Donald Trump likes to call himself “Tariff Man.”
But the President isn’t the real mastermind behind the United States’ muscular use of tariffs to grab more of the spoils of global trade. The nickname rightly belongs to his trade envoy, U.S. Trade Representative Robert Lighthizer.
Mr. Lighthizer, 71, loves tariffs. More importantly, he knows how to use them. He’s been working up to this job most of his life. He has spent his entire career in Washington, as a trade negotiator, and as a lawyer for companies such as U.S. Steel. Through it all, he has pushed the limits of U.S. trade law to favour domestic companies over foreign rivals.
Making threats, holding consumers hostage, invoking tariffs in the name of national security and imposing emergency safeguards on imports; for Mr. Lighthizer, they’re the tools of protectionist trade craft.
And now he’s turned his dark arts on China in an epic showdown between the world’s two largest economies. U.S. and Chinese negotiators are working toward a March 1 deadline to reach a deal that addresses U.S. concerns about the large trade imbalance, unfair subsidies to state-owned companies, import restrictions and intellectual property theft. Unless he gets what he wants, Mr. Trump has threatened to hike tariffs on US$200-billion worth of Chinese imports to 25 per cent from 10 per cent.
There were hints of progress, as Mr. Lighthizer and his team squared off in Washington last week against his Chinese counterpart, Liu He. Reuters reported that the two sides have begun sketching out a memorandum of understanding covering six areas of proposed economic reforms by China. Mr. Trump hinted last week that the March 1 deadline could be pushed back if agreement is in sight.
Analysts are skeptical that China is really prepared to fundamentally reform its state-directed economy.
Even if Mr. Lighthizer gets only some of what he wants, the lesson won’t be lost on Washington. The gunslinger style of trade negotiations is back, regardless of whether Mr. Trump wins re-election next year. And countering China’s economic rise has become a cornerstone of U.S. foreign policy.
The Wall Street Journal said Mr. Trump had found a “kindred spirit” in Mr. Lighthizer. As the President put it: “He felt the way I did” on trade.
They are both blunt-speaking, and share a common narrative about who the villains are in the de-industrialization of the U.S. Mr. Trump’s lament in his 2017 inaugural address for the “rusted-out factories scattered like tombstones across the landscape of our nation” likely struck a chord with Mr. Lighthizer, who grew up in Ashtabula, Ohio, a faded Rust Belt town on Lake Erie.
Mr. Lighthizer and Mr. Trump are also like-minded in their suspicion of global organizations, such as the World Trade Organization. They would prefer to leverage U.S. economic strength in bilateral negotiations, rather than through international co-operation. And where things are manufactured is more important than the value built into them.
But they remain an odd couple. Mr. Lighthizer is focused, meticulous and shuns the limelight. Mr. Trump is, well, none of these things.
Mr. Lighthizer emerged from a cluster of economic advisers in the administration last year after successfully negotiating the U.S.-Mexico-Canada agreement to become Mr. Trump’s main voice on trade issues and lead negotiator with China. The also-rans include Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin, trade adviser Peter Navarro and departed National Economic Council director Gary Cohn.
Mr. Lighthizer has been warning about the dangers of China as far back as the mid-'90s. He opposed Beijing’s entry into the WTO in 2001, saying China would exploit membership to unfairly gain export market share. As U.S. Trade Representative, he has waged war on the WTO itself, refusing to approve new judges to the organization’s appeals court and testing the legal limits of tariff warfare.
Canada and other countries are closely watching the outcome of the U.S.-China talks to see just how far Mr. Lighthizer gets in forcing China to make significant structural changes.
The results could be bittersweet. Most WTO members will applaud if China further opens its market, curbs the power of its state-owned enterprises and embraces global intellectual property rules.
But the triumph of Tariff Man would also convince many that bullying rivals and shunning allies will make America great again.