Overview:

Chapter 26 presents two contrasting views on U.S. trade policy, highlighting the ongoing debate within the conservative movement between proponents of “fair trade” and advocates for “free trade.”

Key Takeaways:

  • Two Competing Visions: The chapter features two opposing arguments: one for a protectionist “fair trade” approach (Peter Navarro) and one for a “free trade” approach that emphasizes open markets (Kent Lassman).
  • Trade Deficits vs. Economic Growth: Navarro argues that trade deficits are harmful and that the U.S. needs to protect its industries from unfair competition, particularly from China, while Lassman argues that free trade promotes economic growth and benefits consumers.
  • Tariffs vs. Free Trade Agreements: Navarro supports tariffs and other trade barriers to protect American jobs and businesses, while Lassman advocates for reducing trade barriers and negotiating free trade agreements.
  • Decoupling from China vs. Engagement: Navarro calls for decoupling the U.S. economy from China’s, arguing that China poses a threat to national security, while Lassman believes that engaging with China through trade is the best way to encourage reform.

Critical Quotes:

  • Navarro: “America’s record on trade—specifically American’s chronic and ever-expanding trade deficit—says that America is the globe’s biggest trade loser and a victim of unfair, unbalanced, and nonreciprocal trade.”
  • Lassman: “Trade policy is about more than goods and services: It is a statement of American identity. Our trade policy choices reveal America’s values and where we put our trust.”

Why It Matters:

This chapter highlights the divisions within the conservative movement on trade policy, with implications for the U.S. economy, global trade relations, and American workers. The direction of U.S. trade policy under a future conservative administration is uncertain and will depend on which of these viewpoints prevails.

Red Flags:

  • Trade Wars: Navarro’s protectionist approach could lead to trade wars that harm both the U.S. economy and the global trading system.
  • Higher Prices for Consumers: Tariffs and other trade barriers would likely lead to higher prices for consumers and reduced choices.
  • Job Losses: While Navarro argues that protectionism would protect American jobs, it could also lead to job losses in industries that rely on imports or that are harmed by retaliatory tariffs.

Bottom Line:

Chapter 26 reveals a lack of consensus within the conservative movement on trade policy, reflecting the broader debate within the Republican Party about the role of government in the economy and the best way to promote American prosperity. The outcome of this debate will have significant consequences for the U.S. economy and its place in the world.