Trump's new trade bill is peak Trump

If you think President Trump's tariffs are outlandish or upsetting, well, just wait until you see what he'd like to do next.

Thanks to a scoop from Axios, we know a new trade bill has been written at the White House's request: the "United States Fair and Reciprocal Tariff Act." Besides making for an extremely unfortunate acronym, the bill would blow up the global trade order. It would return U.S. policy to one-on-one trade deals with every single other country, and give the president more or less unilateral power to wage trade wars with everybody.

The White House's bill has basically zero chance of becoming law. But it's still a useful glimpse into what Trump truly unbound on trade would look like.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

The first thing to realize is that the United States is a member of the World Trade Organization (WTO), an international agreement that sets rules for how countries can engage with each other on trade issues and how they can handle disputes. Trump's bill does not explicitly withdraw the U.S. from the WTO. But in effect that's exactly what it does.

First, the WTO says you can't treat some trade partners differently than other trade partners, unless you have an official deal with that country granting them certain privileges. Trump's bill says no, the U.S. will slap whatever tariffs it wants, on whatever country it wants, for whatever reason it wants.

Second, the WTO puts a ceiling on how high tariffs on trading partners can get. Trump's bill would ignore that ceiling, too.

Third, and just as important, the bill would give the president the unilateral authority to carry out all these changes as he sees fit, with no input from Congress. We've been headed in this direction for many, many decades: Law after law has transferred ever more power over tariffs and trade policy from the legislature to the executive branch. But this new bill would take that trend to its extreme endpoint.

Congressional Republicans are far too fractured and cowed by Trump to take away any of his existing powers. But plenty of them are still very nervous about his tariffs. It seems safe to say there's no majority for expanding his powers further, either. Peter Navarro, one of Trump's key trade advisers, reportedly thinks the bill could get wide support from Democrats. But this severely overestimates how much the party has altered its own pro-globalization views, and how willing it is to cooperate with Trump on anything.

That said, there are some things we could learn from this little episode. And not just about how bad things could get if Trump really got everything he wants.

Quartz's Ana Campoy noted that what Trump really wants is a return to an older form of international economic relations: a Hobbesian trade war of all against all. Trump chafes at the idea of subsuming all of these fights under universally agreed upon rules and norms. He doesn't want anyone to civilize economic relations between countries — he wants the Wild West. Supporters of globalized trade fear this combat would inevitably spill over from the economic realm into the military realm. As Campoy notes, Trump's preferred world is how things actually worked through the late 1800s and early 1900s — an era that ended in the conflagration of World War I. And Trump himself certainly sees all international policy through the lens of omnidirectional belligerence and dominance.

An international system that helps prevent countries from getting into actual wars seems obviously necessary and good. And there's probably a strong argument that such a system inevitably involves measures that discourage trade wars in some way as well. But we should also recognize that these global agreements can be captured by powerful tribes in the international community, benefiting themselves at others' expense.

Trump and company can't see this problem through any lens other than national borders: one country exploiting another. Hence this bill is their preferred solution. But as economist Dean Baker just wrote, a far more accurate lens is to see it as international class conflict. Elites across multiple countries make out like bandits under today's arrangements, while working classes across multiple countries get the short end of the stick.

A genuinely progressive trade policy — one that preserves peace and reciprocity and mutual benefit, while also ensuring justice for the poor and working classes — would require deep and radical changes. Josh Bivens, a progressive economist at the Economic Policy Institute, has written on how this could work. We can also look further back to John Maynard Keynes for examples of a totally different, and more economically just, approach to international trade. But long story short, these would be deep and radical changes. And getting from here to there may well require stepping back, at least temporarily, from big multilateral trade arrangements.

Which is to say, Trump and his backers aren't utterly wrong here.

Whether handing the presidency even more unchecked trade power is the right way to go down this path is another question entirely. Trump is a showboat with an authoritarian's instincts. So of course he prefers this. America has shown it can place blinkered free traders in the Oval Office. And now it has shown it can put blinkered protectionists in there too. But whether it can elect a nuanced skeptic of the modern trade order remains to be seen. One lesson of the last few decades may be that cutting Congress so completely out of tariff and trade policy might not always be such a great idea.

One other thing also seems pretty clear: We need to get serious about fixing international trade. Because if we don't, American may eventually elect President Trump 2.0. And when it does, we may finally have a Congress that really would pass this bill on his behalf.