ECONOMICS Bloomberg Businessweek November 16, 202042
DISHES: GETTY IMAGES: LIGHTHIZER: KEVIN LAMARQUE/REUTERS; ILLUSTRATION BY JACK SACHS; DATA: COMPILED BY BLOOMBERG; U.S. BUREAU OF LABOR STATISTICSTHEBOTTOMLINE Bidenmaytakemonthstodecidewhatto
throwoutfromTrump’splaybookontrade.Buthemaykeepa lot
andusesomeofTrump’saggressiveactionsasleverage.a post-Brexit U.K., though none of those appear
close to a conclusion.
A slow transition will add further delays to the
stalled process of finding a new director-general for
the WTO, where the U.S. has blocked the installa-
tion of Nigeria’s Ngozi Okonjo-Iweala, who has the
support of most other major members. Advisers to
Biden say his administration will want at the very
least to carefully review Okonjo-Iweala’s record, as
well as that of South Korea’s Yoo Myung-Hee, the
Trump administration’s preferred candidate.
Hanging over all this is the question of how
much room the president-elect will have to
maneuver given Trump’s rewriting of the politics
of trade. The answer: quite a lot more than you
might initially think, thanks to Trump.
His use of executive authorities contained in
long-dormant statutes to impose tariffs ignored
a time-honored deference to Congress on trade.
It’s something that Biden might choose to do, too.
The Section 301 investigation under the 1974 Trade
Act that Trump used to launch his China tariffs
was based on intellectual property theft. A Biden
administration, one adviser says, might consider
using the same strategy to deal with Chinese envi-
ronmental or labor practices. Some Biden backers
and former trade negotiators relish the leverage the
president has created with his tariffs. Trump has
strengthened America’s negotiating hand regard-
less of who’s in power, they point out.
Trump and Lighthizer have also shown what’s
possible on Capitol Hill by prying at least parts of the
Republican Party away from free-trade orthodoxy.
Phil Levy, a former economic adviser to President
George W. Bush who advised Senator Marco Rubio
during the 2016 presidential campaign, points out
that the Florida Republican has since embraced
a new economic populism alongside other young
Republican senators with presidential ambitions,
such as Missouri’s Josh Hawley.
For decades, Republicans carried trade agree-
mentsoverthefinishlinealliedwithonly a small
numberofmoderateDemocrats—alienating those
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t we not keep
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Lighthizer said
in 2017 as
he set about
enegotiating theNorth American Free Trade Agreement. In the
process of hammering out an updated trade deal
with Canada and Mexico, Lighthizer won influen-
tial Democratic allies ranging from House Speaker
Nancy Pelosi to Senators Sherrod Brown of Ohio
and Ron Wyden of Oregon, the top Democrat on
the Senate Finance Committee. He also won over a
decidedly pro-Biden labor movement.
Of course, the bitter divisions in the U.S. mean
nothing in politics will be easy for Biden, partic-
ularly if Democrats lose two Senate runoffs in
Georgia in January and don’t win control of the
body. There’s also still likely to be some reversion
to the mean on trade among Republicans. Clete
Willems, a partner at Akin Gump who served as
deputy director of the National Economic Council
under Trump, says the choice isn’t between a pro-
trade, pre-Trump Republican Party and one of
“America First” purists. “I hope we can take some
of the best of Trumpism and combine it with the
best of the old world to develop a trade policy that’s
hard-edged, but at its core doesn’t see tariffs as the
ultimate goal,” he says.
There are those who also see a lesson relearned
on the pitfalls of protectionism. Douglas Irwin, a
Dartmouth College historian of U.S. trade policy,
argues that future administrations including Biden’s
are likely to pause before using tariffs again in the
way Trump has. “We had an experiment for four
years about what it’s like to use tariffs for all sorts of
objectives, and I don’t think it’s going to be viewed
as a success,” Irwin says.
And yet, Trump has injected other, bigger exis-
tential questions into the system. One of his endur-
ing legacies will be the “wake-up call for the rest
of the world about this notion of American leader-
ship and reliability” that he forced them to confront,
says Chad Bown, a former member of Obama’s
Council of Economic Advisers who’s now at the
Peterson Institute for International Economics.
That’s left broad uncertainty about the durability
of America’s economic relationships, he argues,
that will continue shaping business and trade with
China and across the Atlantic. The uncertainty will
remain even if Biden in the months ahead makes the
unlikely choice to remove all of Trump’s tariffs. Add
to that a pandemic that’s caused many countries to
look inward, and the task of the friendly grandfa-
ther sent in to clean up the mess only grows. The
global economy’s one-time order, it turns out, needs
more than just physical repairs. —Shawn Donnan
and Jenny Leonard○ Lighthizerin theDemocraticParty
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