Bonus: The new politics of trade
Hello, nerd casters Scott bland here coming to you on a Monday. We know that nerd cast listeners can't get enough politics. So we wanted to bring you an episode of a new show or doing, it's called global translations, and a digs into big global problems that politicians are going to need some creativity to solve. There's a great episode and they just did about the new politics of trade. Donald Trump has really scrambled things. And this is a great explanation of how politicians from both parties are responding. Hope you enjoy it. And we'll be back later this week with a wrap up of the first democratic presidential debate. Did you know the US has a surplus and services with the rest of the world worth two hundred and sixty nine billion dollars? America's economy has changed drastically and so has its trade relationships. There's a lot, we can learn if we look a bit closer. And that's why we need a more nuanced productive conversation on global trade as America evolves. And the global trade picture becomes more complicated. We are revisiting the debate over the topic. We'll have a special branded episode of global translations on June twenty-seventh brought to you by city. Stay tuned, wherever you subscribe to this podcast. Okay. Ben, let me tell you a story verge fighting. All right. This is a story about me in eighth grade involve your first dance. Yeah, no, this is a story about the late eighties in western Canada, where I grew up and around nine thousand nine hundred eighty eight Canada and the US we're talking about entering into a free trade agreement this was before NAFTA, and it was like super controversial. So you're telling me that you're out of a nerd and eighth grade. Yeah, I'm kind of a nerd, but to give you a census with such a big deal in Canada that it was actually part of our curriculum to have a school wide election around free trade. This was viewed as such a big deal in Canada. I don't even know if anyone in the US noticed, but in Canada. Everybody was hyper aware, I have absolutely no idea. What you're talking about. And I don't think or or I was just busy doing other stuff, like plant sports typical trying to imagine unit great. So here we were having. Our election. And I was assigned to be the leader of the protectionist party. Well, so you were the young Steve Bannon in this scenario. That's not quite how I would think about it. But okay. So is leading the protectionist party, and we have to come up with our campaign, and we decided to write a song, and it must have been around Christmas time because the song, we chose was the twelve days of free trade. And we set it to the twelve days of Christmas. Tune god. All right. So what happens on day one? How do you put that to music? Well, as you might expect on the first day of free trade. My true love sent to me, the end of environmental and labor standards in Canada. Let's too much, but you really got to sing that I think to sell it. I am not going to sing, but on the second day of free trade, it was the end of Canadian agriculture and all kinds of subsidies and protections for farmers. And of course, on the third day of free trade that was the end of Canadian culture and the end of Canadian books and movies, and by the fourth, and fifth day the America. Had come and taken all our oil. And by the end of the song, they took our water as well. Sounds like an apocalyptic nightmare that you were describing your, I guess, people were freaked out. Yeah. It really worked. Yeah. So I'm assuming you one, of course we won. And of course, we learned that, you know, when it comes to campaigning and messaging around trade, it's a lot easier to scare people and make the protectionist case than it is to make a coherent case for why free trade might be good Louisa. That sounds an awful lot, like what's played out in the United States over the last couple of years. The politics of trade are not as simple as my eighth grade campaign. But they're not that far off. There are winners and their leaders and today we're talking about the politics of trade in the air of Trump. And whether he has scrambled, the partisan politics around this issue from politico, this is global translations. I'm Louisa savage. Ben white was just providing snark on that story. He's our chief economic correspondent Ben, thanks for being here. Who is a good to be here. Snark is what I do Ben, you know economics, and, you know, politics. So tell me about the intersection of those two things when it comes to the traditional coalition that supports free trade. Right. So it used to be that you had mostly Republicans free market Republicans who were pro free trade yet. Some moderate Democrats pro business Democrats who pro free trade, and then you had the giant corporations and corporate America all gung ho about doing trade deal. So that was the historic coalition that generally got these trade deals done, but it's always been something of a moving target, because the politics are weird, and they're tough, and one case in point is Richard Trumka. I'm Richard Trumka. And I'm the president of the F, L CEO, which has twelve and a half million members of the United States. I came from a small mining town comes. The company owned everything in town, except to thinks of the Catholic church and the union hall. And so the union hall was the centre of all of our activity traditionally, they have fell CIO is voiced aligned with progressive Democrats against free trade, but weirdly, it now, finds itself at least in some ways, aligned with President Donald Trump. In fact, there was glee in his voice when we talked to him about how he played a role in killing the Trans-Pacific Partnership deal we talked about in the last episode. I remember before that agreement when we were talking to, to President Obama. He looked many is and said this trains, leaving the station and you'll either be on it or you won't be on it. And I said, we'll see how far the train gets and he tried to align himself with those Republicans and a few other a handful of Democrats. We are successful in having the, the agreement, analyzed and shown his weaknesses and how it. Would have perpetuated a bad model the model that started with NAFTA. And as a result, we beat it, and he's publicly praised Trump for making changes to NAFTA, which is something Barack Obama did not do and something Hillary Clinton would not have done. He talked about it with one of our producers Dave Shaw to get push back from people for engaging or for for for saying complimentary things. Of course. How do you deal with that? How do I do? Yeah, I say I represent my members if I can help get a trade deal working with the president that is good for this country. Good for the economy good for our communities because it saves the tax base. I shouldn't I do. And if you criticise me for that habit. I'm fair game. I'm into market and I'm a big guy in the pre 2016 political world, the easy shorthand was when it came to free trade deals, you'd have Republicans, and you'd have some Democrats to the elite Democrats or the business back Democrats, who would push a free trade and NAFTA new. Negotiated by President Bush, the first one, but signed by President Clinton. Have you seen a real -ment of how the parties are thinking about trade and talking about trade will we'll first, let's go back for second because the the way that they did that. And the Democrats helped those Republicans was say, if you grew disagree with this trade agreement your this dinosaur Neanderthal, that is so antiquated that evolution as passed you by don't even talk. You're not useful. We've changed that Trump has aligned and a lot of ways with one of the people, I spoke with Lori Wallich when I started working on NAFTA WTO, you had this philosophy that anyone who criticised these agreements was protectionist with nice salaciousness had to be ignorant. She's with the national consumer group Public Citizen, which was founded by Ralph Nader, and she's the director of what they call global trade watch. We had this interesting conversation about. How she hadn't set out looking to engage on trade, but trade found her Lori was interested in food, but trade deals kept affecting food safety rules in the United States. And so now she spends a lot of time with people on Capitol Hill. She's been doing this for half her life, and I asked her about what the conversations were like today, and how the politics had evolved, given the effect that Donald Trump has had on the status quo. I wouldn't say so much, that Trump change the Republican party, but rather Trump appealed to that base of swing voters who really don't have a party identity. They have a set of issues and concerns identity that can be attracted by people who will speak to what they already think, and feel while obviously, President Trump has shifted the party vis-a-vis his presidency and the staff, he appointed and he's, he's made it such the Republicans in congress are now in conflict. Picked between their president and their funding constituencies in the business world. That is all true. But in the countryside, I would say it has less to do with people moving their opinions or even their party affiliations. But rather they will go with whomever speaks to those issues and that gives you the bizarre phenomenon that s it was -sconsin night. I saw repeatedly of people who voted for Bernie Sanders in the primary and Trump in the general on the trade corporate concentration, I'm getting screwed economic inequality. Wait, where's my recovery? The big guys win that sat of narrative threads, I think is compelling and has been for a long time. So now when you go to the hill, and you talk to Republican members that a different conversation have they now been shifted in response to their constituents. I think they're two totally separate discussion. Is going on. There's China and there's everything else, the China issue has shifted. There is an honest to God shift there, I would say amongst policy elite amongst policymakers across the board. But if you look at the non China trade agreements, just look at the TPP, there still is, I would say amongst the Republicans for sure amongst the foreign policy sort of elite, not with the American public as we saw. Oh, so well, as how Trump exploited that issue to pick up states and democratic swing Obama Obama, Trump voters and win, but there is with even the NAFTA renegotiation debate the same polarization, that's largely partisan where you have the Republicans despite it being the president's agreement at cetera still advocating for the business interests. And right now you have a variety of Republicans, though restrained in there. Tone griping about things like they got rid of those investor tribunals that helped incentivize outsourcing. They're not going to say that in public. They're going to say different story about why the NAFTA renegotiation is for them problematic. The Democrats have basically stock largely on the non China stuff to the position they've always had which is if we can get the rules, right? Let's do some more trade agreements. And see if we can get the benefits of trade. That's why they're in a discussion with the Trump administration, the only discussion that's actually a policy discussion. That's viable is US lighthizer, and the Democrats in the house talking about what else would have to happen with the NAFTA renegotiated deal. So where our congressional Republicans on trade, we grabbed Burgess Everett who covers congress for politico and asked him. Is there a political constituency for this fight? There's like a real bipartisan thirst. And a surprising one. One to take on China and maybe weather short term pain, and farm states to, to sort of get a better deal from China on trade policies on intellectual property, all of these things that a lot of people voters politicians think that we've been losing on for a long time. So for people outside of the United States, trying to make sense of what's happening here in Washington. Do you get the impression that congressional Republicans in the house and Senate have they shifted on trade are Republicans still the party of free trade? I think that they would say, yes, but I have seen a definite shift. This was not, you know take take it back for years ago. Twenty fifteen Republicans have just taken the Senate. What's the big thing that they do in the last two years of President Obama? It's to pass this. TPA PA, this trade promotion authority that allows the president, negotiate new trade deals, the Democratic Senate of a year before that would not bring it up because Harry Reid, the majority leader then oppose that. And so that was the substantive difference in, in the last two years of Obama's presidency. Is that pro-trade Republicans with a minority of pro-trade Democrats were passing this stuff over the objections of the democratic leader in the Senate? It was really quite unusual. And now instead, what we get is a, a constant push pull with Republicans on the president, President Trump, and they end up praising him for withdrawing threats that wouldn't have been there in the first place if he didn't bring them up. So it's, it's a totally different dynamic in the party. Then we. Saw four years ago. And most of us didn't necessarily see trade becoming sort of the issue of the day until Trump started leading that Republican primary in part by campaigning against NAFTA. He see any substantive issues among Republicans, or is it purely the convenience of getting reelected winning a primary and supporting the president. So I do think it's more of a political question than it is ideological. I mean you could even debate what a conservative is in the Trump era, a lot of folks and organizations that you would say were ideologically, conservative before seemed to be conservative, only in the sense that they want to support the president, and that not supporting the president is not a conservative position anymore. So one of the people who's caught right in the middle of this weird situation. The Republican party finds itself in is Chuck Grassley Republican of Iowa chair of the Senate finance committee, and from a state that is absolutely getting slammed by a lot of the trade wars are huge export of cultural goods. So Grassley is worried about the impact on his home state. So also worried about not upsetting. Resident and wants to support him but it's challenging spot for him to be an and he's having some trouble negotiating it. Okay, Ben, I'm ready. I asked him if he thought it was a mistake to abandon the TPP and to go it alone with China. It was a mistake from my point of view. But on the other hand, he he ran on that. And one on that, so if there's any one thing you might agree or disagree with this president on his particular policies. You got to admit and, and be thankful for the fact that this is a president. They ran on a platform and whereas most presidents run on a platform. They don't stand on that platform. This president is standing on that platform, even if it wasn't a great platform. He got elected on it. You expect people to keep their promises once they're elected. Do you think the President Trump has changed the Republican party from a free trade party to one? That's more supportive of protectionist measures if he. Leaves in tariffs as a tool to get to negotiation as opposed to being a end in themselves, then he hasn't changed anything. If he has us tariffs because he believes they're good. And I know he says that, but I don't believe he actually believes it. I don't see how he could believe it. He has only he hasn't changed the Republican party. We're still a party of free trade. What gives you confidence that Trump doesn't actually believe that tariffs are good and an end to themselves. I mean he's been saying for many years that they're good. And that, you know, we're bringing in hundreds of billions of dollars on tariffs. Why do you have confidence that he doesn't actually believe in tariffs as an end in themselves? I'm not in his head. So I can't answer that question. But I surely hope that he has learned from history that lower tariffs are good. Now, I have heard him say something along this line that leads me to believe that he wants lower tariffs, and that is that when we said to him. Several times last year. Not so much recently, we don't want to trade war. He says something along the lines. What do you mean? You don't wanna trade war. We've added trade war, and we lost. So he wants to do something about that. And then he would say something along the lines of, well, we've had free-trade since World War Two we've helped arrests the world we're going to look out for cells now. And if the rest of the world wants free trade, then let the rest of the world, get their tariffs down, and I happen to agree with him on that point for seventy years. We had lower tariffs to help revitalize the, the world economy after the devastation World War Two, and so we kept our tariff slow to help other countries. But now it's time that there's a level playing field for American trade. So Ben which. You say that Republicans are what they're in a bind. They've been persuaded not persuaded. What's going on in your mind with the Republicans, I think Republicans are fooling themselves here if they think that President Trump is only using tariffs as a tool to get better trade agreements. I think he's also using them because he thinks they're really good things. Coming up the political balancing act facing the Democrats more in a moment. Global trade is complicated, but it's often discussed in a simplistic way. America is up. It's down. It's winning. It's losing the US economy. Looks much different than it did thirty years ago. So why hasn't our understanding of global trade changed with it? We don't even have a common definition of what trade is today. And in fact, you know, when we look at the US, the US actually runs a trade surplus when it comes to the services component of what it does. Yes. A surplus people get a little bit wide eyed, when you actually tell them that far and away the most dominant contributor to jobs, or the economy, or economic growth is, in fact, disservices component. There's a bit of surprise there. We'd find a lot of surprising nuances to trade. If we just looked a little bit closer. I'm Carol Zimmer. Stay tuned for an upcoming special. Branded episode of. Mobile translations brought to you by our sponsor city. We will be revisiting our understanding of global trade, we'll hear from two executives of global companies who are riding the shift to services in the US economy on the global economy, the CEO of city and the CEO of AT and T stay tuned for the final trade episode of global translations on June twenty seven. This Trump trade policy is putting Democrats in an awkward position. Right. I mean, here's the party that traditionally has criticized trade deals watering-down, environmental labor protections and not caring enough about domestic workers, and leading to the outsourcing of jobs and offshoring. And I remember during the democratic primary when both Barack Obama and Hillary Clinton were promising to renegotiate NAFTA. And of course they didn't, but Trump did under percent flipping the script there in this weird position of having to generally agree. Most of them. Anyway, generally agree with what Trump is largely after which is protecting workers and labor agreements and environmental protections. But really disagreeing strongly and sharply with the way Trump is doing it, and it's not easy for them to do presidents done this wrong. We grabbed Ohio democrat Senator Sherrod Brown in a hallway in the capital. The president started off by focusing on western Europe. And, and Canada instead of working with our allies to focus on, on China. The president doesn't seem to understand it tariffs or temporary tool to get to a long term plan in a long term solution instead tariff seems to be the solution to him, and it causes pain. But it causes pain for a much longer period of time too far more Americans than he needed to. I still hope I hope it works. I hope his, I, I hope that we get a good agreement out of this, but it's not clear at this point. It's definitely an issue on the campaign trail among the two dozen or so democratic candidates. My name is not see, I cover foreign policy for politico. I'm Holly Rabin and I cover Bernie Sanders presidential campaign for politico name is Alex Thomson. I'm the warned beat reporter for politico. We canvas some of the meme. Politicos twenty twenty reporting team about how trade is playing on the trail. Bernie Sanders has already gone after Joe Biden, on trade, very shortly after Joe Biden announced his presidential campaign, Bernie, started hitting him on this started saying, you know, when Biden voted for an after I voted against it throw voted for after permanent noble tribulations trade agreements with try led the. In was a vocal proponent of the DP I was against it Elizabeth Warren was also against TPP. She bucked her party's leadership back in twenty sixteen and was very aggressively campaigning against the TPP, even while the ministration was going for it. And so, I think in this issue, they see both a ideological difference between Biden and the more progressive candidates, such as Bernie and Warren, and they also see an opportunity to kind of, like take a wack at his overall argument in the campaign that he's the most electable candidate that he is the most likely to beat President Trump. I think if you look at those record and you look at my record, I don't think this question about who's more aggressive on the campaign trail, when Warren is asked about China, she does not necessarily criticize the Trump administration's final goal with confronting China factor. I think she option critiques China. Has a bad actor on the stage. What she disagrees Moore's the means of his confrontation, the tweets the disorganized nature, what she perceives to be this organized nature of it. And so, when she talks about China, she is also being white grunts lines of bad actors on trade. And that our best way to fight back is with strength. And with a parent plan to something that actually goes beyond China with regards to her and Trump in that she sees Trump as a fake populace, but their rhetoric on a lot of issues, especially around trade around manufacturing and the rust belt or act is actually quite similar when Biden has been offered a chance to talk about China in recent weeks. He has tried to stress American straits instead of trying to point out to the dangers China poses. He's basically been saying, look, we're America. We can take care of these guys. They are not a real threat to us. We just need to deal with them in a smart way you had in both parties of the extreme left and extreme. Right decide to move away from globalization. It can be harnessed. We can compete with anybody, anybody in the world Trump and his aides have said for so long. He is the first president to really really stand up against China. He's been willing to use sanctions. He's been willing to us tariffs. So what you have that as people saying, yes, look, he's tough Trump is tough. He's calling them out. He knows we're gonna go through some pain, but he's going to he's calling them out Biden side says, look all he has to show for it is a bunch of mean tweeds. He doesn't have a deal yet with the Chinese the tariffs. They're going to hurt Americans economically in the long run. Trump is just bluster. He's just tough Joe Biden is tough. But smart people's opinions on trade or changing, and I think a lot of it is changing, because people vote, many voters do not like Trump, you know, in such a strong and passionate way. And so I don't know if the same dynamics are going to be there in twenty twenty still, there's many, many people in the midwest who feel as though free trade deals like NAFTA and. PP hurt them. But you also have this anti-trump backlash going on by is trying to be tough for lack of about award on China, but not lose the capacity to work with the Chinese in the long run on issues that he believes we need their help on, for instance battling climate change for instance, countering, Iran, his point of view, and his campaign's point of view is more long-term. They just feel like you cannot completely alienate the Chinese because they are going to do a lot of what they're going to do. They are on the rise. They're not going to back down just because you're mean to them. So you have to find you have to leave some space to be able to work with the Chinese, but again, that when you're talking about campaigns and sound bites that's sort of like nuanced message just doesn't work very well. It's so much easier for President Trump to be like, I'm tough on China. Anna. And when Biden comes out there, and it's like, well, I'm tough, but blah, blah, blah, blah, blah, blah, blah, it's just such a difficult message for voters to gobble up. So what are the Democrats trying to thread, this really difficult needle is congressman Tim Ryan, he's from northeast Ohio. He's one of the twenty four so people running for the democratic nomination though you could certainly be forgiven for not knowing that or being able to pick it out of a lineup. I ran into him at a gathering of top, echelon financial and political types in Los Angeles at the Milken institute, global conference recently, which is a gathering of globalists, and Tim Ryan was there to talk about his own views on trade. That sounds on shaina like you're at least somewhat aligned with what the Trump administration's trying to do you know sort of stop with the Chinese do on intellectual property theft and forced technology transfer and just breaking the rules all over the place. Have you been supportive of their efforts in dealing with the Chinese and the way they're dealing with them? Yeah. On on. On on some of these issues. The president has gotten his gotten the idea, right? He hasn't done it the right way. But when you look at what China's doing, they have dumped steel in communities like mine. I've been fighting that for seventeen years in congress. We've gotta make sure that they do enforce the anti-dumping provisions countervailing duties for, for, for those products that are coming in. But the ultimate Lee at the end of the day, we've got to outcompete China. And that's and that's where the president is completely missed the Mark here. We're not doing anything around the electric vehicles. They dominate forty percent of the market. We're not doing anything around solar. They dominate sixty percent of the market, AI additive manufacturing. They're doing. They're pumping money in and we're not doing anything in the president's asleep at the switch on these issues. So while I agree with a couple of things that he's doing I think he has no long term plan or agenda and it changes day by day, which provides a lot of instability to our country, especially in rural America, where farmers have made a profit in five years the. President has made it worse. What is the democratic party's position on free trade right now? Well, I think the, the party has got recognized that the trade agreements that we've signed in the past have completely wiped out communities like the ones, I represent the factories closed, and went to Mexico after NAFTA, the jobs, the investment, you know, we're still feeling the consequences of that, and nobody gave a damn is there a fundamental realignment of the idea that, you know, free trade is generally good. And while there's some dislocations, ultimately leads to better economic growth and better outcomes for a lot of people is that now just being completely rethought. And that are we at the end of the of free trade as a good idea in both parties in the United States. Or are we just trying to figure out how to do trade deals, going for I think it's, you know, it's clear that, that trade increases wealth. The problem is it's concentrated in the aggregate does not help. Youngstown. Ohio, in the aggregate does not help Gary, Indiana, or a lot of these textile communities in the south so modern trade regime is going to have both an understanding of what these communities are going through in the workers are going through, and their families are going through and the importance of being engaged in the world. Let's have this longer term view of the world, which would include a deeper understanding of how trade affects everybody in the country has the tide of globalization and reduce borders, increase pre-trade kind of come to an end in an era of nationalism. Or is it just, you know, in real linemen and in transition? I hope it's in realignment, and I and I hope there is a new approach to do it. I mean part of why it why you get the backlash in Europe in Hungary, and Poland in America is because we have failed collectively to address the needs of our citizens period. It's that simple. You can't you. Have communities implode and the corporate elites don't really give a shit about anybody, but their bottom line and think that somehow they're going to be able to go keep keep the system running just as feeding them like so much. Thank you for joining. Thank you. But before we get to any voting in the twenty twenty elections, this is all about to come to a head this summer. I talked about that with Burgess Everett once again, on Capitol Hill. So if you had to write a headline on a story about where the politics of trade are headed in the congress. What would that headline? I would say President Trump nears day of reckoning with congress on trade. Burgess says that the renegotiated NAFTA, the US, Mexico, Canada agreement known as US MCA is one of the few things that this divided congress could actually pass. You know, the next couple months, will tell us pretty much everything because once September begins, you talk government shutdown. You're talking raise the debt ceiling the window probably closed for a new trade deal to be approved. And that's why I think, you know, there's not much going on in Washington today that that has a chance of passing, but this is one that does. And so that's why a lot of people are starting to really hone in on it. So just walk us through what the time line looks like I would say, there's August recess the scheduled, they can always mess with that, if they need to. Although it's pretty sacred to members of congress go home for five weeks. But, you know, I would say by the by the time that. Congress breaks for that August recess. Whether it's at the end of July or whether they take an extra week or two, if they don't have this new trade deal approved it's probably not going to happen, and that's because then what in the fall, just too much. I mean, there's they have to fund the government after September thirtieth after is the debt ceiling. Democratic primary will be raging Democrats. Don't generally like the new trade deals. It's just much harder to pass things the closer, you get to the primary elections which aren't that far away. Honestly. I mean, we're getting close to the six month market, and that has a way of just consuming. Everything in the capital said, basically, July, or bust that, that's what I put a little asterisk on it and say, anything can happen. But that's definitely the way that I would see it right now banner, we running out of time. Yeah, we're absolutely running out of time to pass the US MCA gotta get it done by the August recess going to be possible to do in the fall. So, yeah, we're looking at the potential for this thing to fail, which would be potentially hugely calamitous. And presumably that'll keep trade as a live issue and a hot political football, once again, in a presidential election, Democrats gonna have to try to figure out exactly where they stand on trade, and President Trump. Meanwhile, is going to try to flip the traditional script campaign as the defender of American workers and unions, and bringing manufacturing jobs back and painting Democrats as in the back pocket of Wall Street and corporate America. So ill. Look, a lot different than any presidential campaign, we've seen in a long time, and I'm quite sure the whole world will be watching this one. So next time on global translations, how our businesses and other countries sizing up everything that's going on in Washington, plus what to make of the man, who's emerged as the leading voice on trade in the Trump cabinet US, Trade Representative Robert lighthizer, lathering hasn't worked for twenty five or thirty years. So we have to try something new, and I think we've gotten to a point where we might have success. We'll find out Trump may be chaotic, but it's lighthizer who behind the scenes is setting very specific agenda. Thanks to my colleague, Ben white, our producer is Anne Reese, we had help on this episode from Patricia Jacob and Michaela Rodriguez. Dave Shaw is the executive producer of politico audio, I'm Louisa savage. Global translations is presented by city, a leading global Bank. Subscribe to the show wherever you get your podcasts. And listen for branded episode from city about some of these same themes coming Thursday, June twenty-seventh. Thanks and see you next week.