Several key members of President George W. Bush’s trade policy team, which advocated for a free market agenda, increasingly view the Trump administration’s China agenda in a sympathetic light. While disagreeing with Trump’s protectionist instincts on several key points, the Bush-era trade hands argue that the broader economy has changed and that the concerns Trump is addressing are real.
Many of the advocates for more open trade with China a decade ago argue now that Beijing hasn’t done enough to liberalize its economy. Reactions like the Trump administration’s, they say, were inevitable — and Beijing should recognize that reality.
“The United States played the decisive role in facilitating China’s entry into the World Trade Organization,” said Henry Paulson, who served as Treasury secretary under President George W. Bush, in a speech Wednesday at a Singapore event hosted by Bloomberg. “Yet 17 years after China entered the WTO, China still has not opened its economy to foreign competition in so many areas.”
China’s obstinance is “simply unacceptable” said Paulson. “Trade with China has hurt some American workers. And they have expressed their grievances at the ballot box. So while many attribute this shift to the Trump administration, I do not,” he added. China’s current leadership needs “to recognize the changed context in the United States.”
Many feel Beijing just hasn’t lived up to the promises it made almost two decades ago, says Gary Hufbauer, nonresident senior fellow at the Peterson Institute for International Economics. “The former U.S. officials expected China to adopt market-oriented policies on a much faster pace than what has occurred. … Such expectations have been disappointed, making former officials more willing to sympathize with Trump’s aggressive approach,” Hufbauer said.
For example, Bob Zoellick, who was U.S. Trade Representative during George W. Bush’s first term, told the Chinese news outlet Caixin in September that he doesn’t agree with Trump’s views on trade in general, but that China’s policies are causing an understandable backlash.
“I think it’s important to recall that when China came into the WTO in 2001, its commitments to open its markets were actually more far-reaching than many other developing countries,” Zoellick said. Nevertheless, the average tariff rate for China is about 9.9 percent, about three times higher than the U.S. rate. “So when President Trump says to the American public, ‘How can this be fair?’ you can understand why he gets some resonance on the issue.”
Sen. Rob Portman, R-Ohio, who succeeded Zoellick as U.S. trade representative in the Bush administration, expressed similar concerns in a late October speech to the Heritage Foundation. “When I meet with the Chinese ambassador about these issues, as I have recently, and they say they are confused, what are our objectives? I point them to the actual petition, actually the trade case itself, which again is very specific. … We’re simply saying they should play by the rules,” he said.
When the Trump administration announced last year that it was pulling out of the Trans-Pacific Partnership, a 12-nation trade deal, Portman said that was the right move because the deal didn’t address currency manipulation by China. “Growing exports is critical to our economy. But at the same time, we shouldn’t allow countries like China to violate trade laws with unfair imports,” he said.
The Bush-era folks still take strong issue with some of the Trump administration’s actions, such as using national security as the rationale for imposing tariffs on things like steel and aluminum imports. The case for that is too weak and could result in the U.S. being unable to invoke national security in the future if the tariffs are successfully challenged before the World Trade Organization by another country, they argue.
Portman has introduced Senate legislation called the Trade Security Act, which would give Congress more oversight in the matter. In a September Wall Street Journal op-ed, Zoellick urged Congress to use the implementing language of the U.S.-Mexico-Canada Agreement on trade to force the administration to exempt Canada and Mexico from the steel and aluminum tariffs. “Mexico and Canada are America’s partners, not national security threats,” he said.
