Bush Protection: The President and Free Trade (1992)

Some critics believe that Trump’s horrendous views on trade are a novelty. Here is a 1992 article I wrote for New Republic on the trade follies that permeated the administration of the late George H.W. Bush.

The New Republic, January 20, 1992

HEADLINE: Bush protection: the president and free trade.

by James Bovard

Inviting Lee Iacocca and a few other protectionist CEOS to accompany President Bush on his two-week Pacific tour struck many as an odd, panicky ploy by a free trade president to bolster his domestic ratings. In fact, it should
come as no surprise. George Bush has been closing off American markets almost since his first week in office. In fact, by ceding to the demands of one domestic lobby after another, he may be the most protectionist president since Herbert Hoover.

More than 40 percent of the United States’s 8,753 official tariff categories are restricted by import quotas. And Bush isn’t doing much to end it. As early as July 1989, the president extended steel import quotas for two and a half years, labeling the quota extension a “Steel Trade Liberalization Program.” These quotas were expanded to include railroad axles and oil pipes, hurting the U.S. oil drilling and railroad industries who need high-quality foreign steel products to compete. High-quality Japanese steel was particularly squeezed, with dire consequences for U.S. industry. A 1991 U.S. International Trade Commission survey of steel buyers found that 60 percent of U.S. machinery producers rated Japanese steel quality as excellent, while only 8 percent rated U.S. steel as excellent.

The U.S. dumping law is the administration’s favorite protectionist tool, and Commerce Department officials have urged American companies to bring antidumping suits. Deputy Assistant Secretary of Commerce Marjorie Chorlins thanked the American Wire Producers Association in early 1991 for their frequent use of the law, declaring: “The partnership which the AWPA and Commerce have enjoyed over the past ten years has been active and rewarding.” Commerce officials also encouraged the Big Three to file against Japanese minivan producers-a suit that could cost consumers billions of dollars.

The Bush administration has also taken some highly protectionist positions in the current GATT round. Though U.S. restrictions on shipping are costing American consumers up to $ 10 billion a year, the administration has refused to negotiate on opening the U.S. coastal trade to foreign shipping. Commerce’s idea of “trade liberalization” is to stop protecting a product once it’s no longer produced in the U.S. In May 1990, Commerce Deputy Assistant Secretary Auggie Tantillo told some Carolina textile producers, We would inject some market liberalizing features into the new GATT textile arrangement such as … dropping categories that no longer warrant protection, i.e., those that are no longer made in this country.”

There’s more where that came from. Take peanuts. A drought in Georgia during the summer of 1990 caused a severe shortfall in the U.S. peanut harvest, a doubling of peanut prices, and layoffs at some food manufacturers. Bush had the authority to relax the U.S. peanut import quota of two peanuts per U.S. citizen a year, but delayed any opening of the borders for nine months-until just before the next U.S. peanut crop was to be harvested. And, pandering to Southern congressmen, Bush imposed enough restrictions on his trade liberalization gesture to ensure that only a miniscule amount of additional peanuts could be imported.

Last May, Rufus Yerxa, a high-ranking USTR official, condemned Japan because the Japanese refused to lift their barriers against dairy imports. Yet the U.S. itself restricts dairy imports to the equivalent of only one teaspoon of foreign ice cream and only one pound of foreign cheese for each American per year. A month later, Bush extended the semiconductor arrangement with Japan, perpetuating trade restrictions on a crucial product for the future of the American economy. In August, Oki and Hitachi announced that the new semiconductor arrangement could force them to raise their prices in the U.S. by up to 15 percent, thus putting the American electronics industry (which relies heavily on imported chips) at a disadvantage to the Japanese electronics industry (which can buy chips at a lower price).

Since last July, the Bush administration has imposed new textile import quotas on Nigeria, Indonesia, Egypt, the Philippines, Burma, Costa Rica, Panama, and Pakistan. A month later, Ron Sorini, a Bush USTR textile official, arm-twisted Hong Kong and Korea into slashing their textile exports to the United States by the equivalent of more than 30 million shirts as a “contribution to Operation Desert Storm.” On December 27, Bush extended import quotas on machine tools from Japan and Taiwan.

Of course, Japan is not free of blame regarding trade. The Japanese have sometimes been as creative with their trade barriers as they have with their manufacturing processes. But Japanese trade barriers are no reason to erect our own, and to subject American and Japanese consumers to a double protectionist whammy from both sides of. the Pacific. If President Bush really wants to persuade the Japanese of the joys of free trade, he should leave Iacocca behind and take a few American consumers with him instead. It might give the Japanese people a few dangerously liberating ideas.

Tagline: JAMES BOVARD is the author of The Fair Trade Fraud (St. Martin’s, 1991).