By Miguel del Valle Lopez
Donald Trump’s approach to tariffs and trade sharply contrasts with Reagan’s free trade stance. His policies reflect a form of economic liberalism that prioritizes limiting government intervention while on the other hand critiquing ‘hyper free trade’ for its negative impact on American workers.
Throughout the years, Trump has expressed great admiration for Reagan and his presidential administration. In fact, Trump’s beloved political slogan, MAGA (Make America Great Again), drew inspiration from Regan’s slogan “Let’s Make America Great Again”. Despite his expressed admiration, Trump’s policies have diverged from those of Reagan. In fact, with respect to tariffs, Trump’s policy could not be more different from Reagan’s. In 1988, in a Thanksgiving radio address Regan defended the blessings of free trade and warned against those who lambasted free trade: “We should beware of the demagogues who are ready to declare a trade war against our friends—weakening our economy, our national security, and the entire free world—all while cynically waving the American flag.” (Reagan, 1988) The first part of the quote about being “ready to declare a trade war” certainly fits former president Trump, whose trade policy and bombastic rhetoric propelled the US into a trade war with multiple nations at once.
Whether out of conviction or convenience, Trump praises the free market despite his support for tariffs. In his first public policy book “The America We Deserve”, he argued that “the greatest threat to the American Dream is the idea that dreamers need close government scrutiny and control”. (Trump, 2000) Afterwards, he asserted that a mayor’s job should be limited to: providing “everyone with a good, free education and clean, well-stocked libraries” and making “sure the streets are safe”. Ensuring “reasonable regulation, but no more.” (Trump, 2000)
Trump is certainly no libertarian. In fact, he eschews the description: I’m not one of those guys who lives in the wilds and says we don’t need any regulations. Of course, we need some. But we’ve got to seek a reasonable level and stick with it. (Trump, 2000) However, as a businessman Trump understands that burdensome regulations and taxes are likely to kill any economy. The free market, which stands for competition, is a far better “policy” than any other policy a bureaucrat could come up with. Whether in education or in the market for goods, consumers are better off when businesses are competing against each other.
How come this logic does not apply to international trade? For Trump, free trade has been an unequal exchange. Other nations such as Japan, Germany and, especially, China have reaped the benefits from trade at the expense of the US: “America has been ripped off by virtually every country we do business with. We need to renegotiate fair trade agreements”. (Trump, 2000) China, according to Trump, epitomizes this unfair trade. Not only are agreements between the US and China unequal but also China engages in a series of predatory practices that put the US at disadvantage such as forced technology transfers, intellectual property theft, currency manipulation, etc. In other words, the Chinese gain access to the American market and repay Americans by engaging in unfair and outright criminal practices. And what does America get in return? Well, according to Trump a couple of companies get access to the Chinese market. However, the average American gets nothing from it.
“It’s always this way with China. We give the Chinese regime everything they ask for in trade, technology, market access, and cash reserves—and what we hold back they steal anyway. In exchange, a relatively few American corporations, like Boeing, Hughes, and McDonnell Douglas, get to compete with Airbus Industrie and other European corporations in currying favor for Chinese contracts. But what’s in it for the average American? Nothing—especially when our security is threatened.” (Trump, 2000)
Put simply, a few, the “elites”, have gotten rich at the expense of the many. Outsourcing and offshoring have enriched a few people, killing American manufacturing in the process. This was reasserted in Trump’s speech in Monessen, Pennsylvania. Skilled craftsmen and tradespeople and factory workers have seen “the jobs they love shipped thousands and thousands of miles away”, declared Trump in 2016 during a campaign speech at a metals recycling facility in Pennsylvania.
Robert Lighthizer, the former US trade representative in the Donald Trump administration, in his latest book “No Trade is Free” advanced a similar argument. For Lighthizer, Democrats and Republicans have pursued a careless trade policy, which put the American workers at risk, in an attempt to “maximize corporate profit and economic efficiency” (Lighthizer, 2023)
For a short time, during his first campaign as a Republican, Trump identified as a conservative. Beyond this, he has not fully aligned himself with any specific philosophy or ideology. However, he has expressed strong support for the free market, and his political platform largely reflects free-market principles: limited government, low taxes, and competition. Nevertheless, he views international trade as a zero-sum game. He and his trade secretary argue that the consequences of “hyper free trade” are ultimately negative, suggesting that higher consumer prices are worth paying if they bring manufacturing and jobs back to America.
Source: https://austriancenter.com/is-trump-a-liberal/
