The American backlash to trade is in large part the story of a broken political promise.<\/p>\n
For decades, policymakers have grasped that public support for trade was fragile. The benefits were obvious \u2014 economic growth, export opportunities for American companies and lower-priced goods for consumers. But workers in factories were certain to lose their jobs when they were pitted against overseas competitors. This was especially true as trade expanded with lower-wage countries like Mexico and China.<\/p>\n
Among labor economists, trade unions, businesses and Democratic and Republican politicians, a consensus took shape that a form of insurance was required to cushion communities threatened by job losses. Otherwise, public anger would build. Faith in trade would be undermined.<\/p>\n
In 1954, when the United States was still exporting far more than it imported, the president of the United Steelworkers union had looked ahead to imagine a time when jobs would be threatened by cheaper goods from abroad.<\/p>\n
He proposed a small tariff \u2014 not as a form of protectionism, but to provide a reliable source of finance for expanded unemployment benefits, job training and cash to help people move to places where jobs were more plentiful.<\/p>\n
Business leaders came to support the idea as a way to prevent labor strife while gaining the benefit of greater skills within the work force.<\/p>\n
In 1962, Congress passed the Trade Expansion Act. \u201cThose injured by trade competition should not be required to bear the full brunt of the impact,\u201d President John F. Kennedy said as he signed it into law. \u201cRather, the burden of economic adjustment should be borne in part by the federal government.\u201d<\/p>\n
The program, known as Trade Adjustment Assistance, was expanded in 1974. By the end of that decade, the federal government was spending $1.6 billion a year to provide training and additional unemployment aid to 500,000 workers, most of them in the auto industry.<\/p>\n
The election of Ronald Reagan as president in 1980 brought suspicion against government assistance for individuals. Spending shrank. American labor unions also turned against the program, describing it as \u201cburial insurance\u201d \u2014 inadequate recompense for the trade deals pitting workers against lower-wage earners overseas.<\/p>\n
When President Bill Clinton signed the North American Free Trade Agreement into law in 1993, slashing the barriers to imports from Mexico, he specifically promised to expand the safety net.<\/p>\n
\u201cWe have to tell American workers who will be dislocated because of this agreement, or because of things that will happen regardless of this agreement, that we are going to have a re-employment program for training in America,\u201d he said.<\/p>\n
But Congress narrowed the scope of the program, restricting aid to those who could prove that their job losses had resulted directly from NAFTA. It also limited cash payments to the level of regular unemployment benefits. By the end of Mr. Clinton\u2019s second term in 2000, the average cash benefits were only $200 a week, about one-third of factory wages.<\/p>\n
The next year, China entered the World Trade Organization, unleashing a surge of low-priced exports on world markets. This so-called China Shock eliminated nearly one million factory jobs in the United States over the subsequent decade, and another million positions in related industries like warehouses and trucking, according to research<\/a> by the economists David Autor, David Dorn and Gordon Hanson.<\/p>\n Congress widened eligibility for Trade Adjustment Assistance, but it failed to deliver the money.<\/p>\n Howard Rosen, a labor economist who served as an adviser to the Joint Economic Committee in Congress in the 1990s, and who helped found the Peterson Institute for International Economics in Washington, was early to diagnose the consequences of leaving so many workers behind.<\/p>\n \u201cExisting government programs designed to cushion the effects of economic dislocation are, for the most part, out of date, ad hoc and inadequate,\u201d Mr. Rosen said in congressional testimony in 2008. \u201cThe lack of a national strategy designed to respond to economic dislocation is contributing to political backlash against further trade liberalization and the introduction of new technologies.\u201d<\/p>\n Mr. Rosen\u2019s warning went unheeded. President Barack Obama included an expansion of Trade Adjustment Assistance as he gained congressional passage of a trade deal with South Korea in 2011. But those benefits expired two years later.<\/p>\n President Joseph R. Biden Jr. sought to fund the program again, but Republican lawmakers opposed it as a waste of money and Mr. Biden\u2019s effort to revive it failed.<\/p>\n President Trump\u2019s election and re-election have resonated in part as a rebuke of international trade. He has drastically increased tariffs, celebrating them as the way to force companies to bring factory production back to the United States.<\/p>\n But increased tariffs have threatened the fortunes of companies that are already making products in the United States. Many rely on imported parts and raw materials. Economists warn that tariffs are choking off investment and hiring.<\/p>\n At the same time, Mr. Trump\u2019s recently passed domestic policy bill diminished support for an American social safety net that is already meager by global standards<\/a>. The legislation centered on some $4 trillion in tax cuts<\/a>, with most of the benefits flowing to wealthier households.<\/p>\n