Trump's alternative facts on free trade are largely falsehoods
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President Trump’s latest statement on free trade accused the European Union of being “very protectionist.” Such allegations are nothing new from a president who frequently complains that America suffers from its partners’ unfair trade practices. According to Trump, other countries discriminate freely while the U.S. remains handcuffed by its trade deals. 

How well do the facts support his story? 

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The simple truth is that the U.S. government implements more protectionist policies than any other country. According to Centre for Economic Policy Research (CEPR) data, the U.S. erected almost twice as many new barriers than anyone else since the Great Recession, including the European Union.

That fact alone doesn’t mean Trump is wrong. It’s possible that American exporters face more trade barriers abroad, forcing the U.S. government to retaliate against unfair practices.

 

Unfortunately, the data does not support that narrative. EU members (and China) are actually targeted more frequently than the U.S. It is true that America faces a large number of trade barriers; it ranks in the top five of countries targeted worldwide. But the U.S. is not singled out unfairly relative to other major economies. 

More importantly, the U.S. and EU target one another at comparable rates. CEPR reports that total U.S. government interventions against the EU exceeded 540 since 2008. EU interventions targeting the U.S. totaled 520. Thus, the U.S. slightly edges the European Union, though the gap is small. 

The disparity is larger when looking at specific policies. For example, the U.S. is much heavier user of key non-tariff barriers, such as anti-dumping, which is the most common — and most controversial — non-tariff barrier over the past several decades. According to data from the World Bank and World Trade Organization, the U.S. far outpaces the EU in anti-dumping use.

Of course, merely counting instances of protectionism says nothing about how those policies affect markets at home and abroad. What's more, trade protection’s economic consequences are harder to measure. It is possible that the EU’s trade discrimination does comparatively more harm to U.S. producers than U.S. policies do to the EU.

It’s certainly true that the EU protects a wider diversity of goods than the U.S., including chemicals, fruits and transportation equipment. U.S. trade barriers, on the contrary, focus more narrowly on steel. But while the EU casts a wider net, America’s steel protection is economically and politically significant.

The U.S. ranks in the top ten of global steel exporters. Protecting the ailing industry, which is concentrated in politically important states, has become a hot-button issue in recent decades. The result is that steel remains one of America’s most heavily-protected sectors.

When assessing Trump’s claims, it’s also important to consider legal challenges to trade policies. Early in his administration, Trump questioned the authority of the WTO’s dispute settlement system. Citing unfair rulings, Trump said the U.S. would look to settle its disagreements outside the global trade regime’s formal process.

It’s true that the U.S. is sued more often — and loses more cases — than any other WTO member, but the conclusions he draws are wrong. The U.S. loses a lot, but so does every other country that gets sued. In fact, complainants win at least some portion of WTO disputes over 90 percent of the time.

America’s seemingly poor record at the WTO doesn't mean the U.S. is being treated unfairly. Just the opposite. It illustrates how frequently the U.S. discriminates against its trade partners. Legal challenges to U.S. policies are not arbitrary. Rather, the volume of cases repeatedly targeting specific U.S. policies — e.g., America’s anti-dumping practices — reveals how committed the U.S. is to maintaining those barriers, even after they are struck down. 

The lack of evidence supporting Trump’s assertion comes as no surprise to economists. Since last year’s presidential campaign, experts questioned Trump’s understanding of trade’s fundamentals. Many warned that his unique brand of economic nationalism would lead to recession at home, further accelerating the decline of U.S manufacturing. Others pointed out that his policies would systematically disadvantage America’s poorest families (since trade protection raises prices for the average household). 

Now we are starting to see the effects of Trump’s ill-conceived economic nationalism. It’s a policy strategy consisting mainly of threats and accusations. America’s most important trade partners are understandably losing patience. Early in July, remaining members of the Trans-Pacific Partnership met to discuss moving on without U.S. involvement. At the same time, Mexico and China expressed a shared interest in negotiating a new agreement. Both events come on the heels of last spring’s deal between Canada and the EU. 

Trump now finds himself surrounded on all sides by new trade agreements. Each of America’s top five trade partners is looking elsewhere to form new deals — deals without U.S. involvement.

Trump and his supporters may welcome this development. Elements of both parties agree that trade deals no longer serve U.S. interests. But as his recent tweet illustrates, Trump continues to underestimate the consequences of his approach. “America first” is quickly resulting in America being left behind.

Jeffrey Kucik, Ph.D., is an assistant professor of political science at the City College of New York. He also serves as the director of CCNY's international relations master's program.


The views expressed by contributors are their own and not the views of The Hill.