Book review: No Trade is Free: Changing Course, Taking on China, and Helping America’s Workers by Robert Lighthizer
The cheat code for understanding Trump 2.0 on international trade
Pages: 384
Publisher: Broadside Books
Publication date: June 27, 2023
Date started: December 2, 2024
Date completed: December 16, 2024
This book is the cheat code for discovering and understanding Donald Trump’s trade and economic policy. The book itself is well organized. It does present a cogent argument as to what are the issues of US trade and the harm of the weakening of the US manufacturing base. It outlines the historical source of the issues as well as the root cause of the issues. It builds an argument towards its ultimate recommendations that are presented in detail.
It is a quick read. It is very approachable. If you care to try to understand the Trumpian view of trade and the use of tariffs this is the book. There is nothing lost in translation. No equivocation. It is a straight-shooting position paper.
The book is divided in several parts. The first four chapters he explains why he cares about trade policy, his overarching philosophy on international trade, and how this philosophy is part of American tradition, and how the WTO has failed America. One of his several thesis in the book is that returning manufacturing to America is vital. He reminds us “It is important to remember that the country became great by consuming. They came great by producing.”
If you did not know who wrote the book, you might at times think this was written by a socialist union-rights progressive politician. For example, consider this direct quote: “Simply put, I believe the American trade policy should revolve around helping working-class, American families. Enhancing corporate, profits, increasing economic, efficiency, and lowering consumer prices are important, but, in my view, secondary to this goal. When I look at the world today, the only practical way to help working people I see is to support the American manufacturing sector.”
He outlines the many flaws of the World Trade Organization (WTO) including the allowing of self designation of being a developing nation and therefore receive the benefit of that status. He points out how countries such as China (the second largest economy in the world), Mexico, India, Turkey, Saudi Arabia, Indonesia, South Africa, and Argentina inappropriately self designate themselves as a developing nation. He gives examples after examples of what he terms as unfair or unjust rulings against the US when other countries who do similarly or more egregiously are not ruled against.
In the next section, he discusses China. Three chapters are devoted in the book to explaining the threat that China poses to American security, how the Chinese economic model works, and how the model threatens American vitality. He minces no words about his thoughts on China and Chinese economic policies. Consider the following direct quote: “Now China is the greatest threat that the American nation in its system of western liberal Democratic government has faith since the American Revolution.” Pretty strong words. He argues that China abuses its position in the WTO and uses classical mercantilist practices, is protectionist featuring largely closed markets, inappropriately uses massive subsidies to contort the free market, uses State-Owned Enterprises (SOEs) that become zombies as they are impervious to market signals or the laws of supply and demand, engages in widespread industrial espionage robbing foreign companies of their intellectual property (IP), demand the use of joint ventures as means to rob IP and then later unfairly compete, incorporate massive investment controls, and the like to create huge surpluses while periodically manipulating its currency to drive exports unfairly. The three most serious sins he attributes to China are the use of disparate tariff rates, abusing the developing country loop hole, and taking advantage of its status as a Most Favored Nation (MFN).
In the next section, he goes into great detail of how the Trump 1.0 administration used tariffs to negotiate with China. He also explains in the book how he negotiated the North American Free Trade Agreement with Mexico in Canada into the USMCA.
In the fourth part of the book, he discusses various international trade issues and major trading partners in the global economy in the context of trade imbalances. Finally, his book has a proposed path forward with America’s approach to international trade that includes fixing the de minimus loophole that foreign countries use to frustrate our country’s existing duties and tax system. He also demonstrates the unfairness of the border adjustment system with its distinctions between direct and indirect taxation systems.
If you are a closed minded globalist, you will hate this book. If you are willing to suspend any preconceived notions and read with curiosity, you will likely come to the conclusion that this world view of trade is logical. You may not agree with it, but it is most decidedly not bonkers.
This book is the answer key to the question that many folks are struggling with now: What is Trump going to do when he enters office?
Clearly, this book portents that the old notions of competitive advantage and true free trade are over. Whereas in the past, success was judged by how cheap our stuff is to buy, this book plainly notes that success will be measured by: (1) the creation of new jobs, (2) real wage increase, (3) the movement of factories back to America, and (4) the reduction of trade deficits. Everything else is minor. Further, when one reads the book one can clearly see that in addition to China, there are many more targets that Trump 2.0 will line up including: Germany, Ireland, Italy, France, Japan, India, South Korea and Vietnam.
This book is worth the read but it not for the globalist who is set in his or her ways.
In conclusion, No Trade is Free: Changing Course, Taking on China, and Helping America’s Workers by Robert Lighthizer is a direct and unapologetic manifesto on reshaping America’s trade policies, with a sharp focus on reviving domestic manufacturing and prioritizing working-class families. Whether you agree or disagree with Lighthizer's arguments, the book provides a coherent, well-supported perspective on the Trump administration's trade philosophy and its implications for the future. It is a must-read for anyone seeking to understand the rationale behind Trumpian trade policies and their potential impact on global economics. For those willing to challenge conventional wisdom about globalization and free trade, this book offers a thought-provoking roadmap to a radically different approach to international trade and economic strategy.