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Trade Trembles as Trump Towers

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In a recent interview with Breitbart News Daily, political strategist Pat Caddell said his polling had uncovered an “economic nationalism” movement, deeply suspicious of free-trade orthodoxy, that was far larger than anyone previously suspected.  He credited this movement with propelling the unexpected success of Donald Trump and Bernie Sanders in the 2016 primaries.

It seems like everyone is aware of economic nationalism now, including observers beyond America’s borders.  For example, a Financial Times report on Tuesday found Japan’s political elite growing nervous about the prospect of a Trump presidency, after being “slow to take Mr. Trump seriously.”

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According to this report, “Tokyo is realizing that even if Mr. Trump loses, his rhetoric is seeping into the popular consciousness, and other U.S. politicians are changing their positions in response.”

Some of this consternation concerns military security. “Still fresh in our memory is the tremendous damage another Washington outsider, Jimmy Carter, did to East Asia’s security equation,” said one Japanese analyst — but it’s mostly about free trade, and the possibility that the Trans-Pacific Partnership trade deal will be scuttled.

Even though the Financial Times piece is pitched as criticism of Trump, it acknowledges that skepticism of TPP is flourishing on both sides of the aisle, as Hillary Clinton struggles to put Bernie Sanders away, and notes there is some resistance to TPP in Japan as well.

The report notes that Tokyo “regards access to the U.S. car market as its main gain from TPP.”  That’s exactly what worries some TPP critics in the United States, especially those connected directly to the automotive industry.

The Hill finds Republican opponents of TPP emboldened by Trump’s (and Sanders’) success in the Michigan primaries.

“The way the votes are going and the way that issue is playing out, it’s becoming more and more clear that it’s a major issue on which people will vote,” said Senator Jeff Sessions (R-AL), whom The Hill notes is the only senator to endorse Trump thus far.

“There’s a growing strength among the people who oppose this agreement, and I think it would be very damaging to the Republican Party to try to jam it through at the last minute after the elections are over,” Sessions advised.

Interestingly, an unnamed senior Republican aide quoted by The Hill mentions the political reality that his party shouldn’t work too hard to get a bill favored by the lame-duck Democrat president passed, but then added, “There seems to be a lot of suspicion of the deal out there across the country. We may be out of touch, but we’re not that out of touch.”

Also mentioned is a poll by Americans for Limited Government that shows 59 percent of likely Republican voters “believe free trade helps other countries more than it does the United States,” while 66 percent “oppose the TPP when given arguments for and against it.”  Considering how much sway free-trade orthodoxy held on both sides of the American political divide just a few years ago, those are remarkable numbers.

The Global Times doesn’t hesitate to pin the shift in U.S. public opinion against free trade on Trump, although Caddell’s point was that Trump didn’t so much create that tide of opinion as release it:

The rise of Trump has opened a Pandora’s box in US society. Trump’s supporters are mostly lower-class whites, and they lost a lot after the 2008 financial crisis. The US used to have the largest and most stable middle class in the Western world, but many are going down.

That’s when Trump emerged. Big-mouthed, anti-traditional, abusively forthright, he is a perfect populist that could easily provoke the public. Despite candidates’ promises, Americans know elections cannot really change their lives. Then, why not support Trump and vent their spleen?

The rise of a racist in the US political arena worries the whole world. Usually, the tempo of the evolution of US politics can be predicted, while Trump’s ascent indicates all possibilities and unpredictability. He has even been called another Benito Mussolini or Adolf Hitler by some Western media.

Mussolini and Hitler came to power through elections, a heavy lesson for Western democracy. Now, most analysts believe the US election system will stop Trump from being president eventually. The process will be scary but not dangerous.

Leaving aside the heavy breathing about Mussolini and Hitler, the point about Trump’s rise confounding comfortable assumptions from the political and media classes sounds about right. The first Trump post-mortems were written within hours of his candidacy being announced. Every gaffe was supposed to be a land mine that would blow him out of the race.

Once upon a time, the 2016 GOP primary field was supposed to be vacated by “shock and awe” over Jeb Bush’s unstoppable money machine. Bush was going to intimidate all other serious candidates out of the field with his gigantic bankroll. There probably wasn’t a single handicap written before last August that predicted Trump would be a major force in the primary, let alone the front-runner.

There are a few things everyone missed when handicapping the race.  This turn against free trade is definitely one of them.  It’s part of a broader loss of faith in establishment ideas, especially internationalism in all its forms — from trade deals, to open borders, and military intervention abroad.  A good deal of the American public feels like nobody represents them, or cares about their interests.

When Trump says other governments that aggressively protect their interests are eating America’s lunch, it strikes a chord with those alienated voters.  (Even if, as the Financial Times article notes, Japanese politicians can only wistfully remember the days when their economy was the powerhouse threat Trump describes it as.)

Free-traders strike back by saying all protectionist measures — including insufficient enthusiasm for complicated TPP-style deals — will raise the prices paid by American consumers.  They need to juice up that argument, because a significant number of both Republican and Democrat voters are looking at recent history, and wondering if super-low consumer prices are the alpha and omega, the beginning and the end, of wise economic policy.


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