Insights

Trade wars have been a part of American politics since the first crate of tea splashed into Boston Harbor. Disputes over tariffs and duties nearly destroyed the United States in its earliest days, turning customs houses into proxies for regional disputes and sparking small wars with both England and France. More than anything else, trade divided Washington’s cabinet into the modern two-party system.

In the two and a half centuries that followed, neither party has ever been exclusively protectionists, nor free traders. The issue of trade has redefined the parties over and over, and trade legislation remains one of the few issues where you’ll regularly see Congressional partisans crossing the aisle and bucking their leadership.

Lately, the United States has been on the protectionist side of the trade pendulum, with voters demonstrating little appetite for expanding global trade. In many districts across the country, the words “free trade agreement” can spell instant retirement for any elected official who votes in favor of such a pact—even though many of those districts benefit from trade more than they know.

There are plenty of strong advocates for expanding trade, but they tend to be in the boardrooms, the think tanks, and international bodies rather than the campaign trail or the House Floor. The quiet influence of free traders has more often been felt at the executive level, through free trade Presidents of both parties, usually with the grumbling assent of Congress.

That calculus has shifted over the past eight years. When Donald Trump’s “America First” campaign defeated avowed internationalist Hillary Clinton, protectionism became the primary instinct on both ends of Pennsylvania Avenue. And that’s the one thing that didn’t really change after Joe Biden entered office.

President Biden has kept in place most of Trump’s trade policies, particularly the punitive tariffs against China. The only notable shift was his removal of tariffs on allies, reflecting his more significant interest in bolstering cooperative security. Barring unlikely lame-duck activity, Biden will be the first President since Jimmy Carter not to present a free trade agreement to Congress for ratification.

The only free trade agreement Trump brought to Congress was the US-Mexico-Canada Agreement (USMCA). Still, it’s worth noting that “FTA” does not appear in its name and the main driving force for this renegotiated agreement was Trump’s campaign assertion NAFTA was “the worst trade deal ever made.” That speaks volumes of the negative brand attached to the words “free trade.”

Put the Trump and Biden administrations together, and you have eight years without free trade being used as a positive goal by the standard-bearers of either party. So, what does that mean for the future?

First, a step back is in order.

On the issue of trade, both Donald Trump and Joe Biden were the Presidents they told us they would be.

As a private businessman, Trump benefited from international trade and was unabashed in noting how the system benefitted himself at the expense of American workers. As a Senator, Joe Biden amassed a blended record on trade deals, voting in favor of NAFTA and normalized trade relations with China, but also promoted steel import quotas and opposed other trade legislation.

So, Biden and Trump essentially delivered the trade presidencies they advertised. What does this mean for 2024 election watchers? Advocates for free trade should believe Trump when he advertises a radically protectionist second term. He has promised a 100% tariff on all goods from Mexico, invalidating his own signature trade deal. He has also promised a 60% tariff on all goods from China, punitive tariffs against American companies like John Deere, and nearly 20 percent on all foreign-made items across the board. His campaign staff has asserted that he would have the authority to do many of these things without Congressional approval, thanks to the 1930 Smooth-Hawley Tariff Law giving him the power to do so.

Anybody take economics in college? The Smoot-Hawley Tariff doesn’t fare well among economic historians. It was even ripped by Nixon strategist Ben Stein in “Ferris Bueller’s Day Off.” This legislation is almost universally panned as having exacerbated the effects of the Great Depression. However, it does provide the president some authority to do what Trump promises. So, the business community should take notice and regard it with the sincerity of a real policy proposal that could be implemented on day one without congressional action or approval.

On the other side of the equation is Vice President Kamala Harris. There’s your wildcard. Yes, she is part of the protectionist Biden Administration – just like Biden was part of the free trade Obama Administration. Her senate record doesn’t include many trade votes because, as noted above, very few such pacts were brought to Congress for consideration. She opposed Trump’s USMCA, but her statement upon voting against this legislation indicates that her motivations were more tied to environmental and labor standards than protectionism.

“By not confronting climate change, the USMCA fails to meet the crises of the moment,” wrote Harris on an X post in January 2020 as she prepared to take the oath of office as Vice President while still fulfilling her duties as California’s junior senator. “We can do better, and that’s why today I voted NO on the USMCA in committee.”

Looking at the track records and the overall national mood, trade watchers should be aware we could be in for an even more protectionist swing in the next four years, regardless of who is elected President. The likely key difference is that under a Trump presidency, protectionism will be framed as an aggressive populist action with crowd-pleasing protectionist promises perhaps with dire Smoot-Haley implications. A potential Harris administration, on the other hand, would be less focused on across-the-board numbers and more focused on labor and environmental protections as a prerequisite to any international trade deal.

Trade remains an important part of the conversation and the economy. But the era of free trade as a political winning slogan is clearly over. What comes next could very well depend on the results of the coming Presidential and congressional elections. Those with an interest in business, international cooperation, and labor would do well to pay attention to this critical and longstanding pillar of American political divergence.

Cori Smith Kramer is CEO of Center Forward, which brings together members of Congress, not-for-profits, academic experts, trade associations, corporations and unions to find common ground and give voice to the center of the American electorate.