Donald Trump was riffing on trade, sounding very populists by shrugging off concerns about sparking a “trade war” with China, when he said: “My trade deal is very simple, I am going to make great deals for our country. It might be free, it might not be free.”
Well, which is it? The difference is a big deal.
A “free trade” deal would have little to no rules governing trade. Progressive populist critics of such deals argue free trade deals create a “race to the bottom” in which countries keep wages low and labor and environmental protections light to maximize competitiveness.
A “fair trade” deal seeks to codify a level playing field, so America’s regulations on wages, worker rights and environment rules can’t easily be undercut by other nations looking to keep the cost of production low. The idea is to lift up standards across the world so workers everywhere benefit.
Trump doesn’t say what principles would drive his negotiation strategy. He mostly just says “I am going to make great deals.”
Of course, since it is Trump, he says a lot of things, and you can pick and choose certain statements to make you believe he is on the same page as you.
His web page sounds populist, at least when it comes to China, as he promises to declare China a “currency manipulator,” end “China’s ongoing theft of intellectual property” and China’s illegal export subsidies and lax labor and environmental standards.” And he also likes to threaten steep tariffs as a negotiating tactic.
But he often sounds like he believes corporations should be allowed to keep their labor costs, and tax contributions, exceedingly low. His web page says he would “Strengthen our negotiating position by lowering our corporate tax rate” (emphasis added).
In a November debate he said “We are a country that is being beaten on every front economically … there is nothing that we do now to win … Taxes too high, wages too high. We’re not going to be able to compete against the world … People have to go out, they have to work really hard and they have to get into that upper stratum. But we cannot [have higher minimum wages] if we are going to compete with the rest of the world.”
If he’s willing to lower the corporate tax rate to strengthen our negotiating position, what’s stopping him from lowering the federal minimum wage as well?
And why would any assume his version of a “good deal” would try to lift wages and standards up across the globe?