Is Trump Pursuing Free and Fair Trade? No.

The Trump administration’s confident assertions that its objective in its ongoing trade negotiations is to lower international trade barriers raise the question of whether it is being truthful.  The protection of industry — long a Trump hobbyhorse — cannot be had if most tariffs are “reciprocal” and intended to be lifted during successful negotiations. Free trade pacts will not yield perfectly balanced trade; should all barriers be dropped, trade deficits, both bilateral and overall, will persist due to underlying economic and macroeconomic factors.

Trump’s tariff rates have the quality of quantum superposition: the President seems to think that the tariff schedule can function as if set to different rates at once. The fact is that different tariffs, set at different rates, will further mutually exclusive ends. A tariff for revenue (a lower rate, generally speaking) will sacrifice some degree of protective power and a tariff for protection (a higher rate) will not hoover up so much revenue. Yet, Trump nonetheless promises enough revenue to end the income tax as well as a great wall of protection to repel the competitive pressures of foreign goods.

Likewise, Trump’s protectionism has something of the quality of Schrödinger’s cat: duties are placed and paused, reimposed and benevolently halted for negotiating purposes, at times within the span of days. First markets panicked; now uncertainty has become endemic to the Trump economy.

The question of what ends the administration seeks remains. Even American trading partners  (now negotiating partners) cannot tell what the White House’s negotiators are after. Trump’s trade policy contains multitudes, yet a genuine desire for free trade — defined as low or eliminated tariffs and non-tariff barriers — seems absent.

In a recent hearing, Sen. John Kennedy (R-La.) inquired whether the White House would agree to total free trade on a bilateral basis if, e.g., Vietnam agreed to the same. Howard Lutnick, the secretary of commerce, said: “Absolutely not.”

Pivoting to Vietnam’s importation of Chinese goods, Lutnick lost Sen. Kennedy in rhetorical detours.

Kennedy sought to clarify: “You just said that if a country came to you and offered the ultimate reciprocity — no tariffs, no trade barriers — in return for us doing the same, you would reject that.”

“Of course, because they buy from China and send it to us,” Lutnick retorted. The notion implicit — that “free and fair trade” requires a country, particularly a small country, to produce all it exports domestically — ought itself to render suspect the secretary’s judgment.

And if Vietnam ceased to purchase goods from China? Kennedy probed. Of that Lutnick approved. But even Vietnam’s hypothetical excision of all trade barriers and spurning of China would not suffice. “What would you want to change?” Kennedy demanded. Here, the administration’s commitment to protection finally could not be dodged by the heretofore nimble Lutnick. “There are certain products we want to reshore,” he said, almost indignant at being asked the question. “We don’t want other people making them.”

There it was: free trade is not among the ends being sought. It was bananas, one might say.

None of this ought to surprise anyone. Actions speak louder than words, as the phrase goes. America’s heralded trade deal with the United Kingdom — the first of Trump 2.0’s trade deals — included the permanent imposition of a 10-percent baseline tariff. The UK’s average tariff on U.S. goods comes to 1.8 percent.

The old way worked. Under the liberalizing post-war trade regime(s), America became more prosperous than ever, and American workers became richer than ever. But protectionism has long held sway in the hearts and minds of men of system. Far from fading away with the East India Company, mercantilism has kept firm its grasp on the levers of power. The intermittent noises emanating from the Trump administration in favor of mutually free and fair trade should not deceive anybody.