Trump's Toothless Pipeline Protectionism
By David Henderson
Tom DiChristopher of CNBC called me yesterday to get my take on Donald Trump’s attempt to make builders of the Keystone pipeline use American-made pipe. The result is this excellent report by him, in which he quotes me accurately and also quotes Cato Institute trade scholar Dan Ikenson.
Dan and I both pointed out that Trump had given himself an out. Here’s the relevant section of Tom DiChristopher’s news article:
Henderson and others point out a key phrase in the memorandum: that pipeline builders use U.S. products “to the maximum extent possible and to the extent permitted by law.”
Trade treaties have force of law under the Constitution, and so by including that phrase, there is no contradiction with the law, Henderson said. But it also means the executive action is toothless.
In explaining this to Tom, I asked him how long he had been covering these issues, because I wanted to tell him a story from the Reagan administration. He said that he was born when I was in the Reagan administration.
I told him that Trump’s strategy here reminds me of how Reagan dealt with the pro-life people during his administration. Reagan kept them on board in two ways: (1) by, entirely properly, insisting that taxpayers not be forced to pay for abortions, and (2) by giving pro-life speeches and statements but not pushing very hard to overturn Roe v. Wade. That led to the following paragraph in Tom’s article:
“My guess is he’s making it toothless on purpose so he looks good to his constituents without doing so much harm,” he said.
As Dan Ikenson pointed out in the article, very few people will look at the fine print. Few Trump supporters will look at the fine print. Good.
I might be giving Trump too much credit here. Okay. Then we need to give credit to whoever in his Administration had the sense to insert “to the maximum extent possible and to the extent permitted by law.”
None of this means that I’m optimistic about Trump on trade. I’m particularly concerned abut his dealings with Mexico and how that could lead to a terrible populist left-wing president in Mexico when they hold their elections next year. My worry is informed by a trade economist, Kansas State University’s Peri da Silva, whom I had breakfast with this morning. More on that in a future post.