Latest news with #RobertLighthizer
Forbes
6 days ago
- Business
- Forbes
Ronald Reagan Would Have Hated Trump's Tariffs
Ronald Reagan was no fan of tariffs. In fact, he was an ardent (if inconstant) champion of free trade and open markets. If that fact surprises you, it's probably because modern-day protectionists — including champions of President Trump's on-again, off-again trade war — have been working feverishly to recruit Reagan to their cause. 'While Ronald Reagan spoke in favor of free trade, in his heart he was always a strong advocate for American national interests,' insisted Robert Lighthizer in his 2023 book, No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers. 'President Reagan distinguished between free trade in theory and free trade in practice,' Lighthizer continued. 'He imposed quotas on imported steel, protected Harley-Davidson from Japanese competition, restrained imports of semiconductors and automobiles, took on the overvalued dollar, and pursued similar steps to keep American industry strong during the 1980s.' This sort of historical revisionism is hard work, given the mountain of evidence supporting the opposite conclusion. Lighthizer's litany of Reagan's protectionism isn't wrong, but it's definitely selective. In particular, it brushes aside Reagan's many public statements extolling the virtues of free trade — and denouncing the politics of protection. 'A creative, competitive America is the answer to a changing world, not trade wars that would close doors, create greater barriers, and destroy millions of jobs,' Reagan declared in one typical statement. 'We should always remember: Protectionism is destructionism.' Protectionist Claims To be fair, the case for Reagan-as-protectionist is not devoid of merit. Over the course of his two terms in the White House, he embraced a variety of protectionist policies, including export quotas on foreign producers of automobiles, steel, textiles, and apparel. How can we explain Reagan's departures from free trade orthodoxy? Was he confused? Conflicted? Or maybe just a hypocrite? All of these things, probably, but only in the sense that almost every politician is sometimes forced to sacrifice ideals for the sake of expediency. As Reagan began his presidency in 1981, the United States was facing a range of challenging economic pressures; rising unemployment and high interest rates were making things hard for many Americans. Some of these problems were linked — both in reality and in the public mind — to international trade, and the new president faced immediate pressure to aid industries struggling in the face of tough foreign competition. 'The intensification of foreign competition meant that the political pressures for import restrictions increased dramatically,' explained Douglas Irwin in Clashing Over Commerce, his indispensable history of U.S. trade policy. 'The Reagan administration responded by limiting imports in many sectors, but also resisted congressional pressure to do more, particularly with respect to Japan.' The second half of Irwin's point is crucial because it helps to explain Reagan's most egregious departure from free trade principles. In 1981 he negotiated a 'voluntary export restraint' agreement with the Japanese government — a quota, essentially, on the number of cars that Japanese automakers could send to the United States in a year. This agreement has always been Exhibit No. 1 in the protectionist case to claim Reagan as one of their own. (See Wells King and Dan Vaughn Jr., 'The Import Quota That Remade the Auto Industry,' American Compass (Sept. 2022).) Did Reagan's auto quotas reveal him to be a hypocrite? More like a pragmatist, according to one of his close associates from the time. In a recent Wall Street Journal op-ed, former Senator Phil Gramm, R-Texas, explained the 1981 car quotas as a political necessity. Reagan 'agreed to the compromise only to prevent lawmakers from passing more extreme protectionist legislation,' he wrote. 'The president hated the deal.' (Gramm, 'Ronald Reagan Was No Protectionist,' The Wall Street Journal, July 23, 2025.) But even if we accept Gramm's explanation for the voluntary export restraint agreement, we still have to make sense of Reagan's other departures from free trade orthodoxy. There were more than a few. 'Despite its free-trade rhetoric but in light of the tremendous shocks affecting traded-goods industries, the Reagan administration often accommodated domestic industries seeking relief from foreign competition,' Irwin said in his history of the period. 'At critical junctures, the administration either made a political calculation about the electoral benefits of protecting large industries from imports, or restricted imports to forestall congressional legislation.' Trade restrictions were already rising before Reagan took the oath of office. The share of imports covered by some form of restriction rose from 8 percent in 1975 to 12 percent in 1980, according to Irwin. But during Reagan's first term, the pace picked up — by 1984, 21 percent of imports faced trade restrictions. Like Gramm, Reagan economic adviser William Niskanen has explained the trade restrictions as a function of political pressure. 'Trade policy in the Reagan Administration is best described as a strategic retreat,' Niskanen wrote in Reaganomics: An Insider's Account of the Policies and the People. 'The consistent goal of the president was free trade, both in the United States and abroad. In response to domestic political pressure, however, the administration imposed more new restraints on trade than any administration since Hoover.' Hoover! Those were fighting words. Niskanen was willing to make excuses for Reagan, insisting that the administration was trying 'to build a five-foot trade wall in order to deter a ten-foot wall established by Congress.' But Niskanen refused to give Reagan a free pass: 'A strategic retreat is regarded as the most difficult military maneuver and may be better than the most likely alternative, but it is not a satisfactory outcome,' he concluded. Intentions Matter Reagan's compromises were important and undeniable. But so was his broader, consistent, and forceful commitment to free trade. In countless statements and public speeches, he declared his commitment to open markets and robust international trade. It's hard to choose a single statement epitomizing Reagan's commitment to free trade — there are so many! But one good candidate dates from September 1985, when Reagan was meeting with business leaders at the White House. 'Let me say at the outset that our trade policy rests firmly on the foundation of free and open markets — free trade,' he declared at the start. 'I, like you, recognize the inescapable conclusion that all of history has taught: The freer the flow of world trade, the stronger the tides for human progress and peace among nations.' Reagan was explicit about the benefits of open markets, both at home and abroad. 'They produce more jobs, a more productive use of our nation's resources, more rapid innovation, and a higher standard of living,' he said. 'They strengthen our national security because our economy, the bedrock of our defense, is stronger.' Reagan emphasized America's pivotal role in advancing the cause of free trade around the globe. And he offered a warning to those who might undermine that role. 'I'm pleased that the United States has played the critical role of ensuring and promoting an open trading system since World War II,' he told the business leaders. 'And I know that if we ever faltered in the defense and promotion of the worldwide free trading system, that system will collapse, to the detriment of all.' Fair Trade Reagan frequently emphasized the importance of 'fair trade,' insisting that the United States couldn't go it alone in trying to remove trade barriers. 'To make the international trading system work, all must abide by the rules,' Reagan said in that same 1985 meeting with business leaders. 'All must work to guarantee open markets. Above all else, free trade is, by definition, fair trade.' The U.S. role in advancing free trade was crucial, but it was not sufficient. 'No nation, even one as large and as powerful as the United States, can, by itself, ensure a free trading system,' Reagan warned. 'All that we and others have done to provide for the free flow of goods and services and capital is based on cooperation. And our trading partners must join us in working to improve the system of trade that has contributed so much to economic growth and the security of our allies and of ourselves.' Indeed, Reagan believed that a commitment to free trade implied a responsibility to fight for it. Free traders had to oppose unfree trade practices wherever they found them. And Reagan was specific about the bad behavior he was determined to challenge: 'When domestic markets are closed to the exports of others, it is no longer free trade. When governments subsidize their manufacturers and farmers so that they can dump goods in other markets, it is no longer free trade. When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade. When governments assist their exporters in ways that violate international laws, then the playing field is no longer level, and there is no longer free trade. When governments subsidize industries for commercial advantage and underwrite costs, placing an unfair burden on competitors, that is not free trade.' Reagan promised to fight those practices with all the tools at his disposal. He instructed the Office of the U.S. Trade Representative to initiate unfair trade practice investigations against Brazil, Japan, and Korea, he told the business leaders. The Office of the U.S. Trade Representative was also examining common market restrictions on some food imports. The United States would continue to work with allies in the spirit of trade cooperation, Reagan said. But America would demand good behavior. 'I also want the American people and our trading partners to know that we will take all the action that is necessary to pursue our rights and interests in international commerce under our laws and the GATT [General Agreement on Tariffs and Trade] to see that other nations live up to their obligations and their trade agreements with us,' he said. Reagan's message was simple and firm: 'I believe that if trade is not fair for all, then trade is free in name only. I will not stand by and watch American businesses fail because of unfair trading practices abroad. I will not stand by and watch American workers lose their jobs because other nations do not play by the rules.' This was tough talk — and good politics, too. Modern-day protectionists have seized on it to cast Reagan as something less than a free trader, and fans of the current president have used these sentiments to link The Gipper to The Donald. But Reagan's ideological and idealistic commitment to free trade was wholly different than Trump's self-proclaimed love for trade restrictions in their own right. Reagan viewed the tough measures of 'fair trade' as a necessary tool for reaching an end state of 'free trade.' By contrast, Trump seems enamored of high tariffs in their own right, often touting their role as a permanent source of federal revenue. He has even floated the idea of completely replacing the federal income tax with an array of permanent high tariffs. (Robert Goulder and Joseph J. Thorndike, 'Trump on Tariffs: Can We Replace Income Taxes?' Tax Notes Live, Sept. 4, 2024.) Reagan's Confidence If Reagan was committed to defending U.S. interests, he was also convinced that Americans could win a fair fight in the global economy. 'American business has never been afraid to compete,' he declared. 'I know that when a trading system follows the rules of free trade, when there is equal opportunity to compete, American business is as innovative, efficient, and competitive as any in the world. I also know that the American worker is as good and productive as any in the world.' Reagan understood that free trade could be challenging. While it produced lots of winners, it created losers, too. 'I'm not unmindful that within this prosperity, some industries and workers face difficulties,' he said. 'To the workers who have been displaced by industrial shifts within our society, we are committed to help. To those industries that are victims of unfair trade, we will work unceasingly to have those practices eliminated.' Ultimately, however, Reagan insisted that the costs of protectionism were always higher than the costs of free trade. Although he said that 'there are some, well-meaning in motive, who have proposed bills and programs that are purely protectionist in nature,' he emphasized: 'These proposals would raise the costs of the goods and services that American consumers across the land would have to pay. They would invite retaliation by our trading partners abroad; would in turn lose jobs for those American workers in industries that would be the victims of such retaliation; would rekindle inflation; would strain international relations; and would impair the stability of the international financial and trading systems. The net result of these counterproductive proposals would not be to protect consumers or workers or farmers or businesses. In fact, just the reverse would happen. We would lose markets, we would lose jobs, and we would lose our prosperity.' Reagan's warning about the perils of protection was rooted in an optimistic view of the global economy. Trump almost always casts trade in zero-sum terms, with lots of talk about winners and losers. Reagan rejected this sort of framing, insisting that every nation could prosper in a world free of trade barriers. Real growth was shared growth. Idealism and Pragmatism In trying to make sense of Reagan's trade policies, it's important to remember that he was, first and last, a politician. Like every president, he was compelled to make compromises, some of them distasteful, but many of them unavoidable — and arguably good for the country. As Gramm observed in his Wall Street Journal essay: 'Reagan was both an idealist and realist. He was practical and understood that leadership requires hard trade-offs. By compromising on a voluntary agreement to limit auto imports, he stopped protectionist legislation, passed his budget program, stopped inflation, cut tax rates, revitalized the economy and won the Cold War. Reagan explained his compromise to me as 'kissing the pig' — a term he used to describe a bitter task required to promote the greater good.' Gramm is a bit of a Reagan fanboy, but his basic point is valid. Reagan's protectionist compromises are undeniable, but so was his commitment to the ideals and long-term viability of free trade. As he said in his 1988 State of the Union address: 'Where others fear trade and economic growth, we see opportunities for creating new wealth and undreamed-of opportunities for millions in our own land and beyond. Where others seek to throw up barriers, we seek to bring them down. Where others take counsel of their fears, we follow our hopes.' Does that sound like Trump? Not to my ears. And many of Reagan's concrete actions on trade policy weren't very Trump-like either. He pursued international agreements to reduce trade barriers and provide mechanisms for resolving trade disputes. He embraced those institutions when attempting to resolve trade disputes over the course of his presidency. And he was especially optimistic about the benefits of free trade on the North American continent. On balance it seems unlikely that Reagan would have supported Trump's tariff policies. He would have rejected Trump's combative vision of the world economy. And it seems more than likely that he would have been suspicious of Trump himself. As Reagan warned in one of his most famous statements about trade: 'We should beware of the demagogues who are ready to declare a trade war against our friends — weakening our economy, our national security, and the entire free world — all while cynically waving the American flag.'
Wall Street Journal
27-07-2025
- Business
- Wall Street Journal
Reagan Prized Free Markets
Phil Gramm's op-ed 'Ronald Reagan was No Protectionist' (July 24) is absolutely right. Despite efforts by Oren Cass, Robert Lighthizer and other national conservatives to get the Gipper on their side, Reagan favored free trade and opposed protectionism. He wanted to cut taxes on trade, not raise them. One need only listen to Reagan's words and observe his actions. In 1985, Reagan stated 'our trade policy rests firmly on the foundation of free and open markets—free trade.' He argued that 'Instead of protectionism, we should call it destructionism. It destroys jobs, weakens our industries, harms exports, costs billions of dollars to consumers, and damages our overall economy.'
Politico
23-07-2025
- Business
- Politico
The Canadian Leader Who Isn't Fretting Over Trump
Well, there's two things. I read his book, 'The Art of the Deal,' and I read Robert Lighthizer's book as well. I also read a little bit about President McKinley. So I take the president seriously when he says that there's certain things that he wants to do. He likes the idea of tariffs as a way of generating revenue. He's obviously targeting certain industries that he wants to be homegrown in the United States, and so I think we have to understand that's the case as well. But it seems to me that there's also a lot of room for common ground. When I look at Alberta, none of our energy resources are tariffed. None of our agriculture products are tariffed. The vast majority of goods crossing the border are [U.S.-Mexico-Canada] agreement compliant. He does have particular issues that he has with some particular industries. When he identifies an area that's a trade irritant, that means it probably is, and trying to find a way to get a resolution is probably the way to get a renegotiated deal. What's your sense of negotiations at the moment? Carney understands that it might be difficult to get back to the full tariff-free relationship that we enjoyed before. I don't know what that means. I don't know if that means that there's certain sectors that are going to continue to face a tariff threat, or if there's going to be an across-the-board tariff. I'm not quite sure. I guess we'll find out when we have a chance to talk with him. Canada did demonstrate some goodwill in removing the Digital Services Tax, which was something that was causing aggravation to the administration, and so I would hope that would have helped to soften the waters so that we would be able to get an agreement on August 1st. I think everyone is still holding out some hope that will happen. I'm told the president doesn't like the emotional reaction Canada has had in response to his tariffs. You appear to take the emotion out of the negotiations and treat the tariffs more like a business transaction. Do you think the Liberal government and even Ontario Premier Doug Ford have been too emotional at times when responding to the tariffs? Different people respond in different ways. I think some people are worried about the damage to the relationship. I'm a bit worried about that too. But I also know that we have a longstanding relationship with the Americans that goes back over 100 years, and it's going to last 100 years or more. You don't allow for temporary frustrations and irritations to damage the relationship permanently.
Finextra
05-06-2025
- Business
- Finextra
Citi to lay off 3500 tech staff in China
Citi is to lay off 3500 tech staff in China as part of a major revamp of the bank's global operations. 1 The jobs affected are mostly in the information technology services unit, providing software technology development, testing and maintenance and operational services for Citi's global business. Citi say some of the roles will be relocated to the US and other sites, but declined to provide specific details. 'China has always been an important part of Citi's global network and business development. We will continue to firmly serve corporate and institutional clients in China and serve their cross-border banking needs,' Marc Luet, president of Citi Japan North Asia and Australia said in a statement. The switch comes amid heightened tensions between China and the US, as Donald Trump's tariffs mania leads to a further deteriortation in relations between the two global superpowers. Citi in May hired former US trade representative Robert Lighthizer to advise on tariff implications. Lighthizer served during Trump's first term, imposing tariffs on China and renegotiating the North American Free Trade Agreement (NAFTA) with Mexico and Canada. A business survey from the American Chamber of Commerce in China showed the share of US companies in China considering to relocate manufacturing or sourcing out of China hit a record high, at the outset of Trump's second term.
Yahoo
28-05-2025
- Business
- Yahoo
Citi hosts the Citi Singapore Macro and Pan Asia Investor Conference from 28 to 30 May
SINGAPORE, May 28, 2025 /PRNewswire/ -- Citi hosts the Citi Singapore Macro and Pan Asia Investor Conference from 28 to 30 May The conference brings together distinguished political and economic experts for a series of multi-dimensional discussions focused on the latest geopolitical developments, economic outlook and topical investment themes impacting the financial industry. Over the next three days, Citi is expecting over 1,500 delegates including clients, investors, corporates, family offices, and private bankers to attend the conference, which includes over 20 panels and presentations and almost 7,000 meetings between corporates and experts. Key speakers include: Robert Lighthizer, Chair of the Center for American Trade at AFPI and Former United States Trade Representative and Senior Advisor to Citi's clients on global trade, Loretta Mester, Former President and CEO, Federal Reserve Bank of Cleveland, and Dr Lawrence Summers, Former United States Secretary of the Treasury. Sue Lee, Head of Markets for Asia South at Citi, said, "We are entering a new era of trade policy and globalization, marking a deep structural shift in how markets move and how businesses operate. Citi's leading Markets franchise with a wide global footprint uniquely positions us to support our clients as they navigate this new environment." Citi's Markets business serves corporates, institutional investors, and governments from trading floors in almost 80 countries. The strength of our underwriting, sales and trading and distribution capabilities span asset classes (Commodities, Equities, Rates, Spread Products and FX), providing us with an unmatched ability to meet the needs of our clients. View original content to download multimedia: SOURCE Citi Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
