VDH writes for the Free Press:
Ignore the Wall Street hysteria. The president is trying to end a 50-year injustice directed at the U.S.—and to help the most overlooked Americans.
…By 1975, however, annual trade deficits grew larger and were uninterrupted. Yet in response, American postwar free-trade policies remained mostly unchanged despite a radically changed world. Presidents mostly either ignored, discounted, or did not grasp the dire implications of the growing transference of American manufacturing overseas, and the rising importation of big-ticket items like cars and appliances as well as a flood of cheap consumer goods.
Indeed, the United States is now nearing a $1 trillion annual trade deficit—a reality in the not-so-distant past that used to worry an array of investors like Warren Buffett (“The trade deficit is selling the nation out from under us”), politicians such as Bernie Sanders and Nancy Pelosi (“The fact is that U.S.-China trade is a job loser”), and economists like Paul Krugman (“Mercantilism makes a fair bit of sense.”).
The fall of the Soviet Union and the ensuing globalization should have shocked Washington policymakers out of their static, half-century trade orthodoxy and into readjusting American trade policy to ensure parity and reciprocity—especially as Chinese imports, coupled with U.S. outsourcing and offshoring, began to result in a “Rust Belt,” with an array of accompanying social and cultural pathologies.
But the 1990s exuberance of an unrivaled hyperpower America—now victorious not just in World War II but over the Soviet Union as well—created a sense of unreality in Washington.
Was it an unjustified triumphalism that tended to blind us to the potential long-term negative trends? Or perhaps our naivete was a carryover from the Good Samaritan and self-congratulatory diplomacy of 1945 that had opted for the greater good in rebuilding war-torn Asia and Europe. Such idealism resurfaced in the naive belief—shared by policymakers on both sides of the aisle for the past several decades—that the more we aided Chinese prosperity, the more it created a consumer middle class, the quicker Beijing would liberalize, democratize and, with its new affluence, rejoin the family of consensual nations.
Where did all of this leave hardworking, blue-collar Americans? Globalization had encouraged Americans to invest, offshore, and outsource abroad. As the American industrial belt stagnated, there appeared a strange strategy of compensating for lost higher-wage jobs by accelerating the importation of foreign-assembled, cheap consumer goods. If a Pennsylvania steel or appliance assembler lost his job, pension, and medical plan, at least he always had Walmart and access to Chinese imported tennis shoes and sweatshirts at historically low prices.
In reductionist terms, those tasked with directing U.S. trade policy rarely cared to calibrate the real social, cultural, and moral costs of millions losing high-paying jobs, of small communities offshored and outsourced into oblivion, of soaring opioid use, suicides, fragmented multigenerational families, and a nation increasingly dependent upon strategic materials, pharmaceuticals, and precision machinery imported from abroad—and not always from allies or neutral nations.