Robert Lighthizer, Trump’s shadow ‘commercial’ brain who sees Europe worse than China: “It can generate a lot of instability”

Lighthizer was the architect of some of the former president’s most important decisions and his imprint still endures. He maintains a low profile, but is loyal to Trump. It may be the architect of what some call a tariff armageddon.

Ángel Saz Carranza, director of the Center for Global Economy and Geopolitics ESADEgeo, tells ABC that Lighthizer has been crucial in defining the trade policies of Trump, first, and of the United States, in general. Coming out of Ronald Reagan’s cabinet, “this man has proven to be very skillful when it comes to attack, dismantle and paralyze free trade and its multilateral governance», he says. And he has done it hiding behind security to pave the way. Now his name is heard again in the event that Trump is re-elected and the warning to sailors is that he intends to get an even bigger change in global trade.

After all, we are talking about the man who was the United States Trade Representative between 2017 and 2021, and during that time “former President Donald Trump” – led by Lighthizer as his ambassador – “rewrote the consensus on trade policyto such an extent that President Biden largely copied it,” says ‘The Wall Street Journal’. How did he do it? prioritizing national manufacturing, removing weight from trade agreements, leaving aside the World Trade Organization (WTO) and accepting tariffs.

Europe too ambiguous and weak

That is why specialists urge that Europe learn about this man’s ideas because it could be seriously threatened by his proposals. Since his vision opposes the Europe of multilateralism and everything that limits American sovereignty. And lastly, Renaud Lassus, executive director of the Inter-American Development Bank, advises that Europeans look for allies in the US to protect transatlantic agreements and contain measures protectionists and nationalists advocated by Lighthizer. Only if Trump does not win a majority in both chambers will he have a Congress that limits his ability. At that juncture Europe would have an opportunity.

But Lighthizer does not intend to moderate his demands on the European Union in exchange for its support. “He believes we are too geopolitically ambiguous and too politically weak due to the dependence of some of our members on the Chinese market. For him, the United States has nothing to expect from Europe on these issues,” says Lassus.

And although Biden rescinded the trade sanctions that Lighthizer wanted to apply against European companies in areas such as steel or the aerospace sector, that does not mean that we should be confident, because Biden continued Lighthizer’s policiesaccording to Saz, for two reasons: «One pragmatic and one, let’s say, fundamental. The pragmatic is that if you don’t do it you may lose the elections. The other reason is that there is a profound paradigm shift in the US that is already reaching Europe.

Saz recommends that Europe start work much more with Republicans than it does now. «To understand that game better and so that they understand us a little better. Because the world of multilateralism, in which we as Europeans were very skilled, is running out. That’s why, “Europe has to prepare for a trade shock.”

Three deadly sins to eradicate

Lighthizer firmly believes that the US has allowed its partners to take advantage of it: “He let the rest of the world make our trade policy”he states. And he points out that the ‘three deadly sins’ that have weakened his nation were the creation of the World Trade Organization in 1995, which admitted China in 2001, and the trade agreement with Mexico and Canada in 1994, which Trump, at the behest of Lighthizer would renegotiate, achieving a huge victory for American manufacturers, especially automobile manufacturers.

Three errors that Lighthizer managed to ‘straighten’ by dynamiting what had been done. Saz explains that two very intelligent movements stand out from Lighhizer that left the WTO out of the game. He used sophisticated logic, linking aluminum and steel tariffs to the concept of security. He said that the United States needs steel and aluminum for its military industry.

A movement that put the WTO on the ropes, because it has a clause that determines that Any country may make a unilateral decisionl, contrary to WTO rules to safeguard its national security. «A kind of gentleman’s rule, which was used relatively well, without being abused, until that moment. If the WTO did nothing, it opened the door for everyone to abuse that clause and if it took a position it could be an affront to the sovereignty of the member countries,” describes Saz.

And the other movement, Saz details, was to take a policy that Barack Obama had started to its final consequences. The WTO has an appeals committee that determines whether a country, when accused by another, is violating the spirit of free trade and imposing discriminatory tariffs on third countries. Almost all countries used to take their situation to the appeals committee, but Obama blocked the renewal of these judges. and trump there was no longer an appeals committee.

«Lighthizer killed the most powerful and valuable tool of the WTO and disrupted international trade with these two maneuvers», he indicates. And in the process, as Danny Bahar, an expert in Global Economy at the Brookings Institution, explains to ABC, he used China as a scapegoat.

A formidable opponent

It was Lighthizer who was responsible for the shift towards China and, according to ‘Le Grand Continent’, he is now preparing a plan to separate the two economies in the most important sectors. For him, the Asian giant is «the biggest threat that the American nation has faced since the American Revolution. He points out that he is a very adversary more capable than the former Soviet Union, Nazi Germany or imperial Japan.

Lighthizer recalls that the US had led the way in semiconductors or photovoltaic panels, which it now imports massively. While, China’s GDP has multiplied by 15 and is no longer supported by cheap goods, but is building its own electric car or battery industries.

In his book ‘No trade is free’ he points out that free trade never worked. “All the great economies were built thanks to a wall of protection and often with government money. Thus China was favored by policies with large government subsidies.

In that sense, ‘The Washington Post’ published that Trump was considering a flat 60% tariff on imports of Chinese products. Asked about it in an interview on Fox News, he replied: “No, maybe it will be more than that.” And ‘The New York Times’ reported exclusively that Trump would prohibit Americans from investing in China and would introduce a total import veto of electronic articles, steel and pharmaceutical products. And that, the publication states, would have far-reaching consequences for employment, prices and the global trade system.

What’s more, ‘The Wall Street Journal’ admits that mainstream thinking has moved in Lighthizer’s direction. Even economists recognize that the reduction of the US manufacturing base with offshoring has had collateral costs such as dependence on third countries for products vital to its economic and military security.

Of best friends

And if the United States imposes tariffs on everyone, including Europe, it could have consequences for some, seeing that the United States’ commitment to their security has diminished, some countries could end up moving closer to China. But Lighthizer doubts others will retaliate and describes security alliances as “very good for the United States and for the world.” And he even maintains that “a group of like-minded countries could be organized that would form a better trading system” than the current one.

Lighthizer affirms that friends are not made by trading with countries: “People Choose your friends based on who they think can help protect them and who will win». And he states that “what makes true allies is having the best economy, the best army and the best technology in the world.” And that depends on economic capacity. Lighthizer says the US must have the ability to manufacture its own military and high-tech equipment. Whoever cannot do it will be vulnerable to supply interruptions in times of conflict.

hybrid animal

Another issue is the climate issue. Europe would disagree with Trump on the goals and need to reduce emissions. On the other hand, Lighthizer, at this point, is in favor of a carbon border tax that would impose tariffs on high-emitting products, but only because doing otherwise would benefit countries that use more carbon than the US, namely China.

At the same time he affirms: «It is no longer possible to relocate and forget about the communities. “Trade policy must have the objective of helping workers.” A position that moves away from republican doctrine. Hence Lighthizer is also described as a hybrid political animal close to the Democratic Party on some issues.

Saz explains to ABC that the Democratic industrial-union wing has many positions similar to Lighthizer. Because they have been affected by competition from low manufacturing costs from China. «That is why partly politically There is nothing Harris can do to change Lighthizer’s legacy.. Because it is known and it has been demonstrated that there have been communities dilapidated in part due to commercial flows and how companies have been moving and reorganizing their productive activities.

radical realism

For Saz, what Lighthizer practiced during Trump’s mandate is an enlightened selfishness. “You create institutions or rules that also limit you in some way, but you create them and they open up many markets for you with numerous allies,” says Saz. However, you will also have to deal with security representatives from your own party.

Ultimately it remains to be seen how much leeway they leave for Trump’s cabinet to really tighten the screws on the rest of the world. But in any case, Saz establishes that if Trump leaves “what he is going to do is blackmail and a lot. Because that is its realism, its transactionality. It may be saying to Europe, you stay with me in exchange for more security. And that radical realism of Trump and Lighthizer “It can generate a lot of instability in this global era.”