Whether the policy is under Joe Biden or Donald Trump or any preceding president, the notion of “free trade” is a bit of a misnomer.
The United States and other nations actually engage in managed trade, with incentives for selling exports and purchasing imports while enacting protections for their particular interests.
That management is particularly important for Washington, regarded as the nation’s most trade-dependent state. And the impact of trade policy, a pandemic and global shipping congestion is being felt here.
According to the Washington Apple Commission, growers had exported 18.8 million 40-pound boxes from the 2020-21 crop as of last week; that was a decline of 20.5 percent from the same time the previous year.
Some of that is due to the pandemic and shipping woes. Some of it is due to trade policy. When Trump imposed tariffs on imported steel and aluminum in 2018, a tariff battle was launched.
For example, in 2019 India imposed an additional 20 percent tariff on apples, bringing the total duty to 70 percent. India had been a popular destination for Red Delicious apples from Washington.
Apples and cherries sent to China now face a 50 percent tariff. Just four years ago, 3.3 million 20-pound boxes of cherries were shipped to China; that declined to 1.9 million boxes in 2019 and to just over 1 million last year.
For now and perhaps longer, the Biden administration is continuing Trump’s trade policies. Katherine Tai, confirmed by the Senate as the new U.S. trade representative, has supported the use of tariffs to achieve equitable trade policies.
She said the administration intends “to break out of that pattern, so that what we are doing in trade is coordinated with what we are doing in other areas, but also not forcing us to pit one of our segments of our workers and our economy against another.”
That must include guardrails against intellectual property theft by foreign entities, particularly the Chinese government. When American companies demonstrate their innovation and creativity, they should not have to worry about knockoffs quickly appearing overseas.
Policy also must use international trade as a bulwark against China violating international law to increase its economic influence.
For generations, support of free trade has driven American economic policy. That has generated wealth both here and abroad, helping to create an interlinked global economy that has increased wages for millions and has lowered prices for American consumers.
But with wealth inequity drawing increasing attention and with Trump’s “America first” policies tapping into this nation’s zeitgeist, members of both political parties are willing to scale back the quest for open trade.
A recent poll from Reuters-Ipsos finds that a strong majority of Americans believes government should purchase goods made in this country – but are reluctant to do so themselves if foreign-made products are less expensive. The contradiction represents the difficult balance of federal trade policy.
As Jon Talton writes for The Seattle Times: “A tougher American stance brings consequences. For one thing, tariffs are essentially taxes on end-users, whether businesses or consumers. Also, American exporters have much to lose.”
Producers, transporters and exporters in Washington already are feeling that loss. Sound trade policy from the Biden administration is particularly important to our state.