This is my second post about the questions for the record with U.S. Trade Rep. Jamieson Greer from his April 8 Senate Finance Committee testimony. Senator Warren (D-MA) asked this question:
In the last recession, 700,000 American workers lost their jobs each month. While the President has paused the reciprocal tariffs he recently levied on America’s trading partners, the future of tariffs under this Administration remains unclear. The tariffs are paused for now, but presumably in 90 days, sweeping tariffs will go into effect that could have devastating effects on our economy and the jobs that hardworking Americans rely on. This Administration has not prioritized protecting American jobs, which should be a primary objective of our trade policy. If 700,000 Americans lose their jobs in a single month as a result of the President’s tariffs and trade war with China, will the Administration reverse course?
A. If 1,000,000 American workers lose their jobs?
B. If 2,000,000 American workers lose their jobs?
C. How many Americans would have to lose their jobs before the Administration reconsiders its trade policies?
I am curious about this question myself, but Greer's response goes in a different direction:
The reckless and dogmatic pursuit of “free trade” by Washington insiders during the late 20th and early 21st centuries resulted in the U.S. becoming the importer of last resort, with other countries basing their economic growth strategies upon excessive reliance on U.S. consumers. This global predation caused persistent and increasing U.S. trade deficits and the loss of 5 million American manufacturing jobs and 90,000 factories since 1994. I applaud the President for taking bold action to end this madness and put America on a solid economic footing.
The reason I'm raising this exchange is to note that Greer's answer involves similar language to what we heard from his predecessor Katherine Tai, who once referred to the "unfettered" liberalization of "the past many years and decades." Greer's characterization is along the same lines: "The reckless and dogmatic pursuit of 'free trade' ... during the late 20th and early 21st centuries." Now, I don't know how this plays as a talking point in politics, although from what I can tell from the polling, Americans tend to (1) not care much about trade and (2) be mildly pro-trade these days. Regardless, as I see it, U.S. trade policy in this period did not reflect either a "reckless and dogmatic pursuit of 'free trade'" or "unfettered" liberalization.
If those are the wrong terms, what are the right terms to use here? It's hard to come up with the perfect description, but when we think about U.S. trade policy during this era, it's clear that what we are talking about is some moderate degree of protectionism. In the Tai post I linked to above, I mentioned these examples:
- Ordinary tariffs in the U.S. tariff schedule
- Trade remedy tariffs (AD/CVD/safeguards)
- Regulatory protectionism such as the U.S. country of origin labelling for beef statute/regulation (not all country of origin labelling measures are protectionist, but this one was)
- Protectionist restrictions on international trade in many service sectors
- Buy America government procurement policies
- The Jones Act
Unfortunately, it's hard to be precise about all this in terms of the degree of protectionism. It would be nice to have a simple numerical value, but we don't have that. Some people point to a low U.S. applied tariff rate as evidence of how free trade-oriented the U.S. was, but that's misleading for two reasons. First, it ignores the wide range of non-tariff barriers. And second, with regard to tariffs, when there is a high anti-dumping rate (say, 744.81% for Slovenian mattresses), there are two problems that arise: (1) a very high duty shuts down all trade in the product, which turns into a zero in the calculation of the tariffs being applied; and (2) anti-dumping duties don't show up in the tariff schedules, so it counts as zero there as well, which throws things off if you are calculating tariffs based on what's in the schedules.
As a separate point about the policies being pursued in this era, it's also worth noting that trade agreements during this time often had a "geoeconomic" component to them, so it's not as though free traders were running the show all by themselves. Foreign policy considerations were driving some of this, including the choice of negotiating partners. (Some of the more pure free traders were even arguing that trade agreements weren't a good approach to trade liberalization, and that we should just do free trade unilaterally.)
Summing all this up, the narrative that there was "unfettered" liberalization or a "reckless and dogmatic pursuit of 'free trade'" is out there, but it is not a good reflection of actual U.S. trade policy during the late 20th and early 21st centuries. It would be nice to steer the public discourse in the direction of more nuance about the policy during this era, which is what I'm trying to do here, but it's an uphill battle. Back in 2023, the Washington Post editorial board proclaimed that "[t]he era of unfettered free trade is over." I think it's worth pushing back whenever people use that sort of characterization, because it's hard to have a good debate on the future of trade policy if people don't understand the past.
