Why Is the Mastermind of Trump’s Tariff Plan Still Sitting at Home in Florida?
One way in which Donald Trump has already imposed his fixations on the American public is that tariffs are suddenly a major political topic. During the wintry interregnum between the election and his Inauguration, Trump responded to a Washington Post report that he intended to create a new tariff of ten per cent on many foreign goods entering the U.S., a prospect that would upend the global system of trade, by clarifying that his actual plans would cover all foreign goods. He then spent the first hours of his Administration promising to impose twenty-five-per-cent tariffs on goods from Mexico and Canada by February 1st and insisting he would establish an “External Revenue Service” to collect tariffs and “other foreign trade-related revenues.” Suddenly, there is a subgenre of financial news in which bankers coolly assign probabilities to immense changes to the supply chain and adjust valuations accordingly, and executives of companies that depend upon parts from abroad emerge to issue special pleadings. “Everyone’s got a pretty big case of anxiety here,” Steven Center, the head of Kia’s U.S. operations, told the Wall Street Journal. “In two words: Please don’t.”
But, if the new tariff regime has been hyper-publicized, it has also been somewhat undertheorized. If the plan is to disrupt the existing regime, in the conviction that global free trade has undermined American interests and workers, what is meant to replace it? Because virtually no mainstream economists think that universal tariffs are a good idea, there is no off-the-shelf policy model to adopt. Complicating the situation is that Trump’s nominee for Treasury Secretary, Scott Bessent, has tried to reassure Wall Street that the President’s tariff threats are merely a negotiating tactic. “My general view is that at the end of the day, he’s a free trader,” Bessent told the Financial Times this fall. “It’s escalate to de-escalate.”
Ever since Trump was first elected, in 2016, his main guru and interpreter on trade, the man largely charged with converting the President’s protectionist instincts into theory and practice, has been a voluble, savvy seventy-seven-year-old Washington lawyer named Robert Lighthizer—an operator, in the deepest American sense—who spent the first Trump term serving as U.S. Trade Representative. In those years, Trump’s economic nationalism was a more fringe position within the G.O.P. At one point, while Lighthizer was renegotiating the North American Free Trade Agreement, Trump called him into the Oval Office. “Bob, everyone is against you,” Trump said. Paul Ryan was calling him, seemingly incessantly. The card Lighthizer had to play was ideological affinity. “Mr. President,” he said, “that’s because I’m the only one who sees this the way you do.”
One Friday afternoon in December, I visited Lighthizer on Palm Beach Island—a few miles from Mar-a-Lago—where he now spends most of his time, in a condo in an Art Deco apartment building by the beach. He is now at a stage in life when Washington gurus look for disciples, but he has enough of them that the two finalists to be U.S. Trade Representative in the second Trump term, including Jamieson Greer, who was ultimately tapped for the role, were both his former aides. Lighthizer has been involved in economic policy since the late nineteen-seventies, when Bob Dole hired him to be the Republican staff director of the Senate Finance Committee; a few years later, he joined the Reagan Administration as a Deputy U.S. Trade Representative. Gordon Hanson, an economist at the Harvard Kennedy School, told me, “Nobody understands trade deals as well as Bob, since he negotiated many of them.” When other Republicans called Trump to lobby the White House on trade, the President would say, “Call Lighthizer.” His approach to bureaucratic combat was to suffuse the conversation with detail. “I had [Greg] Abbott of Texas call,” Lighthizer told me. “And of course, he’s smart and briefed and well prepared, but he made no headway at all because I knew the issue ten times as well as he did. Paul Ryan would call. I just keep talking as long as they want to talk.” (Abbott and Ryan did not respond to requests for comment.)
The view Lighthizer has come to after nearly half a century working on the issue is that free trade is a fiction, believed only by Americans and economists (and, intermittently, by the British). “Free trade doesn’t exist anywhere in the world,” he told me. “It just doesn’t. And it doesn’t largely because of details.” Even in the absence of tariffs, countries do all sorts of things to protect domestic manufacturing. “I have trouble explaining this even to anyone senior in government,” Lighthizer said. “It’s also the banking system. It’s the labor system, it’s the environmental system, it’s the general regulations, it’s the safety standards that all structure a market to favor domestic production and scale up exports.”
As Lighthizer sees it, technicalities in trade agreements can create whole industries in one part of the world and bankrupt a region somewhere else. An example he likes to cite is the “Rules of Origin” chapter of NAFTA, which originally stipulated that, for a car to be eligible for duty-free import, sixty-five per cent of it had to be of North American origin. But the “rules of origin” negotiated by the Clinton Administration failed to account for novel technologies. As Mexico entered into free-trade agreements of its own with Asian and European companies, it gained access to more foreign components, which soon accounted for larger portions of new cars. Eventually, most of what made up the duty-free cars that the U.S. imported from Mexico had originated overseas, often in East Asia. By Trump’s first Inauguration, nine of the eleven newest North American auto plants had been built in Mexico, and the U.S. auto industry had lost around two hundred thousand jobs. Millions of lives were affected, the politics of the Midwest grew more embittered, and none of it was fated. It just hinged on an inattentive lawyer’s pen.
“Strategic decoupling” is the phrase that Lighthizer uses to describe his envisioned changes to trade with China in a second Trump term. The modern system of international trade was formalized during the nineteen-nineties, when the U.S. entered into NAFTA, the World Trade Organization was established, and China was granted most-favored-nation status. (Lighthizer was an alarmist about this arrangement at the time; in 1997, as the Senate considered approving most-favored-nation status for China, Lighthizer wrote in the Times that, were the deal to go through, “every manufacturing job in the United States will be at risk.”) What Lighthizer would like to see, as he explained to me, is “a new trade system,” in which the U.S. walked away from the disadvantageous trade agreements of the nineties and negotiated a new series of agreements with other democracies, wealthy and not, that fixed those mistakes. Other trading partners would probably be unhappy about this, and “you’d have to fight your way through the retaliation,” Lighthizer said, but in the end he thought other countries would renegotiate because they needed our market to sell to.
He was warming to the vision. “We have the momentum politically to do it,” Lighthizer said. “We have the benefit of a trillion-dollar trade deficit, which gives us enormous leverage. We take unilateral action, we disrupt the system, we build over not too long a period toward what I suggest.” It wouldn’t be easy, he acknowledged. “Now, you’ll have a lot of resistance toward it, because, when everyone’s robbing the bank, there’s not a lot of incentive to stop bank robbers, right?” Lighthizer said. “But you can create enough pressure where you can do it. And it would be the most sensible thing, where you go back to the sense of the benefits of trade—you do the things you can do best, I do the things I can do best.”
If the second Trump Administration is to represent a break with the post-Cold War system of liberal trade and the inception of something new, then you would expect Lighthizer to be part of it. He is not. He was uninterested in reprising his old job as U.S. Trade Representative, or the vaguer-sounding position of trade czar. According to Politico, Lighthizer would have been interested in the jobs of Treasury or Commerce Secretary, but those positions had gone to Wall Street insiders: the currency trader Scott Bessent got Treasury, and Commerce went to the major cryptocurrency investor Howard Lutnick. Lighthizer did not sound especially impressed by Trump’s economic team. Offhand, he told me, “I probably know more about tax than anyone going into the Administration.”
In Lighthizer’s memoir, “No Trade Is Free,” from 2023, the account he gives about why he sees international economic competition with such suspicion is that he grew up in Ashtabula, Ohio, an iron-shipping city east of Cleveland along Lake Erie’s southern shore, not far from the Pennsylvania state line. His father, a doctor, was originally from Appalachian Ohio, and his mother, who grew up in Kentucky, had been the first in her family to attend college. Ashtabula’s economy hinged on the transfer of iron ore shipped from Minnesota via the Great Lakes; in the rail yards near Bridge Street you could see “hundreds of hopper cars” being filled with ore en route to factories near Pittsburgh. The products made out of this ore were especially vulnerable to global competition, and Ashtabula’s population peaked in 1970. “I have this in my home town, but it’s a million towns,” he told me. “All of a sudden, people are told, You’re stupid, your boss is bad, all this kind of thing—and it’s all trade policy. We screwed them in Washington, and then we told them it was all their fault.”
By the nineteen-seventies, Lighthizer had left Ashtabula, too, moving from Catholic schools to Georgetown and then to a career as a conservative lawyer, in a party that, in his view, has always had a split personality. “There’s always been two Republican parties,” Lighthizer said. “There’s always been a smart-guy, rich-person, Northeastern-élite kind of party, and then a Taft, Midwestern, commonsense anti-élite party.” The difference between the two was very visible when it came to trade. His villains include both Presidents Bush; his heroes stretch back to William McKinley but include Richard Nixon, who raised tariffs in response to low-cost manufacturing from Asia, and, Lighthizer insists, Ronald Reagan. “Reagan was a freaking economic nationalist,” he said. He put limits on Japanese imports and saved the car industry.”
One reason Lighthizer might have been more open to Trump than most Washington lawyers of his generation is that he saw the casino billionaire as an expression of a permanent tendency in G.O.P. politics—rather than a revolt against it. In the White House, he gave Trump an old brown book he has from the eighteen-eighties called “The Great Debate,” which collected political arguments for and against tariffs. I expressed a little skepticism that Trump’s interest in this history would have extended much beyond humoring Lighthizer. “I would kind of talk him through this,” Lighthizer said. (The White House did not respond to requests for comment.)
But Lighthizer’s faction was on the outs for most of his early career, and especially so during the nineteen-nineties, when the critical trade agreements were conducted. When I asked Lighthizer to describe how he saw the cumulative effects of those agreements, he said, “I almost don’t quite know where to start.” Between 1960 and 1980, he noted, there were fourteen years in which the U.S. economy grew by three per cent or more, and fourteen again between 1980 and 2000; since 2000, there have been five. At the same time, he went on, the process of transferring operations overseas had eroded the American technological advantage, partly owing to overly idealistic trade deals in which our counterparties did more to protect their industries than we did ours: having invented computer chips, for example, we now manufacture just eight per cent of them. “And none of the smallest ones,” Lighthizer said. An Australian study recently found that American technology has declined relative to China in fifty-seven of the sixty-four categories measured.
