Trump’s choice of a billionaire as Commerce Secretary could backfire on Republicans

Presidential candidate Donald Trump promised to cheering crowds across the country that he would impose blanket tariffs to raise revenue to replace income taxes and rebuild American manufacturing. In a sign that he will not achieve that goal, President-elect Trump this week named billionaire investment bank CEO Howard Lutnick to lead his trade and tariffs agenda.

Trump’s proposed two-for-one deal for a Cabinet seat — appointing Lutnik as Commerce Secretary but assigning him “additional direct responsibility for the Office of the U.S. Trade Representative” — bodes ill for voters in the working class that delivered vital swing states and the presidency. Trump. Lutnick’s public statements suggest he knows little about trading. His long career on Wall Street has instilled in him views on tariffs that run counter to Trump’s and makes him highly susceptible to persuasion by any corporate lobbyist he encounters in the private jet hangar.

But Lutnick’s nomination could be a real bonus for Democrats looking to regain long-standing support from voters without college degrees and those who make less than $100,000 annually. His likely failure to craft policies that meet the expectations of this demographic group could provide Democrats with a golden opportunity to determine who will stand up for working people economically.

Trump sensed what research shows: Voters across the country most affected by past trade-related job losses view tariffs, regardless of whether they create jobs or not, as a “sign of political solidarity” that expresses that they stand up for their community.

Apparently forgetting how his trade calls delivered swing states and a Trump victory in 2016, Harris dove into Trump’s tariff trap. She attacked Trump’s tariff proposal on the stump and then at the start of the one and only debate, allowing Trump to make clear to the nation that what Harris called his “national sales tax” was actually his promised tariffs. Minnesota Governor Tim Walz, Harris’ pick for vice president, and her surrogates like Mark Cuban attacked “Trump’s tariffs.” So did a Harris ad that played in western Pennsylvania. In mid-September, a Reuters poll found that 56% of all Americans supported Trump’s tariffs.

The Harris campaign inexplicably failed to promote how the Biden-Harris administration’s industrial policies and tariffs, which were bigger than Trump’s, led to the highest investments in building new U.S. factories in thirty years. Or that before the opening of those factories, the government had already created 150,000 more manufacturing jobs than Trump. Nor has Harris’ campaign held Trump accountable for failing to deliver on his 2016 trade promises to end job offshoring and our trade deficit.

There was clever politics behind Trump’s apparent tariff fetish, but now someone in Trumplandia II has to translate that into policy and action. It is highly unlikely that this is Lutnick, a snooty Wall Street insider who has been in business for decades. He toured the cable and podcast circuit in the run-up to the election, proclaiming that the only good use of tariffs is as a “bargaining chip” in negotiating yet more tariff-reducing trade deals.

Wait, like the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) that Trump and many American voters oppose?

Lutnick recently insinuated to CNBC that Trump may be tricking voters and is really in favor of Lutnick’s temporary, targeted tariff approach. Asked whether Trump would impose his promised blanket tariffs, Lutnick said: “When you run for office, you make broad statements so people understand you. … But he understands: don’t charge rates on things we don’t make.”

So will Lutnick eliminate the tariffs that Trump has imposed — and Biden has increased — on solar panels, microchips and medical equipment, imposed precisely because we need to rebuild the capacity to produce significant supplies of these critical goods that we no longer make?

At best, Lutnick is so ignorant about trade that he is unaware that his opposition to Trump’s blanket tariffs conflicts with his enthusiasm for Trump’s idea that tariffs can replace income taxes as a major source of government revenue.

These Lutnick flubs aren’t even sophisticated things. Contrary to what he has said, US auto exports in Europe and Japan are not facing 100% tariffs. Cars from there do not enter here tax-free. The Marshall Plan has nothing to do with this imaginary regime. Reciprocal duty-free trade is not an answer to today’s biggest trade challenge: how and when to trade with countries like China that employ massive subsidies and/or currency manipulation, artificially suppress wages by undermining workers’ rights, and drive down costs through environmental dumping.

Furthermore, being clueless makes Lutnick highly susceptible to the interference of special interest lobbyists and the anti-change career government officials Trump calls the “deep state.” Recall that during Trump’s first term, U.S. Trade Representative Robert Lighthizer was alone among Trump’s senior economic officials with the informed vision, technical knowledge and political savvy to deliver on his boss’s trade promises.

Putting Lutnick in charge of things is highly unlikely to end well – for Trump, Lutnick or, most importantly, for the American people. Democrats could benefit from this — that is, if they don’t bring themselves to their knees again by, for example, adding anti-tariff attacks to their fight against Trump’s promised tax cuts for the wealthiest. (Policy-wise, tariffs do not automatically increase consumer prices.)

In the future, Democrats can take trade back as their issue by explaining that tariffs are an essential defense against unfair imports that occur under labor and environmental conditions with which we cannot and should not compete, and other anti-competitive strategies that countries employ so that their unfairly dominate products. markets. Without tariff defense, such goods will meet domestic demand and deprive U.S. producers of a fair market, chilling investment in new capacity, crushing domestic production, and leaving us more vulnerable than ever to overly concentrated production and long brittle supply chains .

Democrats can challenge Trump’s approach by showing that rates only will not build new manufacturing capacity, ensure Americans have reliable access to goods, or improve our security. During the Trump years before the pandemic, U.S. industrial investment stagnated, even after significant tariffs. Investments in US manufacturing only took off in late 2021 after the passage of the Democrats’ infrastructure bill. Then, following the enactment of the Inflation Reduction Act and the CHIPS and Science Act in April 2022, a US investment record set in 2015 was surpassed.

These are the gains that Trump will end if he follows through on his promises to destroy Democrats’ industrial policy programs. Combining tariffs with taxes, investments, purchasing and other industrial policy tools began to reverse decades of American deindustrialization, which the entire country realized was not just a problem for manufacturing workers, but a problem for all of us when Covid and the resulting supply chain shocks exposed our economy. lack of resilience. The political party that implements American trade policies that benefit working people, smaller manufacturers, independent farmers and consumers will build an electoral majority. It is unlikely that Lutnick can help the Republican Party in that mission.

This article was originally published on MSNBC.com