AMAC Exclusive – By Ben Solis
Treasury Secretary Janet Yellen’s trip to Beijing last week re-affirmed a truth backed up by centuries of U.S. economic history that even the Biden administration understands: Trump’s China tariffs are good for the country, and good for global security.
According to reports from Yellen’s meeting with her Chinese counterpart, Vice Premier He Lifeng, one of Beijing’s top concerns is lifting Trump-era tariffs that have hampered the Chinese economy. But Biden, in what amounts to nothing less than an explicit endorsement of his predecessor’s policy, has kept most of Trump’s tariffs in place. (To be sure, Biden has capitulated to Chinese interests in other ways and emboldened Beijing through his many foreign policy blunders.)
Trump’s China tariffs revived a debate over unrestricted free trade vs. protectionism that dates back to the very beginning of the country. In fact, one of the first significant pieces of legislation passed by the new United States Congress on July 4, 1789, was a list of tariffs on goods. Much like Donald Trump in 2016, the political leaders of America’s founding generation were concerned about the country’s rapidly rising debt and a flood of foreign imports wrecking domestic industries.
Tariffs became a central component of U.S. economic and foreign policy throughout the 19th and early 20th centuries. Republican presidents such as William McKinley and Herbert Hoover made tariffs a central part of their campaign platforms.
By principle, Democrats resisted Republicans who prioritized the economic empowerment of American families. But their hostility toward tariffs reached its apogee during the beginning of the 20th century, viewing them as an obstacle to globalization and international expansion.
A major shift began with the election of President Franklin D. Roosevelt in 1932. Roosevelt viewed a liberal free trade program as an instrument of foreign policy, rather than a tool to better America’s economic condition. He promised that free trade would be a substitute for armed conflict, cheap capital would be the foundation for the nation’s future prosperity, and, over a period of time, an interconnected global economy would become the cornerstone of a new world order.
Two years after Roosevelt’s death in 1945, the United States became a signatory to the General Agreement on Tariffs and Trade (GATT) – a precursor to the World Trade Organization (WTO).
GATT fundamentally changed the way the United States and virtually every other economic power around the world looked at trade. Instead of nations implementing tariff policies in the best economic interests of their working populations, individuals and companies carried out trade on a global level in accordance with their own interests – despite the severe ramifications for domestic workers and national security (as the United States saw during the COVID-19 pandemic with the overreliance on Chinese manufacturing of medical equipment).
GATT resulted in a dramatic decline in global tariffs. The average tariff for the major GATT participants was about 22 percent on most goods in 1947, but declined to 5 percent by 1999.
By the 1980s, however, it became clear that unregulated free trade was threatening hundreds of thousands of American jobs and had initiated a massive outflow of capital to countries that offered cheap labor – undercutting wages for U.S. workers and threatening standards of living.
Despite these concerns, U.S. leaders doubled down throughout the 1990s and early 2000s. In 1990, President Bush decided to open U.S. markets to imports for nearly all products, but only a few nations opened their markets to U.S. exports. China, notably, was not among them.
In 1994 and 1995, respectively, the U.S. adopted the North American Free Trade Agreement (NAFTA) and led the creation of the WTO – two hallmarks of the modern globalist agenda. Although Trump delivered on a major 2016 campaign promise by repealing and replacing NAFTA with the U.S.-Mexico-Canada agreement, a far more protectionist-minded deal, U.S. tariffs, including on China, still remain far below where they were for most of U.S. history.
As a result, China has grown rich on U.S. capital. According to Roger Robinson, the former Chairman of the U.S.-China Economic and Security Review Commission, American investors have “provided as much as $2- $3 trillion or more in investment capital to Chinese companies over the past decade.”
These investments – all of which were directly enabled by loose free trade policies – have left the United States dangerously reliant on Chinese exports for everything from automobile manufacturing to battery production and even military hardware.
Free trade policies also harmed the image of the United States abroad. Soulless investors and asset managers purchased foreign companies for next to nothing and then paid employees even less, forcing them to work in horrid conditions. In one high-profile incident, at least 20 employees at an iPhone manufacturing plant in China committed suicide over the course of one year, drawing international outcry.
Many U.S. companies have also willfully turned a blind eye to China’s human rights violations, most notably the persecution of Uighur Muslim minorities in China’s Xinjiang province. Although some lawmakers have sought to hold Beijing accountable, powerful corporate interests have invested significant resources in keeping Congress on the sidelines.
Trump, however, changed that dynamic. Former U.S. Trade Representative Robert Lighthizer explained Trump’s goal plainly in stating, “The U.S. objective should be to continue trade and economic activity beneficial to us and to discourage any part that is not.”
Biden, for his part, has been a reluctant adherent to this approach, at least when it comes to China. In other areas of trade, however, he has fallen far short, and his foreign policy blunders have left the United States in a worse negotiating position with Beijing.
For Trump, the right balance was reciprocal trade that protected America’s domestic economic interests and foreign policy priorities – something that would’ve seemed familiar to the founding generation. It was, in other words, a strategy to put “America First.”
Ben Solis is the pen name of an international affairs journalist, historian, and researcher.
