This Is No Time for Protectionism
The first third of President Joe Biden’s State of the Union speech proudly repudiated his predecessor’s foreign-policy agenda. Biden denounced aggression, scorned dictators, praised democracy, and saluted allies: item by item, the opposite of Donald Trump’s approach.
Then came a repeated series of promises to legislate “Buy American” into every form of government action and procurement. Trump-style nationalism—repudiated as foreign policy—was rehabilitated as domestic policy.
The architects of the postwar liberal order understood that collective security and free trade buttressed each other. Trump rejected both. Biden last night endorsed one and rejected the other.
“When we use taxpayers’ dollars to rebuild America, we are going to do it by buying American: Buy American products, support American jobs,” he said.
When not speaking to the cameras, the president and officials in his administration typically add a caveat: “consistent with the United States’ international obligations.” This acknowledges that the North American Free Trade Agreement and other trade pacts have committed the United States to allow equal access to its own government procurement in return for access to government procurement abroad.
But first under the Recovery Act of 2009, and then under the big spending bills of the Biden administration, federal dollars have often been routed through the states. And state spending has a much more uncertain relationship to the free-trade commitments signed by presidents and ratified by the Senate.
Biden’s speech went further, though. He seems to intend to evade all treaty requirements, and all concern for efficient spending.
There’s been a law on the books for almost a century to make sure taxpayers’ dollars support American jobs and businesses.
Every administration, Democrat and Republican, says they’ll do it, but we are actually doing it.
We will buy American to make sure everything from the deck of an aircraft carrier to the steel on highway guardrails is made in America from beginning to end. All of it. All of it.
The reason past administrations have evaded the Buy American Act of 1933 is encoded right there in the name: 1933. Economic nationalism triggered and prolonged the Great Depression—and those Americans who had endured that trauma committed themselves to never repeat it.
But memories fade, and new challenges can invite the return of old errors. In the 21st century, the free-trade idea has lost its hold on both parties: spectacularly so with the Republicans under Trump, and less noisily, but maybe more widely, with the Democrats under Biden.
It’s often observed that Joe Biden through his long career has not been a leader of Democrats, but instead always a leading indicator. Wherever the Democrats were going, there he went—seldom first, but never last. A friendly critic quipped: “You might let your conscience be your guide; Biden stuck with the median voter.” Amend that sentence to read “median Democrat” instead of “median voter,” and you have grasped the essence of Biden’s approach to politics. He now heads a party that has lost faith in trade, and so Biden has jettisoned that faith too.
State of the Union addresses are organized not according to principles of logic, but according to the discipline of the clock. A lot of viewers watch the beginning, but the longer the speech extends, the more they drift away. Only the most loyal partisans of the president can be relied on to endure to the end.
That’s why, in this speech, price controls for prescription drugs were discussed before higher taxes for wealthy people and corporations, why higher taxes for wealthy people and corporations were discussed before the gun-control agenda, why guns before abortion rights, and abortion rights before transgender rights. By the end of the speech, Biden was rallying his Democratic Party faithful in advance of the 2022 down-ballot elections. Biden’s career-long way to rally the faithful has been to tell them what they want to hear.
Necessary words to the nation and the world about support for embattled Ukraine opened the speech. After that, Biden proceeded to what he and his team regard as a potentially decisive issue in 2022: economic nationalism. Trump grabbed that issue for Republicans ahead of the 2016 election. On the evidence of this speech, Biden’s top priority is to grab it back for 2022.
The great trouble for the country and the world is that the message of economic nationalism is especially and ominously ill-timed in this moment of global crisis. The time is never good for protectionism. But it should be especially unwelcome during the Russian war against Ukraine. The United States and its partners have sought to help Ukraine by applying globally coordinated economic and financial sanctions against Russia: sanctions supported not only by Ukraine’s near neighbors in the European Union, but by Asian partners too. We should be reminded in this crisis of how much we all benefit from economic cooperation and financial integration. Instead, the Biden administration seeks those benefits in its foreign policy, and then defects from them in its policy at home.
Free trade is not a gift from Americans to others. Free trade enriches Americans too. It creates global markets for the goods and services that Americans sell most competitively: everything from soybeans to pharmaceuticals to insurance to software. Free trade reduces prices for the things Americans buy, and especially for the things bought most often by the poorest Americans. With inflation concerns uppermost in mind, it seems irrational to the point of perversity for Biden to volunteer the U.S. taxpayer to pay unnecessarily high prices for goods and services that could be bought more cheaply from partners and allies. It seems irrational to the point of perversity to pledge that Americans would fight and die to protect, say, South Korea from invasion, but not buy highway fenders from South Korea if South Korea can sell them for less.
Biden used to be a free trader. As a senator he voted in favor of NAFTA in 1993 and for permanent normal trade relations with China in 2000. He understands what he’s turning his back on. If he surrenders that understanding to routine party management before the 2022 election, how does he recover if faced with a Republican-controlled, “America First” House of Representatives after 2022? And when the initial enthusiasm for the Ukrainian cause subsides, how will Biden sustain a global coalition for democracy at the same time as he is weakening trade relationships among the democracies?
Whether Biden decides to remain on the ballot in 2024 or not, the Democratic future appears to belong to the constituencies Biden was trying to appease and excite in his address last night. Biden and his team might be right about their party. But if they are, who is left to champion global trade, which created the wealth that is now defending global security against the rockets and bombs of predatory Russian imperialism?