoliberal trade policies. The administration has also questioned fundamental tenets of the global trading system and the function and purpose of the World Trade Organization. Furthermore, Trump has followed through on many trade-related campaign promises by utilizing an array of tools. For example, Trump has:
- Pulled out of the Trans-Pacific Partnership (“TPP”)
- Imposed Section 301 tariffs on China
- Imposed Section 232 tariffs on steel and aluminum imports
- Designated China as a currency manipulator
- Replaced the North American Free Trade Agreement (“NAFTA”) with the U.S.-Mexico-Canada Free Trade Agreement (“USMCA”)
- Appointed “tough” trade negotiators like U.S. Trade Representative (“USTR”) Robert Lighthizer
However, other trade-related pledges have not necessarily been met by the Trump administration:
- Reducing the Trade Deficit – Trump campaigned on a promise to quickly reduce the U.S. trade deficit. However, according to most estimates, the U.S. trade deficit has only ballooned under Trump. In fact, the U.S. goods trade deficit with the world has increased 16.2 percent from $735 billion in 2016 (the year before Trump took office) to $854 billion in 2019 (the most recent full-year data available). However, most mainstream economists believe that the U.S. trade deficit is not an important indicator of the economy’s health, and that fixing the U.S. trade deficit should not be a key objective of U.S. trade policy.
- Creating a Thriving Manufacturing Sector – The manufacturing sector grew during the first three years of Trump’s administration. In fact, U.S. manufacturing employment grew from 12.38 million workers in Trump’s first month in office to 12.87 million workers in December of 2019. However, the manufacturing sector took a hard hit with the Coronavirus Pandemic, resulting in thousands of jobs being lost. As of September 2020 preliminary data (the latest data available), U.S. manufacturing employment stands at 12.21 million workers, down 0.17 million workers since Trump first took office.
Biden vs. Trump on Trade
The Trump administration has taken a decidedly protectionist and nationalist approach with regards to U.S. trade policy. Promising a re-invigoration of the U.S. economy, the administration has emphasized reducing U.S. trade deficits, increased tariffs, imposed greater trade restrictions, and increased enforcement. Perhaps most importantly, the United States under Trump has started a monumental trade war with China based on concerns about Chinese intellectual property theft and currency manipulation.
Meanwhile, the Democratic Party seems to be split on trade. The Biden campaign aims to balance center-left liberalization attitudes towards trade policy with more liberal labor and environmental concerns. The Biden campaign has pledged to prioritize climate action and emphasize workers’ rights. Biden’s voting record indicates that he is in favor of trade liberalization; however, his campaign has been largely silent on specific trade policies. A potential Biden administration would certainly inherit the ongoing U.S. trade war with China. In fact, Biden’s campaign has not stated whether he would retain the Section 301 tariffs that Trump imposed.
No matter what happens on Election Day, Diaz Trade Law is here for you. We can help your business navigate an increasingly complex trade environment characterized by higher tariffs, greater restrictions, and increased enforcement. If you have questions on any customs or international trade matters, please reach out to us at email@example.com. And don’t forget to vote!