WHAT THEY MEAN:

We re-started this “Trade Fact” service just over three years ago, in October 2021. Here’s our opening paragraph:

“PPI re-launches this Trade Fact series under the political equivalent of storm warnings and lowering clouds, in the U.S and worldwide. Looking abroad, publics appear more tempted than at any time in decades to believe that their country’s gain must entail another’s loss. Looking inward, they seem increasingly at risk from authoritarian populists and illiberal political parties. And on a different level of analysis, trust among big-power governments has eroded; and the institutions and agreements built up since the Second World War to safeguard security and promote shared growth — whether NATO, the World Trade Organization, the European Union — accordingly seem ever more fragile.”

Events since have amplified the alarm we felt then. Last week’s election is very much among them, and we expect to say a lot about its implications in the coming weeks and months. Today in this 157th Trade Fact edition, though, we’d like to look back at some of the reasons we believe the election ended as it did, and then offer a thought about our own next steps.

First, though, a note of appreciation for President Biden. Through a half-century in public life, he set an example of good character, family values, commitment to public service, belief in American policy as a force for good in the world, and respect for democracy and the rule of law. In office these last four years, he very much lived up to the President’s role as the public face of the United States to the world, and as a role model for American young people. These qualities are easy to take for granted, but badly missed when they’re absent. Our friends who served in his administration — including a number of young PPI alumni — should be proud of their work.

Now to reflect on last week. The administration was aware of the drift of working-class American opinion toward radical-right populism, and wanted to respond with economic policies focused on working-class aspiration. Here, though, we had major differences with some of the choices it made, and believe our concerns were well-founded. We raise this not (or not only) to record dissent on important matters now in the past, but because we believe American liberalism now needs a very different approach. PPI President Will Marshall’s op-ed last Friday in The Hill looks at this in some depth, covering issues from student loan forgiveness and anti-trust to the gap between the large spending bills designed for specific national goals — for instance, on rural broadband deployment — and the slow, inefficient delivery of services hampered by bureaucracy, permitting rules, and unnecessary interest-group benefits.

Trade policy and America’s place in the global economy, the core focus of this “Trade Fact” series, are an important example. In attempting to understand working-class concerns and designing a response to them, the White House relied heavily on advice from officials of industrial unions and academic-left theorizers about “alternatives to neoliberalism,” and made a sharp break with the liberal-internationalist tradition of economic policy. Announced as doctrine in an ill-starred 2023 National Security Council speech, in practice this mainly meant decisions not to act: keeping the Trump administration’s tariffs in place and continuing its decision to block renewal of the WTO’s Appellate Body, renouncing market access for U.S. exporters as a goal and deciding against an affirmative China trade policy, letting the Generalized System of Preferences lapse, and dropping historic U.S. positions on promotion of digital trade and free flows of data.

Though these decisions did distinguish the Biden administration from the — politically and economically successful — Clinton and Obama eras, they didn’t work. Taken individually, they meant missed chances to promote growth and take full advantage of America’s strengths, particularly in new technologies; to reduce the cost of living for working families and offset the inflationary effect of the Trump-era tariffs; to help lower-income countries grow and reduce poverty; to promote the rule of law in the global economy; and to strength American alliances. Taken as a whole, as we warned immediately after the 2023 speech, the approach conceded so much ground to Trumpist isolationism that even Vice President Harris’ valiant and often inspirational fall campaign, with its concise, forceful, and entirely accurate attack on Mr. Trump’s proposed tariff hikes as a national sales tax, couldn’t win it all back.

Looking ahead, we will need a different strategy. In the coming months and years, PPI will argue for a return to a revived liberal-internationalist tradition, updated to address the economic, technological, environmental, and national security challenges of the later 2020s and 2030s and matched by appropriate domestic policies. At the same time, to the extent the incoming administration implements the neo-isolationism and resentful economic nationalism its campaign promised, we will be sharp critics and will catalog its results as they come in. In both areas, the commitment of our launch statement to liberal values — open markets and liberty, to activist but efficient and low-cost government, to special concern for the poor, to American leadership in the world — is unshaken. Here’s our optimistic close from the 2021 launch, which we believe holds up today:

“To ignore storm warnings and lowering clouds is reckless. The proper response to them is to identify those parts of a roof or a wall that may leak or give way in heavy weather, shore up their weaknesses or replace them with something better. It is equally important, however, to identify areas of strength, build upon them, and draw on the lessons they offer. In such things one can see breaks in the clouds, patches of sunlight ahead, and foundation for PPI’s belief that the liberal project remains vital, successful, and worth defending.”

FURTHER READING

Will Marshall in The Hill last Friday.

Trade Project highlights from these past three years:

Ed Gresser on the successes and gaps of Bidenomics.

… and the ominous error of the 2023 departure from liberal internationalism.

Laura Duffy on tariffs as a poor form of taxation.

Yuka Hayashi on “near-shoring,” Japan’s heavy-industry investment in U.S. production, and pooling allied strengths.

Elaine Wei and Gresser on the anti-female bias of U.S. clothing tariffs.

Malena Daily and Gresser on duty-free cyberspace.

And some Trade Fact Highlights, from high-seas pirate attacks and sexism in underwear tariffs to vanilla cultivation, forced labor, toasters, U.S.-Mexican auto trade, Arctic sea ice cover, tiger recovery in Thailand, the U.S.’ poor 21st-century infant mortality record, submarine cable and satellite deployment, Pacific Island trade strategy, U.S. digital-economy growth, international manufacturers in Ohio and container ship launches, bluebirds, earthworms, tall buildings, Lao v. Sima Qian in the first-ever globalization debate, and Valentine’s Day roses.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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