A Democrat Floats Options to Trump’s Trade Tactics

(Bloomberg) --

Just how much of a role trade will play in 2020 presidential politics is still up for debate. But the Democratic contenders are starting to weigh in.

President Donald Trump is right to target China, his opposition says, but he’s doing it all wrong. His tariffs hurt American farmers and workers more than the Chinese Communist Party. His new Nafta — the U.S.-Mexico-Canada Agreement awaiting congressional ratification — falls short on labor protection, climate change and drug prices, the Democrats say.

Ultimately, the biggest factor will be the extent to which Trump’s trade battles further hobble the economy. Yet if you want to replace him, you need to offer an alternative. Which is why the plan Elizabeth Warren released Monday is interesting, even if it reads less like a bold vision document than a treatise on process:

• Like Trump, the Massachusetts senator is a long-time critic of U.S. trade policy and has offered “economic patriotism” as a central tenet. She calls for a plan that’s different from both the Washington free-trade consensus that prevailed for decades and Trump’s “haphazard and ultimately corporate-friendly approach.”
• Warren’s big focus is remaking the U.S. process for hammering out trade pacts. She has proposed creating a Department of Economic Development that would absorb the U.S. Trade Representative’s office and its negotiating functions. But she says she would also require greater transparency and congressional input and give more power to advisory committees.
• The environment gets attention. Membership of the Paris Accord would be a precondition for any trade deal, as would be eliminating fossil-fuel subsidies. A carbon tariff would be imposed on goods produced in countries with weaker emission standards.
• Warren does not say how she herself would tackle China, or what she would do with Trump’s tariffs. But she lays out elements of an attack. “We’ve let China get away with the suppression of pay and labor rights, poor environmental protections, and years of currency manipulation.”
• The senator has said she would actively manage the dollar’s value to promote domestic manufacturing, something Trump is flirting with. She would also, however, ban trade talks with any country on the U.S. Treasury’s biannual currency watch list, which now includes China but also allies like Germany, Japan and South Korea.

Charting the Trade War

India’s growing affluence is seeing its population turn more carnivorous, leading the country with the world’s highest number of vegetarians to import more corn for chicken feed than ever before.

Today’s Must Reads

• Shanghai round | U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in China’s bustling port city for talks starting Tuesday evening and continuing tomorrow.
• Thanks for mutton | The U.K. government, which is trying to ease concerns about overseas markets after Brexit, is turning sheep farmers’ attention to a far-away customer: Japan.
• Lighthizer unleashed | Vietnam is the latest target of the American trade representative, who called on the Southeast Asian country to take steps to have more balanced trade with the U.S.
• France’s backlash | Some lawmakers from Emmanuel Macron’s party were given police protection after offices were ransacked following parliament’s approval of an EU trade pact with Canada.
• Crop giants’ bets | The fortunes of ADM and Bunge, two of the world’s largest agricultural commodity traders, have soured amid the trade war and margin-squeezing rally in corn prices. 

Economic Analysis

• Chinese gateway | Hong Kong retains a key role as a main link between China’s economy and global markets.
• Ross i in Sao Paulo | The U.S. Commerce chief is reinforcing commercial and economic ties with Brazilian officials.

Coming Up

• July 30-31: U.S.-China trade talks in Shanghai
• Aug. 1: South Korean exports

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

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