Democrats Have to Learn to Love Free Trade Again
It’s good policy. And it could be good politics, too.
TO SALVAGE WHAT WILL REMAIN of American alliances after President Trump’s second term, Democrats must become the party of free trade.
The current occupant of the White House seems willing to disrupt international trade and hurt America’s closest partners in pursuit of nebulous policy goals. Canada, which has just narrowly avoided being hit by a 25 percent tariff, is neither responsible for nor can do much about the fentanyl crisis in the United States, nor about its broken immigration system. The European Union, with its chronic trade surplus, might be next on the president’s enemies list.
In the short run, when confronting small open economies, like Panama or Colombia, tariffs or threats thereof may deliver the results the administration wants. Colombia agreed to accept deportation flights rather than withstand the pain of American trade barriers. Yet, very quickly, wanton protectionism will erode trust in the United States around the world and will force allies to look for arrangements other than their partnership with Washington.
The booing of the American national anthem in Toronto is only a flavor of things to come should the president continue this path. Even the most Americophilic Europeans may hesitate to help the United States in its global competition with China if they are subject to punitive, arbitrary tariffs.
President Trump’s trade wars should be a target-rich environment for Democratic candidates trying to put some distance between themselves and the rise of costs of living during Biden’s term.
For one, the earlier iteration of Trump’s tariffs failed to bring back industrial employment and amounted to one of the largest tax increases in U.S. history. This time, even the president himself admits there will be “pain.” The Tax Foundation projects that the announced tariffs on Mexico, Canada, and China would cost average household an $800 a year or more, bringing $1.1 trillion in federal revenue while shrinking the economy by 0.4 percent. That would make it one of the largest tax hikes in history, comparable in size to measures adopted by the Roosevelt administration during World War II.
An 2024 study by the Peterson Institute for International Economics estimated that Trump’s full tariff plan (involving 20 percent across-the-board tariff combined with a 60 percent tariff on China) would cost average household more than $2,600 every year— without taking into account the cost of retaliation, which would wipe out much of the economic gains accrued to the sectors protected by tariffs.
Even when the threat of tariffs is simply a negotiating tactic, they create uncertainty for U.S. businesses. In a politicized and fluid environment, investing, hiring workers, and creating prosperity become difficult. Companies will have every reason to pour more money into rent-seeking, palm-greasing, and lobbying—activities traditionally resented if not decried by conservatives—rather than investing in productive capacity. A proliferation of tariffs is likely to create opportunities for patronage, grift, and corruption not witnessed in the United States for decades. Opposing Trump’s kleptocracy, and thus against his arbitrary tariffs, should be an easy call for the left.
Most importantly, however, the invocation of International Emergency Economic Powers Act to impose tariffs on a friend and ally like Canada strains credulity. Sen. Chris Coons (D-Del.) is fully justified in arguing that “Congress gave the president the authority to impose tariffs so that he could combat our enemies in the event of a national security crisis, not so that he could pursue grudges against our allies and neighbors.”
Coons’s proposal, cosponsored by Sen. Tim Kaine (D-Va.), to require congressional approval before a president can impose new tariffs on allies and free-trade-agreement partners is a long overdue reclamation of congressional powers that should never have been handed over to any president so easily.
To check President Trump’s protectionist instincts and prevent downstream effect on our alliances, Democrats have some soul-searching to do as well. Since Hillary Clinton turned her back on the Trans-Pacific Partnership during the 2016 election campaign, the two parties have converged on issues of international trade.
The Biden administration continued Trump-era tariffs on European aluminum and steel. Just like his predecessor, Biden blocked appointments to the World Trade Organization’s Appellate Body, crippling the institution that defends the established rules of international trade. As one of his first steps, he signed an executive order tightening “Buy American” provisions for the federal government.
Make no mistake, protectionism is expensive, self-defeating, and bound both to erode America’s standing in the world and to make the world more dangerous. Whatever the real and imagined failures of the age of globalization and “neoliberalism,” returning to discredited trade-restrictionist ideas of the past is not a solution—and that realization might dawn on voters sooner rather than later.
While there’s little reason to hope that the GOP will free itself from the stranglehold of its leader and return to what were, not so long ago, its professed policy principles, there is a real opportunity for Democrats in Congress to champion policies that served America well for generations.
Doing so will require making arguments for restoring congressional control over tariffs instead of the current arbitrariness exercised by the White House, and devising an agenda both for updating existing trade agreements, such as USMCA, and for striking new ones with our European partners, in Latin America, and in the Indo-Pacific.
Inaction is not option. To see where American absence in trade negotiations leads, consider the fallout from our departure from the Trans-Pacific Partnership (TPP). Our abandonment of the ambitious deal, covering as much as 40 percent of global trade, on the first day of Trump’s presidency in 2017 did not kill the agreement. Under a different name, TPP lives on to this day, only without U.S. participation and with weaker intellectual property protections than the ones we had negotiated.
Our absence has also created an opening for China to deepen its connections with countries of the region, including through a parallel trade agreement with overlapping membership base, the Regional Comprehensive Economic Partnership. The Biden administration’s counteroffer, the Indo-Pacific Economic Framework, proved to be more of an awkward social club than a trade deal. The rest of the world is not waiting for the United States to get its act together. In response to our unreliability, other countries huddle more closely together—and often closer to China.
The world is already rattled by America’s inconstancy. But if the Democratic party doesn’t stand up for an idea that was once firmly a part of the nation’s bipartisan foreign policy consensus, the United States is headed into a future in which the world will works around us rather than with us—and not only on matters of trade.
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