Those wishing to blame the problems of the American working class on PNTR and freer markets more broadly often ignore the United States’ own long history of market interventions and their failures to help companies and workers. A core tenet of the current populist backlash against trade, and particularly trade with China, is that American “elites” opened the floodgates to Chinese imports with only a timid threat of the WTO dispute process to protect American workers from “unfair” competition. This ignores the mountain of government interventions that have been used—at the federal level alone—to restrict Chinese imports, otherwise protect or subsidize American manufacturers, and assist American workers.
On trade, the United States still maintains significant tariffs and tariff‐rate quotas on imports of “sensitive” products such as trucks, apparel, footwear, and food.72 Moreover, according to Global Trade Alert, the United States has been one of the most frequent users of “harmful” nontariff government trade interventions—ones that far outnumber its “liberalizing” measures over the same period.73 This includes, as of late 2019, almost 190 special duties (“trade remedies” such as antidumping and antisubsidy measures) on a variety of Chinese imports, two‐thirds of which (127 of 187) use a special “non‐market economy” antidumping methodology that practically ensures prohibitive duty rates on those goods (a “WTO‐plus” accession commitment special to China and a few others).74 These duties target “unfair” trade and subsidies that injure U.S. manufacturers and workers, and—as the numbers indicate—American companies and unions have been successful in petitioning for them. (There are around 500 duty orders in place overall.)
Dozens of other Chinese imports are barred from the U.S. market as a result of Section 337 actions that remedy intellectual property rights violations.75 Chinese investment in U.S. industries, meanwhile, can be (and has been) restricted by the Committee on Foreign Investment in the United States, and U.S. technology exports to China are often blocked on national security grounds.76
The U.S. government also has long provided financial and other support to favored industries and workers, for example through auto bailouts, steel industry bailouts, alternative energy subsidies, manufacturing tax credits, Export–Import Bank loans and other export assistance, procurement preferences such as the Buy American Act and the Davis–Bacon Act, shipping restrictions such as the Jones Act and the Passenger Vessel Services Act,77 and the billions of other taxpayer dollars that the United States has doled out to “blue collar” industries and workers over the past few decades at the federal level alone. As I documented in a 2012 paper on global subsidies and antisubsidy disciplines, “despite the obvious economic, legal, and political problems associated with domestic subsidies, the United States remains one of the world’s largest subsidizers.”78
The U.S. government has also repeatedly tried to fund and retrain workers, most notably through the Trade Adjustment Assistance (TAA) program, which offers generous subsidies to U.S. workers affected by import competition. Unfortunately, TAA has proven to be a “notorious failure”: as I noted in a 2016 article, “multiple studies commissioned by the Labor Department have found that TAA participants are worse off, as measured by future wages and benefits, than similarly situated jobless individuals outside the program.”79 The Wall Street Journal’s Eric Morath in December 2018 noted additional research into the failure of TAA to help workers allegedly displaced by trade in 2018 and a move by certain states to “de‐emphasize programs such as TAA in favor of getting workers back into jobs more quickly.”80 Other federal job‐training programs have been found to be similarly inefficacious, and related reform efforts have thus far been underwhelming.81
These and other government programs raise serious concerns when it comes to helping American workers adjust to trade and other shocks, and they need to be reformed. But that does not change the simple fact that these programs do exist and have for decades. These policies refute the claim that U.S. policymakers simply passed PNTR and walked away from the American working class out of some sort of “market fundamentalism” or rigid adherence to “laissez faire ideology.”
The real problem was that these interventions did not work very well. A classic example is the U.S. steel industry, whose companies and workers since the 1970s have arguably received more government assistance than any industry in the country. This includes hundreds of import restrictions; tens of billions of dollars in state, local, and federal subsidies and bailouts; exemptions from environmental regulations; special “Buy American” rules; federal pension benefit guarantees; and even its own caucus in Congress.82 The result: dramatic historical declines in employment and capitalization, numerous bankruptcies, and of course, continued demands for even more government protection (as the current Section 232 tariffs make clear).
The steel industry certainly is not alone. As a 2013 Congressional Research Service report concluded about the state of American manufacturing, “Although Congress has established a wide variety of tax preferences, direct subsidies, import restraints, and other federal programs with the goal of retaining or recapturing manufacturing jobs, only a small proportion of US workers is now employed in factories.”83
In short, there is scant evidence that Washington elites abandoned the American working class after liberalizing trade with China. The government’s interventions may have failed, but they were interventions nonetheless.