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By Maureen McCall
Robert Lighthizer, former U.S. Trade Representative under U.S. President Trump’s first administration spoke to attendees last Friday afternoon at the Canada Strong & Free Network(CSFN) event in Ottawa.
Lighthizer, author of the book “No Trade is Free” was the architect of Trump’s first term trade agenda, implementing tariffs on China and “strategic” industries like steel and aluminum, and was reported to be a key adviser to Trump’s 2024 campaign.
Reporters were not admitted to his CSFN talk but reports are trickling in from attendees suggesting Lighthizer thinks the Canadian economy will ultimately benefit from the rebirth of U.S. manufacturing which the tariffs are intended to promote.
To get an idea of some of Lighthizer’s reasoning, I took a look at his 2023 book “No Trade is Free”. As much as some Canadians bristled at his opinions last week, I found a great deal of valid insights behind Lighthizer’s accounts and proposals to solve some of the greatest challenges of failed globalization strategies.
Lighthizer negotiated and litigated against the failures of poorly executed “free trade” as part of the Reagan and Trump administrations. In his view, decades of chasing cheap imports and appeasing the concerns of foreign governments created issues of stagnation and economic dependence that Lighthizer calls out as unbalanced free trade. A look into the chapters of “No Trade is Free” yields some surprising insights.
In the chapter titled “How the WTO Has Failed America,” Lighthizer explains that a successful rules-based international trading system both existed and functioned well – almost five decades before the establishment of the WTO. The key to success seemed to be that countries retained some flexibility to impose what he calls “trade-restrictive measures” and he states that “most disputes were resolved in the end through political negotiations.”
In a graph of the U.S. trade balance, sourced from the U.S. Bureau of Economic Analysis listing total goods and services from 1960 to 2020, he showed how the U.S. goods trade balance “falls off a cliff right after the U.S. entry into the WTO” in 1995. While not suggesting the WTO was the primary or sole cause of that trend, he concludes that the WTO did major damage to U.S. interests by being a major restraint on American power. Lighthizer identifies one of the bigger complaints as that over time, the WTO came to see themselves as a group that should “write the rules of trade” instead of staying within their dispute settlement mandate to rule on individual dispute resolution cases, In addition, the WTO assumed the role of an enabler of China, according to Lighthizer.
“The biggest problem with the WTO may be its inability to deal with the unfair economic practices of our biggest geopolitical adversary. The biggest problem facing the United States and most of the Western democracies is the challenge of China. It uses mercantilism practices, largely closed markets, massive subsidies, state-owned enterprises (SOEs), industrial espionage, investment controls, and the like to create huge surpluses… Many of the most destructive Chinese practices are not covered by the WTO rules.”
In a chapter titled “Our Greatest Geopolitical Threat” Lighthizer lists China’s threats as – a growing military threat, international coercion, high-value export industry in the precursors for fentanyl and Chinese leader Xi Jinping’s 2022 declaration of a “new world order” alliance with Russia with China subsequently helping Russia evade international financial sanctions when Russia invaded Ukraine. He concludes that the ultimate way the U.S. can confront China will be “in the economic sphere – and that means trade will be central.” In a subsequent chapter on the economic threat posed by China, he details predatory economic practices by China targeting foreign firms and reports that although accurate data is hard to gather, “available evidence suggests that China is potentially responsible for as much as 80 percent of the problem across all categories of intellectual property theft.” He concludes that China’s strategy has paid off and admits that since there were no means to ensure a level playing field, “the decision to let China join the WTO in 2001 was a fundamental error.”
In the following chapters, Lighthizer details the issues and attempted diplomatic solutions related to NAFTA/USMCA/CUSMA as well as the issues managing globalization with Europe, Japan and the rest of the world. Part of his solution to transcend the issues that affect the U.S. economy involves a discussion of the negative effects of a floating U.S. currency, current income tax laws, and the existence of value-added taxes in other countries as very negatively affecting manufacturing in the United States.
“Each one of these factors makes it hard for our companies to compete in foreign markets.” Lighthizer writes. “…but they also burden our producers in our markets. The combination of the three is overwhelming.”
In the chapter entitled “A Prescription for the Future”, Lighthizer suggests five specific changes to U.S. trade policy which I quote briefly below.
- “It is important that we continue to demand fair trade within our own market and to require reciprocity from our trade partners. We also need to take the existing basic tools of trade policy- including anti-dumping laws, countervailing duty laws, Section 301, and other U.S. trade remedy laws – and enforce them vigorously.”
- “The United States has the biggest market in the world. If it is being treated unfairly in export markets anywhere in the world, it must demand fairness.”
- “We need a substantial change in our import laws. We must take our domestic social compact and apply it to imports…areas such as labor rights, environmental protections and health and safety concerns.”
- “The United States needs to continue to improve its policy of subsidizing specific crucial industries… in some areas, we cannot compete without subsidizing.”
- “Fifth and critically, the United States needs to achieve balanced trade. We cannot continue to transfer, year after year, hundreds of billions of dollars and even at times $1 trillion of our wealth overseas in the form of trade deficits.”
In that same chapter, Lighthizer proposes that the U.S. could achieve balanced trade by imposing tariffs on imports.
“We could put tariffs on all imports,” Lighthizer writes. “…at a progressively higher rate year after year until we achieve balance. Once we have balance, we could lower tariffs down to the lowest level that maintains that balance.”
You may strongly agree or strongly disagree with Robert Lighthizer’s historical accounts, analysis, conclusions and prescriptions but his influence on the current U.S. President’s policies is irrefutable. Many thanks to the Canada Strong and Free Network for inviting him to speak to Canadians at their CSFN Conference 2025 last week.
I recommend reading “No Trade is Free” for an interesting and enlightening discussion of the events, thoughts and policies informing the approaches of the current U.S. administration. It will be time well spent.
Maureen McCall is an energy professional who writes on issues affecting the energy industry.
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