No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers
By Robert E. Lighthizer
Broadside Books, 382 pages, $32
The 2006 midterms are mostly remembered as a referendum on the Iraq quagmire, the Bush administration’s aborted plan to privatize Social Security, and its abject handling of Hurricane Katrina. In the wake of that year’s Democratic wave, however, several commentators attributed the party’s triumph to a now forgotten factor: the appeals to economic nationalism primarily made by Rust Belt candidates. For instance, Rep. Sherrod Brown flipped a GOP-held Ohio Senate seat that year by assailing free trade and the resulting depletion of the Midwest’s industrial base. At the time, Slate’s Jacob Weisberg lamented the rise of an “illiberal” and “reactionary” tendency represented by Brown and other so-called Lou Dobbs Democrats, named after the CNN pundit known for his hawkishness on trade and immigration. Populists in Brown’s mold, critics like Weisberg argued, represented a retreat from the only viable path for economic dynamism and a rejection of America’s international leadership.
A decade later, Donald Trump’s appeals to the same themes emphasized by “Lou Dobbs Democrats” contributed to his upset victories in Michigan, Wisconsin, and Pennsylvania, and played a decisive role in propelling him to the presidency. While Brown has survived politically by tacking between Bernie Sanders’ left populism and Joe Biden’s avuncular overtures to blue-collar workers, he is at this point one of the party’s last crucial links to unionized manufacturing workers, industries, and regions that are otherwise drifting out of its orbit. As illustrated most recently by J.D. Vance’s defeat of Democrat Tim Ryan in last year’s Ohio Senate race, the electoral base of protectionist Democrats has shifted toward the Republican Party. Presumably sensing the political risk posed by this shift, the Biden administration has embraced some elements of Trump’s economic nationalist agenda.
The recent turn toward economic nationalism within the GOP cannot be attributed solely to Trump’s political intuition, however. The groundwork for major policy realignments is often laid by overlooked heterodox thinkers over the course of many years, sometimes decades. Robert E. Lighthizer, who served as US Trade Representative under Trump and as Deputy Trade Representative for the Reagan administration, is exemplary of this sort of persistent behind-the-scenes advocacy. For nearly forty years, Lighthizer has been the most prominent and determined advocate of strategic protectionism in the United States. His new book, No Trade Is Free: Changing Course, Taking on China, and Helping America’s Workers, is the fullest account yet of the paradigm shift on trade begun under Trump and continued by the Biden administration.
Part manifesto, part memoir, No Trade Is Free articulates a coherent vision of what promotes shared prosperity, the common good, and the advance of the American working class. The book builds on numerous editorials in which Lighthizer warned that a vital segment of American workers, industry, and know-how would be undercut by globalization; that further trade liberalization would shrink the American middle class; and that both the rules of global economic governance and market integration with China would erode US sovereignty. If industrial policy proves to be the fount of a new economic consensus, Lighthizer may go down in history as the most consequential unelected statesman since the end of the Cold War.
Raised in Ashtabula, Ohio, a small city emblematic of the rise and fall of American manufacturing, Lighthizer stands apart from the market fundamentalists who once dominated his party, repudiating much of the dogma that led to myopic policy choices and astronomical wealth inequality. Although he is unapologetic about his hawkish views on China, Lighthizer otherwise projects a credible balance of pragmatism and conviction; this is not the work of a demagogue or jingoist, but a civic nationalist. Political realists who understand trade policy is vital for any progress toward American social democracy will therefore benefit from studying Lighthizer’s worldview, even if they agree with few of his prescriptions.
Lighthizer's book is an important document for a few reasons. For one thing, as US Trade Representative, Lighthizer was the intellectual and diplomatic architect of what cautious supporters now call “regionalization” and critics call “quasi-autarkic trade blocs.” The neomercantilism of Made in China 2025, Lighthizer argues, essentially had to be met in kind. The threat and imposition of new tariffs, initially mocked as a retrograde tool that would only inflict pain on American consumers, compelled China and other countries to recognize Lighthizer as a resolute negotiator. Likewise, Lighthizer’s use of Section 301 of the 1974 Trade Act and Section 232 of the 1962 Trade Expansion Act were denounced as needlessly belligerent, but these moves provided a credible workaround of the usual, unproductive channels for trade disputes at the WTO. The objective behind these actions was twofold: to stimulate more domestic investment by effectively raising the price of Chinese goods, thereby establishing additional policy grounds to compensate for the ways China has exploited the United States’ growing trade deficit; and to make China address other practices, such as forced technology transfers and violations of intellectual property, which have undercut American investors while accelerating the country’s control and development of sensitive dual-use technologies.
Critics of Lighthizer warned that his punitive approach to China increased the odds of a new Cold War. His retort is that China, like other countries, has a right to development and prosperity, but that this must not come at undue cost to American industry, the country’s social fabric, and legitimate national security interests. The trade wars undertaken during Trump’s presidency were not, as many pundits believed, another symptom of Washington chaos and court intrigue, but a process with a clear end: a strategic decoupling from China.
Lighthizer’s numerous pronouncements about China’s threat to American sovereignty and prosperity make clear that such a decoupling was always central to his mission. While serving under Trump, Lighthizer echoed the former President’s assertion that playing hardball was a tactic for extracting better trade deals, and he duly pursued opportunities to increase American exports in the Phase One negotiation with China. But in retrospect, it is clear that he prioritized hard-nosed diplomacy to buy time to reestablish the United States’ industrial home market, however fanciful that goal appeared to be—at least prior to 2020, when the pandemic prompted a profound and nearly universal recognition of globalization’s intrinsic vulnerabilities.
Another reason Lighthizer’s book is important concerns the future of the Republican Party. While the “populist” tendency inside the party is both embryonic and radically incoherent thus far, Lighthizer’s portfolio and his understanding of what government ought to do to strengthen the position of American workers offers a clear vision of some of the policy goals serious GOP populists might pursue. Before the post-Nixon fusion of market fundamentalism, anti-government libertarianism, and social conservatism, the Republican Party historically endorsed industrial protectionism, subsidies, and other forms of state-steered investment, along with some efforts toward social reform. Although Lighthizer elides how this model of Republican developmentalism was captured by newly minted economic elites at the expense of workers during the late 19th and early 20th centuries, his evident respect for unions recalls the scattered liberal nationalists and progressives in the Republican Party who sought a genuine accommodation between capital and labor.
Lighthizer’s account should compel a serious response from his nominal ideological opponents on the left. His views remind us that protectionism and industrial policy provide an important lens to understand the changing nature of the party system in relation to opportunities for regional economic development, the preservation or restructuring of comparative advantage, and divisions within the working class. An honest reevaluation of where Trumpism came from cannot ignore the fact that Sherrod Brown, Jesse Jackson, Bernie Sanders, and other outflanked voices in the Democratic Party had repeatedly warned about the alienation and unfolding dealignment of American workers. Under the sway of the Washington Consensus, the mere whiff of protectionism became taboo, derided not only by libertarians but by liberals wary of association with Lou Dobbs-style nativism. The gradual adoption of this attitude on the left was peculiar, given its enthusiasm for the anti-globalization movement of the late 1990s and early 2000s.
An ideal international system would have “balanced trade,” not knee-jerk protectionism or unfettered globalization, Lighthizer maintains, but getting there requires realism and defensive measures. As he points out, the United States does have stronger labor and environmental standards relative to China, leaving few plausible options to rehabilitate the United States’ industrial base without either degrading those standards or checking the glut of cheap imports and trade dumping. Similarly to liberals like Robert Kuttner and Elizabeth Warren, Lighthizer believes that under a regime of free trade and supranational rule-making, the race to the bottom to extract profits eventually attenuates development, even in vaunted “knowledge economies.”
On this score, Lighthizer’s arguments are not so dissimilar to left-populist arguments for Brexit or the left-wing German sociologist Wolfgang Streeck’s attacks on Brussels’ undemocratic control of fiscal policy in the European Union. At some point, democratic nation-states must take matters into their own hands if they are to preserve systems of capital formation and fiscal transfers that maintain some semblance of common citizenship.
There are plenty of points on which social democrats and progressives will disagree with Lighthizer. Outside of trade issues, Lighthizer typically embraces conventional supply-side solutions to tax and regulatory matters, putting far too much trust in capital to commit to the fixed investments he insists tariffs will support. His claim that the Trump administration successfully revived American manufacturing before the pandemic has been contested by experts at pro-manufacturing associations and think tanks, including Scott Paul of the Alliance for American Manufacturing and Robert Scott of the Economic Policy Institute. More pointedly, Lighthizer may be faulted for occasional displays of conceptual blurriness: Despite professing support for other countries’ right to development, he castigates China and others for industrial policies that are in many cases virtually the same ones the United States has historically employed or is currently implementing. As the scholar Yuen Yuen Ang has argued, “once the dates and names in 19th-century American history are removed, the parallels between that period and post-1978 China are striking.”
There are limits and trade-offs to consider with any industrial strategy—most obviously, costs to consumers that might significantly outweigh wage and productivity growth in shielded subsectors. Most think tanks and mainstream economists argue that tariffs are invariably passed on to consumers and raise costs for US exporters that have complex international supply chains. While the continuation of tariffs under Lighthizer’s successor in the Biden administration, Katherine Tai, has arguably not been a factor behind inflation—the evidence points more to old-fashioned corporate price-gouging—it is unclear how much they are contributing to the rise in plant investment over the last two years. Recent wage gains among America’s lowest-paid workers seem to be primarily an effect of the tight labor market, as well as the ongoing phase-in of minimum-wage increases passed in various states and cities in previous years.
Despite encouraging signs for the domestic energy transition, prominent analysts maintain that neomercantilist strategies do not add up—that they hurt global economic growth while alienating US allies—and that the “wage goods” (i.e. low-cost imports of toys, appliances, home electronics, clothing, and so on) which American workers have received since the 1990s have basically compensated for flatlined wages. With consumer spending accounting for roughly 70 percent of GDP, regionalization that is badly executed could make working Americans poorer in the long run.
At the same time, such assessments skirt the fact that diversified and value-added manufacturing, at least in the West, has historically correlated with rising living standards. This has been true not just for assorted manufacturing subsectors, but for other industries and their surrounding communities, particularly when collective bargaining is codified and strong, and when policymakers have supported full employment. The fact that the Biden administration has mostly preserved Trump’s tariffs, moreover, signals that it believes they are a bulwark for the industrial policies contained in the CHIPS and Science Act and the Inflation Reduction Act. At least in the medium term, this is a calculation that the presumed costs of protectionism long asserted by neoliberal economists are diffuse enough to bear and that tariffs are a legitimate tool when integrated with a larger strategy to spur domestic investment. Progressives who are ambivalent about this continuity would do well to weigh the harsh effects of the “China Shock,” which persisted into the Trump era. They might also consider that much of corporate America (particularly multinationals) loathed Trump’s tariffs and that the organs of the conservative establishment—never an ally of labor—continue to be sharply critical of Lighthizer’s producerist outlook.
There is also the question of whether displaced manufacturing workers and their children are actually content with the exchange in status and job security for seemingly endless imports, many of which break or end up in a landfill after limited use. “Productivism” need not be overly romanticized to recognize that decent jobs with stable contracts and benefits, underpinned by solidaristic workplace relationships, shape people’s identities and family formation. Particularly in small cities like Lighthizer’s hometown, the lost sense of belonging caused by sweeping layoffs is magnified by the shuttering of small businesses and other bleak signs of community decline. As every news article on a plant closure reminds us, cities and towns which lack the service, entertainment, and tourism sectors that fuel major metropolises depend greatly on proximity to sites of mass production and adjacent employment in technical and craft trades.
It is on this broader theme of community resilience that Lighthizer is most provocative and interesting. Access to cheap goods, Lighthizer maintains, is not a social good in itself. The purpose of political economy is not merely to sustain consumption but to foster attachments and obligations that promote self-government. Some things should not be sacrificed for the sake of sheer efficiency gains. Potentially constricting freedom of choice in one realm, Lighthizer seems to say, is a worthy price to pay if it means promoting a higher form of autonomy, one that in turn contributes to community and national wealth in all its manifestations. Amid all sorts of social pathologies and anomie, Lighthizer is mounting a qualitative, moral defense of what political economy should do. As many on the left ought to instantly recognize, such a vision in the end cannot be executed without an ambitious, activist state.