Republicans Have Their Own Version of the ‘Just Transition’ — for Trade

D emocrats like to talk about the “just transition” from fossil fuels to renewable energy. In proposing this massive, government-directed reengineering of the American economy, they acknowledge it will be challenging and expensive. They say it’s for the greater good of the environment and will create jobs for Americans that will make the costs shrink into the rearview mirror as we drive our EVs fueled with solar electricity into the bright green future. Who doesn’t like clean air and water?

It would be folly to remake the country’s entire energy mix with top-down government, and Republicans are right to oppose it. But now Republicans have their own “just transition” story, not about the environment but about trade.

The Trump campaign’s “policy attack dog,” vice-presidential nominee J. D. Vance, appeared on Meet the Press on Sunday and laid out the Republican version of the “just transition,” and it is just as unconvincing as the Democrats’.

The transition Vance has in mind is one away from global trade and toward domestic self-sufficiency. The tool he has in mind to cause the transition is tariffs. Host Kristen Welker asked Vance about the costs tariffs impose, citing Kamala Harris’s claims that the tariff proposals would amount to a “Trump tax” on American consumers.

Vance replied that Trump already did tariffs in his first term and overall inflation was low for his entire presidency. “When Kamala Harris says, ‘If we do the thing that Trump already did, it’s gonna be way worse than it was last time,’ I just don’t think that makes a lot of sense,” Vance said.

The problem is that Trump is not promising to do what he did last time. Rather than tariffs only on goods from China, or only on steel and aluminum (which, contrary to Vance’s assertions, harmed American manufacturers), Trump has said he wants at least a 10 percent tariff on all imports, a 60 percent tariff on Chinese goods, and even higher rates for certain other goods. Though these tariffs wouldn’t cause inflation per se, they would cause higher relative prices for many goods that people buy every day and would increase the tax burden.

Welker pointed out that the tariffs Trump already imposed cost Americans $80 billion in higher taxes. The full package of tariffs he is proposing this time could cost over $500 billion. “Do you acknowledge that imposing more tariffs would ultimately cost consumers?” Welker asked.

Vance replied:

What it really does is it penalizes importers from bringing goods outside the country into the country, and I think that’s just a necessary thing. We know that China and a number of other countries are using effectively slave labor to undercut the wages of American workers. Donald Trump thinks that has to stop. And again, what Kamala Harris is saying, Kristen, is that if you do this, you’re somehow going to cause skyrocketing inflation. In reality, Donald Trump already did it. He brought a lot of jobs back, and it didn’t cause inflation.

Vance is completely correct in describing tariffs as a penalty on imports. He says that this is a penalty Americans should be willing to pay because China and other countries have lower-wage economies that undercut American workers. (For actual slave labor, the U.S. has ample non-tariff authority to sanction companies that use it, as it has already done with Chinese firms abusing the Uyghurs.) In the end, Vance says, Americans will come out ahead, and it will create lots of jobs along the way.

When pressed further by Welker, Vance made this even clearer:

I think economists really disagree about the effects of tariffs because there can be a dynamic effect. What some economists would say is what you just said, that it will actually raise costs for consumers. But what other people say, and I think the record supports this other view, is that it causes this dynamic effect where more jobs come into the country. Anything that you lose on the tariff from the perspective of the consumer you gain in higher wages, so you’re ultimately much better off.

Vance is promising to make you a little poorer for your own good. This is the same style of argumentation Democrats use in pushing the “just transition” for energy. Higher energy prices now and higher taxes and borrowing to pay for green-energy subsidies are worth it because we have to save the world, and all of that extra spending will create more jobs for Americans building solar panels and windmills.

Democrats make a similar point about self-sufficiency as well, arguing that producing green energy at home will reduce U.S. reliance on major oil producers with unsavory governments, such as Russia or Saudi Arabia, and insulate the U.S. from global price shocks. Vance told Welker, “If we depend on the Chinese to make too much of our stuff, then prices can skyrocket at a time of crisis,” citing Covid as a recent example.

Focusing on China makes the proposals more politically palatable but evades the fundamental issue. Trump has said he wants tariffs on all imported goods, 84 percent of which don’t come from China. Why Americans should be taxed extra for buying goods from the U.K., Japan, South Korea, Australia, or any of dozens of other friendly countries is not clear.

Fully domestic supply chains are more susceptible to shocks than global ones, since they allow for less competition and fewer alternative sources for goods. The U.S. baby-formula market, for example, has extremely restrictive trade barriers that block nearly all imports. It is one of America’s worst markets, susceptible to breakdown if there’s a bad storm in Michigan and full of government subsidies to try to protect consumers from the high prices that have resulted.

Democrats in pursuing their “just transition” create programs that send money to green-energy firms and environmentalist NGOs that they like. In the same way, the Republican “just transition” on trade redounded to the benefit of American steel companies, for whom Trump trade representative Robert Lighthizer worked as a lobbyist.

The lowest common denominator in each party’s “just transition” is that the rest of the U.S. economy should absorb significant costs in the pursuit of more manufacturing jobs for Americans, whether they’re making solar panels or toasters. Politicians’ arguments for the superiority of manufacturing jobs continue to weaken as the manufacturing wage premium has disappeared in recent years. Currently, the average manufacturing wage is lower than the overall average wage.

Neither Republicans nor Democrats explain how it serves the greater good to use public policy to push more Americans into a sector with below-average wages. It probably has something to do with how manufacturing jobs sound like a good idea to seniors, who remember when there was a manufacturing wage premium, don’t have to work anymore, and have a high propensity to vote.