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Free trade is once again tearing apart the Republican Party

Free trade has become the Republican elephant in the room, thanks to Donald Trump.

The GOP front-runner has helped make trade one of the hot-button issues of the 2016 presidential race. And it’s tearing the Republican Party apart – just like it did in the wake of the U.S. Civil War.

Back then, a third-party run by free trade Republicans put the GOP on a protectionist course that lasted 100 years, as I’ve explored in a recent book on the topic. Could it happen again?

End of an era?

A Trump nomination heralds the end of decades of Republican support for free trade. Tapping into widely held GOP fears surrounding outsourcing and unfair trade practices, amid great controversy, Trump has called for punitive tariffs against three of America’s key trading partners: Mexico, China and Japan.

He has also made his condemnation of free trade agreements like NAFTA and the Trans-Pacific Partnership – a massive 12-country free trade agreement signed in early February but still awaiting ratification from every member state – the centerpiece of his campaign. As Trump recently put it: “free trade’s no good” for the United States.

On Main Street, Trump’s protectionism has found a welcome home market. His message plays on mounting anxieties surrounding free trade that pervades the white working- and middle-class base of the Republican Party. Trump’s protectionism has thus struck a resounding chord with a majority of Republican voters.

A recent Pew poll found that 52 percent of Republicans think free trade agreements are a bad thing. Among out-and-out Trump supporters, this number is even higher – a whopping 67 percent.

Noting this trend, Frank Luntz, the GOP’s longtime “messaging guru,” has instructed Republican lawmakers to “stop calling it free trade and start calling it American trade. American businesses, American services – American, American, American!”

But Trump’s protectionist promise to “Make America Great Again” has beaten the Republican political establishment to the patriotic punch.

On Wall Street, however, Trump’s protectionism is far from popular. His anti-free-trade message is out of sync with the Republican Party establishment, which includes a large portion of the U.S. business community. While some, like House Speaker Paul Ryan, remain cautiously hopeful that a Trump nomination would not derail the GOP’s laissez faire dogmas of free trade and deregulation, others, including some on the Republican National Committee, are now seriously considering running an independent ticket.

It’s become the GOP’s nuclear option.

If Trump wins the nomination, will all hell break loose? Reuters

Liberal Republicans and the Gilded Age

So what would happen if the Republican Party’s minority pro-free-trade wing runs as a third party?

Scrambling for past precedent, pundits have looked to previous party revolts like those of 1896, 1912, 1924, 1948 and 1992.

But the most illustrative historical example has gone neglected: the presidential race of 1872. This long-forgotten political contest at the beginning of the Gilded Age – an era known for political corruption, partisanship and the rise of the giants of American industry – had a far-reaching effect upon American party politics, culminating in an economic transformation of the Republican Party in 1884.

The similarities between then and now are remarkable.

For one thing, like the 2016 presidential campaign, the post-Civil-War U.S. national party system was riven by rabid partisanship and intra-party infighting. For another, like the 2016 presidential campaign, free trade was the dominant issue in national politics. And much like Trump’s conspiratorial views on U.S. trade with China, many Gilded Age Republicans viewed free trade with extreme hostility and suspicion.

‘America for Americans’

Following the end of the Civil War in 1865, the Republican Party base in fact looked very much like that of today on the issue of trade.

Like today, a majority of Republicans, fearing free trade, rallied behind protectionism. Anyone attending Republican stump speeches and parades during the 1870s and 1880s could not have missed the GOP rank and file proudly waving banners with slogans like “America for Americans” and “Protection for the American Workingman.”

These would become the GOP’s economic nationalist mantras for decades to come.

As a result, by the early 1870s, only a dwindling free-trade minority remained within the Republican Party. They were primarily intellectual elites – journalists, editors, academics – from the Northeast and Midwest. Desperate and disillusioned, these abolitionist advocates of economic liberalism now feared that the same party that had only just freed American slaves was now going to shackle American trade.

In 1872, as the GOP turned ever more toward economic nationalism, these pro-free-trade Republicans made a fateful decision. They decided to run an independent presidential candidate to oppose the corruption-laden protectionist Republican incumbent, Ulysses S. Grant.

They called their splinter group the Liberal Republican Party (“liberal” at this time meaning a support for liberal economic policies like free trade) and held their national convention in Cincinnati. They made sure that the independent party’s platform contained a free trade plank, as well as a more conciliatory stance toward the South and a call for civil service reform.

In the short run, the Liberal Republican movement proved to be a spectacular failure. These laissez faire political amateurs were outmaneuvered by New York Tribune editor Horace Greeley, who, despite his strong opposition to free trade, obtained the new party’s nomination along with that of the Democratic Party. The Republican independents thereby lost control of both their convention and their party, which fell to pieces following the reelection of Grant that November.

But in the long run, these same Liberal Republicans would help reshape the economic path of both the Republican and the Democratic Party.

Republican protectionism and party realignment

They remained independent free trade thorns within the Republican Party of protectionism until the fateful presidential election of 1884.

That year, the Liberal Republican outsiders were once again faced with a corruption-laden protectionist GOP candidate, this time in the form of James G. Blaine of Maine. Alternatively, the Democrats put forth the anti-corruption governor of New York, Grover Cleveland. And he seemed open to the Liberal Republicans’ brand of free trade.

Would they remain loyal to the Republican Party? Would they run yet another third-party ticket? Or would they vote Democratic?

This 1884 Puck cartoon illustrates how important free trade was to winning independent Republican support in the year’s presidential race by suggesting that whichever candidate was strong enough to draw the independent Republican bow and shoot the arrow of tariff reform would win the presidency. Public domain

Thoroughly disgusted with Blaine and still stinging from their earlier failed attempt at a third-party run, the Liberal Republican free traders threw their support behind Cleveland amid a neck-and-neck election, helping him win New York and thus the White House. In supporting the Democratic nominee, they also earned themselves the infamous nickname “Mugwumps,” a term that would tar them as Republican Party traitors for years to come.

An 1883 Puck cartoon depicting the Republican Party standing before the Tariff Question Sphinx. The Independent Party Solution approaches in the distance, representing Oedipus, who, in Greek mythology, solves the riddles of the Sphinx. Public domain

As for the GOP itself, with the Mugwump abandonment of the Republican ship, the party was finally able to become the party of protectionism through and through, an economic nationalist position that would prevail until the Reagan Revolution of the 1980s, after which free trade overtook economic nationalism as the Republican elephant’s dominant ideology.

History repeating itself?

Could we be witnessing another party reformation stemming from Trump’s protectionist heterodoxy? The situation is eerily similar.

Since the rise of Tea Party populism, Republican independents have nostalgically begun calling for a return of the Mugwumps. And a recent CNN poll finds that over a third of Republican voters would favor a third-party ticket if Trump gets the nomination.

So too is speculation continuing to grow around whether Trump’s haranguing of American free trade might drive the GOP’s corporate establishment into the Democratic Party, whose leaders and base remain noticeably more open to free trade agreements. Will we soon witness the return of the Mugwumps and a split in the GOP?

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