Donald Trump is infatuated with the 2016 election map, which underscores his dominance in red-coded rural counties. Candidate Trump repeatedly promised to “take care” of America’s rural voters who, in return, provided some of his biggest vote margins.
It’s ironic, then, that on issues from budgets to healthcare, America’s heartland stands to become an early and particular victim of Trump’s misplaced priorities. Nowhere is this more evident than with Trump’s wrongheaded, protectionist approach to trade.
With one-in-three acres planted for export, America’s farmers depend vitally on trade and open markets. Trump, however, has stressed restricting trade, with an emphasis on using trade protection to rebuild some idealized version of America’s 1950s manufacturing economy. This misguided focus — and the global backlash it’s creating — is making it much harder for America’s farmers, ranchers — and other exporters — to prosper through trade.
Undercutting exporters
Trump’s trade pronouncements — including his newly-announced and highly-protectionist vision for redoing NAFTA — are significantly undermining American exporters in foreign markets.
Trump’s repeated trashing of NAFTA is causing Mexican buyers to question the reliability of U.S. farm suppliers and to seek alternatives. Mexico’s government is actively encouraging this “Plan B,” sponsoring trade missions to link Mexican buyers with South American suppliers of soybeans, corn and other commodities.
This uncertainty is contributing significantly to reduced American farm exports to Mexico. During the first four months of 2017, U.S. soy meal exports to Mexico plunged by 15 percent, while chicken and corn exports fell by 11 and six percent, respectively. Mexico is the largest U.S. export market for each of these key products, making declining sales a major concern for American agriculture.
Squandering opportunities; motivating competitors
During the campaign, Trump boasted that he’d eliminate Japan’s high duties on U.S. beef in “one day.” Instead, one of Trump’s first presidential actions was to withdraw from the Trans-Pacific Partnership (TPP). The TPP would have provided a big boost to U.S. exporters — slashing thousands of tariffs and other barriers on U.S. farm and industrial products, including Japan’s high duties on U.S. beef, pork, grains, fruits and vegetables. Trump threw away these hard-won openings for America’s large and small exporters and got nothing in return.
Worse yet, Trump’s actions have spurred other countries to redouble efforts to reach trade deals that benefit their economies — and exclude America’s. Japan and the European Union recently announced agreement in talks — that were near collapse last year — on a comprehensive new trade agreement. Among other things, the deal would provide Europe’s farmers with the extensive access to Japan that U.S. farmers would have enjoyed under TPP. Meanwhile, the remaining 11 TPP countries are moving forward without the United States.
Erecting barriers, undercutting global rules
Trump is reportedly “hell bent” on imposing punitive tariffs on steel, aluminum and other products because he thinks his base “likes the idea” of a trade war. While tariffs could serve Trump’s political aims and narrower interests, like steel companies and unions, they would significantly damage U.S. exporters and the broader economy.
Steel tariffs, for example, would raise costs for countless downstream users in construction and manufacturing, which employ millions of U.S. workers (compared with 140,000 steelworkers). With tariffs, consumers and farmers would pay more for cars, trucks and canned beer.
Impacted trading partners would almost certainly retaliate through targeted duties on U.S. exports, and food and beverage products like bourbon, orange juice and dairy would be a particular focus. Moreover, if the administration limits imports under the “national security” exception to global trade rules, other countries could take the same approach to restricting U.S. trade based on vital national priorities, like food security or climate change.
Eroding the American brand
Trends in tourism — a $1.6 trillion U.S. sector in which foreign consumers literally vote with their feet — underscore the broader damage that Trump is doing to America’s global brand. According to the location intelligence company Foursquare, America’s share of international leisure travel fell “dramatically” from October 2016 through March 2017 — plunging 11 percent for the period and 16 percent in March alone.
Tourism Economics projects that U.S. tourism will drop by almost 7 percent in 2017 and 2018 — with a loss of some 107,000 jobs — and finds that Trump’s restrictive policies are to blame.
Thinking small; playing favorites
Finally, much of Trump’s touted success on trade is decidedly small bore — often more “fake policy” than real substance. Trump’s ballyhooed breakthroughs in saving jobs at Carrier, securing arms sales to Saudi Arabia, or opening China to U.S. beef, for instance, are far from the “herculean” achievements that Trump suggests.
Trump’s transactional approach to trade — along with his protectionism for chosen manufacturers — suggests a trade policy guided more by favoritism, photo ops and corporate cronyism than the broader national interest.
Trump owes his election to rural America. But, on trade, Trump’s policies could hardly be worse for America’s farmers and ranchers — and the tens of millions of other Americans whose livelihoods depend on trade. It’s time for America’s traders and their congressional representatives to push back, by resisting damaging protectionism and insisting on an optimistic and opportunity-based approach to American trade.
Perhaps Trump should put away his election map — and open up a global one.
Ed Gerwin is senior fellow for trade and global opportunity at the Progressive Policy Institute, a think tank that aims to develop new proposals for stimulating U.S. economic innovation and growth; equip Americans with the skills the knowledge economy requires; modernize an overly-bureaucratic and centralized public sector and defend liberal democracy.
The views expressed by contributors are their own and not the views of The Hill.