From Reagan to Trump: The Origins of US Neoliberal Protectionism

Abstract

Donald Trump is often seen as a radical departure from the neoliberalism that has shaped recent American history and, at first glance, nowhere does this seem truer than on trade. Trump’s support for protectionism certainly seems to depart from neoliberalism, which we are used to thinking of as involving unqualified support for free trade. But should this really be seen as a departure? This paper argues that, instead, Trump’s trade policy should be seen a kind of ‘neoliberal protectionism’, which seeks to use the coercive power of the state to force other nations to conform to a market‐based economic logic. The origins of this neoliberal protectionism can be traced back to the 1980s when debates about foreign industrial policies first caused the United States to adopt a more aggressive approach to trade. From this perspective, Trump’s trade policy represents not a rejection of neoliberalism but an extreme articulation of it.

Forward to the 1980s: US strategic trade in the world order

“…The Reagan administration was particularly alert about maintaining American power in the global economy in the face of Japanese competition (Meinderts 2020 ). Even as Reagan advocated free trade, the administration and congress enforced trade barriers on imported textiles, auto parts, semiconductors, motorcycles, sugar, and steel (see more Wraight 2019 ; Brody 1998 , 95–97). Although the Cold War tightened security alliances, Republicans and Democrats in congresses pressured allies and used protectionism and at times free trade to bolster domestic firms at the expense of foreign firms.…”

“…301 which gave the USTR authority to investigate foreign trade practices that potentially damaged US commerce and to implement tariffs and non-tariff barriers (Bhagwati and Patrick 1991 ). Section 301 was designed to counter unfair trade but Reagan and Trump’s use of it illustrates how it became a coercive tool of protectionism (Meinderts 2020 ; Wraight 2019 ). The executive branch gained significant power to act on other states as they saw the international market becoming more competitive.…”

“…Both these administrations constructed an ideologically incoherent trade strategy, but one that was coherent in its aim to make domestic firms competitive in the world economy. These multiple tools are rooted in how the ‘neoliberal’ state functions in its reinforcement of market competition in the economy (Wraight 2019 ). Democrats and Republicans in the legislative and executive branches crafted tariffs, non-tariff barriers, free trade agreements, demanded reciprocal market access and regulatory standardization to consolidate US economic position in the world order.…”

“…It must be coercive against allies and incentivize them to act in US interests to enforce the US-led hierarchy to compete in the world. Similarly, the Reagan administration, despite the Soviet Union’s military power and threats of nuclear war, still coerced its allies–West Germany and Japan–over trade (see Vernon 1982 , 490–502; Brody 1998 , 96–97; Wraight 2019 ). A common threat did not extinguish an American desire to redress its allies over trade or military commitments.…”

‘Americanism not globalism will be our credo!’: An analysis of the economic nationalism(s) of Trump's administration and an agenda for further research

“…To be sure, Trump's economic nationalism has not been entirely ignored by scholars. But although these works have perceptively identified historical continuities between his administration and past manifestations of economic nationalism (Helleiner, 2019), American trade practices (Wraight, 2019) and Trump's own biography (Miller, 2018), such insights have not yet been put in the service of a broader project to advance a comparative research agenda on economic nationalism. Contributing to such a project is the primary goal of this article.…”