Trump’s Case Against Free Trade Makes No Sense

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Foreign workers, like these motorcycle assembly-line workers in Gujarat, India, earn as little as a quarter of what an American makes. Bringing those jobs back to the U.S. to create employment for millions of Americans is mere fantasy, the author writes. Amit Dave/Reuters

A lot of attention lately has been on Donald Trump’s racism and anti-immigrant positions, which are often cast simply as expressions of hate in America. Trump’s support among white supremacists is important, but focusing on that end of his spectrum of supporters risks a profound misunderstanding of the broader appeal of his message. Trump is playing on Americans’ deep discomfort with globalization.

Globalization is many things, but for the U.S. and for Trump’s rise the important parts are the soaring increases in trade, in the relocation of manufacturing abroad, rising immigration and soaring foreign debt. These themes echo throughout the candidate’s speeches, from his very first words on the campaign trail.

Trump’s Super Tuesday speech repeated the themes he laid out in his speech announcing his candidacy for the presidency back on June 16, 2015. Though that rambling, 45-minute talk was held in New York’s Trump Tower in front of a few hundred people (some of whom were reportedly actors receiving $50 gift cards to attend), Trump touched on key messages that appeal to many Americans.  

He began the speech by lamenting how the United States is losing in the era of globalization.

Our country is in serious trouble. We don’t have victories anymore. We used to have victories, but we don’t have them. When was the last time anybody saw us beating, let’s say, China in a trade deal? They kill us. I beat China all the time. All the time.

When did we beat Japan at anything? They send their cars over by the millions, and what do we do? When was the last time you saw a Chevrolet in Tokyo? It doesn’t exist, folks. They beat us all the time.

When do we beat Mexico at the border? They’re laughing at us, at our stupidity. And now they are beating us economically. They are not our friend, believe me. But they’re killing us economically.

The U.S. has become a dumping ground for everybody else’s problems.

Within that one minute, Trump touched on all four elements of globalization that he sees are responsible for the decline of American dominance. Trump has put his finger on the upset many people feel at the U.S. losing its position of control over the world: on trade, on manufacturing jobs, on immigration and on debt.

First, on trade. On Trump’s campaign website, there are exactly five issues on his “positions” page; trade and migration are two of them. Trade policy with China is at the very top. And at the top of that position paper is China’s admittance to the World Trade Organization (WTO) in 2000.

Since China joined the WTO, Americans have witnessed the closure of more than 50,000 factories and the loss of tens of millions of jobs. It was not a good deal for America then and it’s a bad deal now. It is a typical example of how politicians in Washington have failed our country.

Trump proposes tougher negotiations, and he apparently turns sharply against many in the investor class who would utilize globalization to drive down wages. “We need smart negotiators who will serve the interests of American workers—not Wall Street insiders that want to move U.S. manufacturing and investment offshore…. From textile and steel mills in the Carolinas to the Gulf Coast’s shrimp and fish industries to the Midwest manufacturing belt and California’s agribusiness, China’s disregard for WTO rules hurt every corner of America.”

Interestingly, Trump is not supporting the orthodox “neoliberal” policies of free trade and tax cuts for corporations. He does include deep tax cuts for corporations, but instead of arguing for American labor and environmental protection laws to be rolled back to make us competitive, he calls for forcing China to come to the table and impose those same levels of standards:

China’s woeful lack of reasonable environmental and labor standards represent yet another form of unacceptable export subsidy. How can American manufacturers, who must meet very high standards, possibly compete with Chinese companies that care nothing about their workers or the environment? We will challenge China to join the 21st century when it comes to such standards.

Unlike neoliberal globalization, Trump sounds as if he is proposing a “race to the top” strategy, not one of lowering standards here at home. The mismatch comes when he lays out concrete steps in his three-point plan on trade to “strengthen our negotiating leverage.” It includes cutting corporate tax rates to 15 percent, reducing federal debt to stop China from “blackmailing” us “with our own Treasury bonds” and deploying a strengthened military “in the East and South China seas.”

It is fanciful to think that the U.S. could magically “eliminate China’s illegal export subsidies” with pressure on China’s devalued currency and lack of environmental and labor law enforcement. Trump entirely misses the fact that the average Chinese factory worker currently earns about $27 per day—or well less than a quarter that of American factory workers.

The U.S. is no longer the center of gravity in global manufacturing supply chains, so bringing those factories back to the U.S. to create the millions of jobs he promises is fantasy. Asia now accounts for nearly half of all global manufacturing. China has distinct geographic advantages, and unfortunately for the U.S. it’s now far easier to set up a factory there, since all the components can be acquired nearby. Other Asian nations have similar advantages being near the China manufacturing engine and its booming consumer market.

Relatedly, in Mexico the minimum wage is about $5 a day. Sixty percent of workers are in the informal economy, meaning they get no formal paycheck and have no benefits. Median incomes per household are reported to be about $5,000, compared with about $30,000 in the U.S.

Given the unemployment and salaries one-sixth or less of American rates, it is difficult to see how a 10-foot-higher wall could stop migrants across a 1,954-mile-long shared border between the two nations.

The globalization of labor is slower than the flow of investments, currency, products and debt across borders. But it will flow.

Estimates are that Trump’s proposed border wall could cost in the tens of billions of dollars, and having Mexicans pay for it is another fanciful Trump proposal. To do so, he proposes more border fees and impounding the remittance payments sent home by Mexicans working illegally in the U.S. He raises other threats, of “tariffs and foreign aid cuts… We will not be taken advantage of anymore.”

Former Mexican President Vincente Fox has now twice publicly said, “We are not, I am not going to pay for that fucking wall,” to which Trump retorted that “the wall just got 10 feet higher.” Fox could have responded that “the smugglers’ tunnels just got 10 feet longer.”

The Fox-Trump wall flap is making personal a profound concern that Americans have—especially blue-collar workers and others who see low-wage jobs being taken by millions of Latin American workers—and that Trump plays upon. He proposes deporting 11 million illegal Mexican migrants: “You’re going to have a deportation force, and you’re going to do it humanely,” he said in a November debate.

Focusing only on the nasty racism in his appeal to voters’ basest instincts distracts from how Trump’s immigration plans actually seek to address important concerns of American workers. An August policy paper described how “any immigration plan must improve jobs, wages and security for all Americans.” The understanding is simple: “The influx of foreign workers holds down salaries, keeps unemployment high, and makes it difficult for poor and working class Americans—including immigrants themselves and their children—to earn a middle class wage.”

America is deeply concerned about globalization, and in Trump’s rise we can see how legitimate fears of the disruption brought by globalization can bring out the voters. Future primaries in the Rust Belt will see even more support for positions acknowledging these concerns, if Trump does not step too far across the lines of decorum and racism. So far, his campaign has proved resilient to such concerns.

I would argue that this is because he has tapped into deep concerns about our trade balance and national debt, and especially to the manufacturing jobs that built the American middle class. Democrat Bernie Sanders has also addressed some of these same concerns but proposes a way out that is far less reliant on dividing workers here against immigrants, instead putting the onus on corporations to play by rules that benefit Americans, if they want to do business in America.

Indeed, what is needed is recognition of these fears by American leaders, and the setting up of controls over corporations that would ship jobs overseas and exploit the weak labor and environmental rules there.

Corporate-led globalization, like every form of capitalism in the past, needs to be “re-embedded” in the society that makes it possible, with strong rules and enforcement to make the system socially and environmentally sustainable.

Trump’s plans are fantasy in their brash and simplistic certitude that tougher negotiation and exclusion of migrants are the solution to the deep structural transformation in our global economy. But on fears of globalization—what is derisively called “globophobia”—Trump has hit a very sensitive American nerve.  

Timmons Roberts is a professor of environment and society at Brown University. He is co-editor of The Globalization and Development Reader and The Globalization and Environment Reader (forthcoming).