There was a lot of speculation last week about what Kamala Harris would do on trade policy (and various other policies). I thought this piece by Alan Beattie of the FT offered a very thoughtful and objective evaluation of where things might go on trade and industrial policy in a Harris administration.
An important aspect of this issue is who ends up advising her, both during the campaign and afterwards if she wins. My guess is that the Biden administration policy insiders and advisers are going to be pretty successful at putting themselves in positions of influence. That could signal a good deal of continuity between the Biden administration and a Harris administration.
At the same time, the situation in 2025 would be a very different political one than what the Biden administration has been faced with. If Harris beats Trump, Trump would then have lost the popular vote in three straight elections and the electoral college vote in two. That could lead to a shift in the Republican party: How much losing will Republicans be willing to take? And if Trump's influence diminishes, and the Republican party leaders are no longer ultra-protectionist, that could change how a Democratic president approaches the issue. (Also note that the makeup of Congress will be important here, and we have no idea what that will be.)
Of course, in recent decades the Democrats have been the more protectionist party (in terms of their political leaders at least), and that remains true today even though Trump has shifted the Republicans towards the protectionist side, so I'm not expecting a Democratic president to emerge as a free trade crusader. Nonetheless, Trump having less influence could provide the basis for a President Harris to diverge at least a bit from President Biden. Biden was worried, rightly or wrongly, that Trump's protectionism could have an impact on votes in certain important swing states, but that might not be as much of an issue going forward.
What I find interesting about Harris is that she has seemed skeptical of both tariffs and trade agreements. On tariffs, she has tied them to the price of consumer goods and emphasized their impact on ordinary Americans, saying this about Trump's trade policies back when she ran for the 2020 Democratic nomination: "this President continues to push forward what I call the Trump trade tax. This is about taxing American consumers. People are going to have to pay more for washing machines, pay more for clothing, pay more for shampoo. When we look at the trade policy he is conducting in terms of China, now with Mexico, it’s going to result in people here paying billions of dollars more a year for consumer products." More recently, she said this about Trump's proposed 10% baseline tariffs: "On the issue of the cost of living, Donald Trump says he will implement a ten percent tariff on all imported goods. Well understand, independent economists agree, his tariffs would increase the cost of everyday expenses for families, the cost of gas, groceries, and clothing." (More broadly, at a primary debate in September 2019, she said: "I am not a protectionist Democrat.")
The logic of her arguments about the impact of tariffs apply beyond Trump's tariffs, and her explicit and consistent recognition of their negative impact could extend to other tariffs. For example, although it is not focused on consumer goods, the Biden administration's push to convert the Section 232 steel and aluminum tariffs into a tariff-centered carbon emissions reduction regime has not been received well by U.S. trading partners, and isn't likely to reduce carbon emissions anyway (if you think it will reduce carbon emissions, feel free to walk me through how you see this happening!). That's the kind of trade policy I can imagine Harris revisiting, as there are many ways to reduce carbon emissions that are more effective options here.
On the other hand, she has opposed all the trade agreements she has been asked about:
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She said this about NAFTA: "I would not have voted for NAFTA, because I believe that we can do a better job to protect American workers."
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She said this about the USMCA: "after careful study and consultation with environmental and conservation leaders, I have concluded that the USMCA’s environmental provisions are insufficient—and by not addressing climate change, the USMCA fails to meet the crises of this moment. Californians know that the climate crisis is already here. Communities across our state have experienced exacerbated fires, storms, floods, and drought, and the devastation will only get worse if we fail to take bold and immediate action to address it. This agreement will set the standards for decades, and I believe Californians and all Americans deserve better and more immediate action. For these reasons, I oppose this deal."
- And there was this about the TPP: "As I’ve long said, I will oppose any trade deal that doesn’t look out for the best interests of American workers and raise environmental standards, and unfortunately the TPP didn’t pass either test. I also raised concerns at the time about the lack of transparency in the process.
So is there any kind of trade agreement she would approve of? She might not be interested in backing any brand new trade agreements, but I can imagine she might be proactive with some existing ones. For example, in the 2026 USMCA review, she could argue for adding a climate change provision to the agreement. And there has been a push from progressives to remove ISDS from existing FTAs and BITs, and I can see her supporting that.
It's worth noting that trade is not something most voters care about, so from a domestic politics perspective, it's probably not that important an issue and there won't be an incentive to do things. Politically speaking, there isn't much to be gained from a big new trade initiative, so why aggravate the small group of people who get aggravated by this? I suppose she could use it as a way to demonstrate that she is on the center left rather than the far left, but there are obvious downsides and she may not think it's worth the risk and hassle.
As to what her advisers might think, I've seen Mike Pyle mentioned several times as someone who is likely to be a top economics adviser in a Harris administration. Pyle was an adviser to Harris as VP, and then later served in the NSC with the Biden administration. He said the following back in June of 2023: "in a lot of respects, we don't see tariffs as being at the core of trade policy. We don't see trade policy as being at the core of international economic policy." (You can hear a recent discussion with Pyle on "The Rise of Economic Statecraft" here. He responded to the question, "Could you let us know how [Harris's] views on economic policy potentially differ from Biden's views?" at around 34:45; also check out the question on responses to China at 48:10.)
At the same time, many U.S. trading partners do care a lot about trade policy, so their views might be something that could influence a Harris administration in a particular direction. She's going to be looking for things from them on various international and foreign policy issues, and giving them something they want on trade policy -- especially if it benefits, or at least doesn't harm, the U.S. as well -- seems like a possibility.
Summing up, there's a lot of uncertainty about what a Harris administration would do on trade policy. Early speculation is fun, but it's hard to say what the world will look like in January 2025, so I won't be shocked if things go in a different direction than I suggested above.
