[CTC] Democrats struggle to present a united front on Trump’s trade war

[Arthur Stamoulis]

https://www.washingtonpost.com/business/2019/08/07/democrats-struggle-present-united-front-trumps-trade-war/ <https://www.washingtonpost.com/business/2019/08/07/democrats-struggle-present-united-front-trumps-trade-war/>

Democrats struggle to present a united front on Trump’s trade war
By Jeff Stein
08/07/2019

Democrats are divided over President Trump’s increasingly confrontational approach to trade with China, a surprising lack of unity for a party that has stood starkly against most of the president’s positions.

Several of the party’s leading presidential hopefuls have railed against Trump’s trade war, accusing the president of confronting China erratically while causing needless economic pain. But they are also arguing that they would prove tougher on China than Trump, a message that may be hard to reconcile with their vows to ease or reverse the damage caused by the widening trade war.

And some top Democratic lawmakers have only egged him on, as Trump took an action this week — deeming China a “currency manipulator” — that they have long advocated.

“They’re stuck. They want to say the dramatic steps taken by the Trump administration haven’t been effective, but they also say we need to renegotiate with China,” said Ernie Tedeschi, who served as a Treasury Department economist in the Obama administration. “With trade wars, there’s a tension between helping domestic manufacturers and keeping pain away from consumers. That’s their dilemma.”

On other issues, such as immigration, tax cuts or sustaining the Affordable Care Act, Democrats have been able to demonstrate a broad consensus against Trump’s policies, even if they have differences among themselves about the best way forward. But as trade becomes a bigger and potentially more calamitous issue going into the election year, with the stock market seesawing and the economy slowing, Democrats could face louder calls to better define their plans and how they differ from Trump.

The tension in part reflects the disparate impact of Trump’s trade war on key voting blocs, analysts and experts say. Union steelworkers, for instance, want the next Democratic president to maintain Trump’s tariffs on imported Chinese steel, which have made the steel business more profitable.

But Midwest farmers are pushing for what amounts to the opposite, demanding that the next Democratic presidential candidate resolve the trade conflict so they can resume exporting their products to China.

The Democratic presidential campaigns say they can overcome internal conflicts by arguing that Trump’s trade moves have proved largely unsuccessful, noting that the trade deficit has only risen under his administration and pointing to studies suggesting outsourcing has increased, as well. They say they’ll do it better, though exactly how they would accomplish this remains unclear.

“The problem is that, if you’re not listening carefully, Trump correctly identifies the symptom of the trade problem, and the data is the data,” said a trade adviser to Democratic presidential campaigns who spoke on the condition of anonymity and was not authorized to speak publicly. “The challenge is making people understand his solution is not the real one.”

The economic battle between the United States and China flared again last week, when the Trump administration vowed to slap 10 percent tariffs on $300 billion in Chinese imports in September after negotiations had faltered.

China responded by allowing its tightly controlled currency to depreciate in value, which could hurt U.S. producers by raising the cost of the dollar. The Trump administration retaliated on Monday afternoon by labeling China a “currency manipulator.”

An international trade war raising costs for U.S. consumers and imperiling economic growth may appear to be perfect fodder for an opposition party heading into a presidential election cycle.

Part of Democrats’ challenge is that Trump has taken some actions long demanded by labor unions and the party’s liberals, who have for years called for the government to take stricter action to curb Chinese trade practices. Many of the Democratic candidates have offered few concrete pledges to undo specific trade enforcement actions taken by the president, and some of their policy prescriptions would be difficult to enact.

As a result, the party’s presidential hopefuls have sometimes appeared unable to exploit what has consistently proved to be one of Trump’s most risky gambits in the White House.

On Monday, the U.S. stock market sustained its worst losses of the year amid global investor uncertainty about Trump’s next move. None of the top 10 Democratic presidential candidates, as measured by Quinnipiac’s latest polling, commented on the issue on their Twitter accounts that day.

“They are conflicted. On the one hand, they oppose the harm from Trump’s trade war and how he has waged it,” said Steven Kyle, an associate professor of economics at Cornell. “On the other hand, they used to be on his side of this and, in some cases, have long supported using tariffs to confront China. It is a tension.”

The Democratic campaigns argue they will try to draw a difference with Trump on trade.

On Friday, former vice president Joe Biden slammed Trump’s “irresponsible tariff war” for hurting farmers, workers, and consumers. Biden has argued the U.S. should instead work with Europe and other Asian countries to form a coalition that would exert stronger pressure on China, an approach similar in theory to the Trans-Pacific Partnership proposed under President Obama but later scuttled amid Democratic opposition. Biden has said he would renegotiate the TPP if elected.

“We do need to get tough with China,” Biden said in a July speech, after blasting the president’s tariffs as causing severe pain and “pointless.”

Biden’s campaign would not address directly whether he would roll back tariffs if elected president, but a campaign aide, speaking on the condition of anonymity because he was not authorized to speak publicly, said: “You would be safe extrapolating his approach would be significantly different.”

Sen. Kamala D. Harris (D-Calif.) has similarly repeatedly assailed Trump’s tariffs as a “trade tax,” arguing that the “so-called trade policy” has led to billions in additional spending by American families on necessary household items. Harris in August 2018 joined Sen. Dianne Feinstein (D-Calif.) in urging Trump to “rethink its escalating tariffs and instead urgently convene negotiations with China," but has not appeared to release a more detailed policy since.

Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) have spoken favorably about Trump applying tariffs to China, as many labor unions have been supportive of the president’s efforts. But the candidates have also argued they would do more for American workers in negotiations with China, in particular vowing to promote union rights and curb environmental damage.

That matches the approach of many of their Senate colleagues, including more moderate members. Senate Minority Leader Charles E. Schumer (D-N.Y.) has long called on the Trump administration to label China a currency manipulator. Sen. Sherrod Brown (D-Ohio), who won reelection in 2018 in a state won by Trump, has spoken positively about the tariffs and helped block a Republican-led effort in 2018 to weaken them.

Sanders has emphasized that he would sign an executive order ending federal contracts for companies that outsource, while also pushing to end tax breaks for those corporations. Sanders has also pushed Democrats to target companies like General Motors and United Technologies over outsourcing, and tried contrasting his record with that of Biden, who voted for the North American Free Trade Agreement. (Trump has targeted those companies over outsourcing.)

Warren recently released a trade policy to impose significantly stricter environmental and labor standards on trade deals, calling for trade deals to be negotiated by environmentalists, farmers, workers and small businesses, while using the United States’ “leverage to boost American workers and raise the standard of living across the globe.” Warren said in a post on Medium that “while I think tariffs are an important tool, they are not by themselves a long-term solution to our failed trade agenda and must be part of a broader strategy that this Administration clearly lacks.”

Sanders appeared to benefit in the 2016 presidential election for hammering former secretary of state Hillary Clinton over her support for free trade deals, winning Rust Belt states such as Wisconsin in the party’s primary.

But Democratic voters also have a complicated set of views on trade, with some opinion polling suggesting support for free trade rising despite the leftward drift of the party. Polling also suggests Democrats may oppose Trump’s trade policies because of their distrust of him personally, rather than because of the underlying policies he has pursued, said Celinda Lake, a Democratic pollster.

At the same time, majorities of voters, including Democrats, are also very worried about Trump’s latest tariffs and the economic pain they could inflict.

“Democratic voters are really of a mixed mind on trade,” Lake said. “It seems sometimes that they are responding more to political cues than trade cues.”

But that may be more true in some parts of the country than others. In Indiana, some labor unions such as the Alliance for American Manufacturing, which represents steelmakers, cheered when the president imposed tariffs to curb the dumping of Chinese steel into foreign markets.

“A lot of steelworkers who lost their jobs are going to credit Trump for getting tough on China,” said Chuck Jones, a former union leader at the Indiana Carrier factory who opposes the president and wants to see a Democrat elected. “I’m worried about it. Depending on who the nominee is, it could be a major problem.”

But other Democrats are pushing for the immediate resumption of sales of U.S. agricultural products to China, a market in free-fall since the trade war began.

J.D. Scholten, the Iowa Democrat who recently announced a campaign against Rep. Steve King (R-Iowa), said he worries that the presidential candidates are throwing away a key political opportunity in battleground states.

“Democrats absolutely need to be talking about this more,” Scholten said in a phone interview from an RV on the road to a rural farming community in the southeast part of the state. “This is drastically affecting us as Iowans. If we’re not out there talking about this, we could lose.”


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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