Kamala Harris on Tariffs and Trade Agreements

In this post, we will examine two critical elements of current US trade policy and how they could be affected under the Harris Administration.

Despite some changes around the edges, in ways that matter to the US economy and to US consumers there was not a significant difference on this issue between the former Trump Administration and the current Biden Administration.

Tariffs begun under Trump and continued by President Biden have placed tariffs on $350 billion worth of Chinese imports. The Biden Administration has softened the impact of Trump tariffs on allies but strengthened the focus on China, which remains the primary source of industrial and consumer goods imports. These tariffs have added millions of dollars to the increased import costs into the U.S.

For a glimpse into how a Harris Administration could handle this issue, we must look to the criticisms she levied against the tariffs when first introduced by the Trump Administration.

“I would work with our allies in Europe and Asia to confront China on its troubling trade practices, not perpetuate Trump’s failing tariff war that is being paid for by hard-working Americans.”

These words signal hope for, at the very least, a more targeted approach to addressing the US-China trade imbalance and allegations of unfair trade practices by China. At the same time, it must also be noted that the dispute settlement mechanism of the World Trade Organization (WTO), which the U.S. has undermined, was created to handle these types of concerns. Beginning with the Obama Administration, the US has blocked the appointment of judges to the WTO Appellate Body, rendering it incapable since 2019 of performing its core functions.

A handful of countries have devised a temporary workaround while WTO members seek a solution to the impasse. A return to true multilateralism would see a Harris Administration working actively to restore the role of the WTO Dispute Settlement Body in resolving trade disputes, including the US-China trade war.

Trade Agreements

“We need – pro-labor, pro-environment trade deals.” Senator Kamala Harris voted against approving both NAFTA 2.0 – the U.S.-Mexico-Canada Agreement (USMCA) –negotiated by the Trump Administration — and the Trans-Pacific Partnership (TPP) negotiated by the Obama Administration and on which Trump reneged. In both cases, the then-senator explained that the agreements needed stronger provisions to address climate change.

Coming from California which has had to face the increased risk of wildfires, water shortages, and depleted coastlines as a result of global warming it makes sense that climate change is a priority issue for her. She said The USMCA climate provisions were inadequate, and she expressed concerns that the TPP would have undermined California’s environmental provisions.

A growing number of countries have begun incorporating provisions to address climate change into trade agreements. The EU, for example, has introduced the “Green Deal” which includes wide-ranging initiatives to achieve EU climate neutrality by 2050 as well as new standards and requirements with which the EU expects its trade partners to comply. The Biden-Harris Administration has begun to explore with the EU arrangements to reward trade partners that mitigate against climate change and punish those that do not.

As Senator, Kamala Harris did not voice disapproval of the new labor provisions in the USMCA, most notably setting a minimum wage requirement for automotive workers. The Administration has also been espousing a “worker-centered trade agenda” still under development. Kamala Harris has emphasized the need for US trade policy to prioritize the needs of workers over those of big companies. This is a challenging task. One key reason that workers have been so negatively impacted by trade agreements has less to do with the content of these agreements and more to do with the structure of the US economy.

Peter Goodman’s book, How the World Ran Out of Everything highlights the elevation by corporations of profit-maximization over decent wages and working conditions as a structural issue that significantly contributed to the supply chain breakdown experienced during the pandemic.

A Harris Administration would likely continue to define this new focus while having opportunities to incorporate her vision on climate and labor into US trade agreements. The USMCA (NAFTA 2.0) provides for its review every six (6) years. Any party may decide to end the agreement, providing an incentive for new negotiations.A Harris Administration would have the opportunity to address the climate and potentially labor provisions that are lacking in the current deal. A Harris Administration would also be responsible for concluding the negotiation of the Indo-Pacific Economic Framework (IPEF) with fourteen countries and being billed as a new type of arrangement that, among other things, addresses the modern challenges by incorporating strong labor and environment standards and corporate accountability.

Finally, it must be noted that a more strategic approach to tariffs would help the Harris Administration to meet its enunciated goal to improve the lives of ordinary Americans.