Post-Election Thoughts

This column is coming out a few days early so I can comment on the results of the November 3 election. I’ve learned over the years that my first thought about something is not usually my best, so I may have something better to say at a later point. But in the meantime, I do want to provide a few thoughts on the election results and what they might mean for trade policy.

First, personalities. Overall, this was a Democratic tsunami—the party picked up more seats in the House and Senate than almost anybody expected—but leadership in the trade area remained largely intact. With the exception of Senator John Cornyn (R-TX), leaders of the House Ways and Means and Senate Finance Committees and their trade subcommittees are returning. The biggest changes will occur on the Republican side. In the Senate, only one Democrat, Tina Smith (D-MN), is leaving the Finance Committee, while six Republicans are departing. The Democrats will gain additional seats now that they will be in the majority, so we should expect two or three new members on that side of the aisle. The Republicans will be reduced in number but will still be able to add members because so many are leaving.

One wildcard will be Sherrod Brown (D-OH), who is returning to the Senate after his defeat two years ago. Since his victory was in a special election, he can be sworn in once the results are certified and take his seat in the current Congress. Brown was a member of the Finance Committee in his previous incarnation, and an early challenge for the Democratic Caucus will be whether to restore his seniority and committee positions. The latter is easier than the former, since there will be committee positions available in the next Congress. Restoring his seniority is more complicated because it will mean demoting others. This matters because he has long been an active participant in trade debates and will doubtless play a role in shaping any new Democratic trade priorities.

In the House, there are so many races not yet called, it is hard to say what the impact will be beyond the leadership. Ways and Means is one of several committees where the majority party has historically maintained a margin larger than it has in the full House (26–19 currently), which will mean many new Democratic members and a significant reduction on the Republican side. Seats on the committee are much sought after due to the breadth of its jurisdiction, and trade wonks should watch to see if anyone with strong trade views joins. The size of the incoming Democratic majority also means its leadership may not have the problem that plagued the Republicans: a small group that was able to paralyze the body by holding legislation hostage. The incoming speaker will have the luxury of being able to lose 10–20 votes and still prevail.

Second, policy. Trump did what he always does: He made the election about him. That did not work in the way he expected, as it motivated his opponents to turn out in greater numbers in order to vote against people who supported him. He has, so far, said he will accept the results and work with the Democrats, and everyone will be watching to see how long that lasts. In the trade area, his strong views, particularly on tariffs, are long-held and impervious to criticism, so it is not likely to be the first place where he will seek compromise. The fate of his tariffs is more likely to play out in the courts than in Congress, with litigation over the legality of his Section 122, 301, and 338 tariffs all making their way to the Supreme Court, which will mean decisions on at least the first two next year. If he continues to lose in court, I am confident he already has a Plan C and Plan D ready to reimpose tariffs under different laws and thus start the litigation cycle over again. If anything changes, it will most likely be a more serious attempt to follow the rules of each statute and avoid the process fouls that have characterized so much of what he has done.

With a hefty majority in both houses and high expectations from the electorate to do something about affordability and corruption, Democrats will be motivated to act in both areas. For trade policy, that will mean, first, investigations into whether tariff exemptions were the result of corrupt quid pro quos, and second, efforts to restore tariff authority to the Congress. One somewhat surprising feature of the election, at least to me, was the extent to which tariffs became part of the affordability debate and were, correctly, given a share of the blame for higher prices. While Democrats will have trouble agreeing on an overall trade policy, they can agree that at least some of Trump’s tariffs should be removed, and the first ones to go should be those on Canada. In addition, they will advance efforts already underway to repeal some provisions, such as Sections 122 and 338, and reform others, such as Sections 232 and 301.

These are not likely to get a presidential signature unless they are tucked into a larger “must-sign” bill, and even there they might provoke a veto. Congress might also try not appropriating funds the government needs to collect the tariffs, but that would be difficult to enforce. Other proposals will no doubt emerge, and to the extent they simply unravel actions Trump has taken, Democrats should be able to coalesce behind them. The more difficult task of developing a comprehensive trade policy—an explanation of what they are for rather than what they are against—will play out over the next two years as the presidential campaign gets underway.

William A. Reinsch is a senior adviser (non-resident) and Scholl Chair emeritus with the Economics Program and Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C. He can be reached at [email protected].