The election of Donald Trump was a body blow to the so-called "Washington trade consensus," a coherent, if intellectually flawed, set of beliefs which holds that trade always benefits the U.S. economy and that any efforts to restrict it, even in the service of ensuring that our trading partners play by the rules, by definition is detrimental to economic growth. To the extent there are any negative short-term effects on particular groups, these adherents believe they can be alleviated by a slightly bigger dose of trade adjustment assistance. For them, the benefits to consumers outweigh the loss of jobs that went overseas, even if those moves were caused by pernicious mercantilist trade policies instead of market forces. But will the trade establishment get the message heard round the world or will they continue their practice of dismissing any contrarian voices as ignorant protectionists and isolationists? If my exchange with Richard Katz in this magazine is any indication, the answer is unlikely, at least for now.
The Spring 2016 issue of The International Economy published my article arguing that mercantilist policies in China and elsewhere hurt not only U.S. workers who were dislocated, but the American economy as a whole, and not only in the short-term. Prior to November 8, this message was treated by the Washington trade consensus as a foreign antibody that needed to be expelled at all costs. The prevailing "free trade" doctrine holds that while trade may hurt some individuals, it is always a benefit for the nation as whole, and arguing otherwise weakens faith in globalization and leads voters to stray from the true path. It's clear that more than half the electorate begs to differ. They understood from first-hand experience what can happen when trade isn't conducted on a level playing field.
In response to my article, in the Summer 2016 TIE Katz disagreed with the idea that trade was partly responsible for the loss of over five million U.S. manufacturing jobs in the 2000s and denied that the U.S. trade deficit should be a concern. Katz knows that to give ground on these two points is to open up major fissures in the dominant free trade consensus that holds that trade is always good, that the trade deficit is only an accounting function, and that the United States economy for all intents and purposes does not compete with other economies.
Before going on, let me be perfectly clear that my organization (the Information Technology and Innovation Foundation, the leading U.S. science and tech policy think tank) and I are not advocating "protectionism" and a retreat from globalization. Far from it. Deepening global integration is one of the most important tasks of U.S. economic policy, but only after America successfully contains and then...