Return of ‘Missile Man’ to the Rust Belt

Robert Lighthizer, the former U.S. Trade Representative (USTR), is poised to lead trade policy should former President Donald Trump return to power in the November presidential election. Lighthizer hails from Ashtabula, Ohio, situated in the heart of the Rust Belt. Ashtabula, once a thriving hub of the steel industry, has seen its population dwindle from approximately 24,000 in the 1960s to around 17,000 today—a decline of nearly one-third. Despite enjoying a comfortable upbringing as the son of a doctor, he bore witness to the gradual decline of his hometown and the hardships endured by his neighbors and acquaintances.

He firmly contends that free trade is a flawed concept and identifies China as a significant adversary to the U.S. Lighthizer holds a steadfast belief that an influx of inexpensive, mass-produced Chinese goods will detrimentally impact the livelihoods of American workers and potentially endanger American democracy by fostering dependence on the Chinese economy. He consistently argues that the purported benefits of free trade, such as lower prices, streamlined resource allocation, and economies of scale, diverge from reality as depicted in economic literature.

Reports suggest that upon Trump's potential return to power, Lighthizer may advocate for reviving the 1985 'Plaza Agreement.' During that time, the U.S., grappling with trade deficits with Japan and former West Germany, exerted pressure at the Plaza Hotel in Manhattan, New York, to artificially bolster the yen's value and the mark.

Lighthizer, a dynamic 38-year-old civil servant who brought a fresh perspective to the USTR, reportedly expressed dissatisfaction with the Japanese official's initial negotiation plan. In a bold gesture, he folded the document into a paper airplane and aimed it at the official, earning him the nickname 'Missile Man.'

Korea experienced unintended advantages from the Plaza Agreement, as the yen's value rose amidst competition with Japan, rendering Korean exports comparatively more affordable. However, the current landscape is different. Prevailing analysis suggests that if the U.S. were to pursue a 'Second Plaza Agreement,' it would not only impact China amidst ongoing hegemonic conflicts and trade tensions and Japan, where the yen's value is declining but also Korea, now counted among the top 10 economic powerhouses. Korea would face significant pressure to appreciate the won.

In terms of economic dominance, Japan's stature 39 years ago was comparable to China's current position. Lighthizer is renowned for his role in challenging Japan's economic prowess. The potential intensity of pressure on Korea is already worrisome. It's clear that he won't overlook Korea's economic necessity to maintain close ties with China. The prospect of Korea, entrenched in extreme internal conflict and division, confronting Lighthizer in this manner appears daunting.