Comparing Presidents Reagan and Trump: The Case of International Trade

“I am a tariff man...” President Trump, December 2018

“We should beware of the demagogues who are ready to declare a trade war against our friends—weakening our economy, our national security, and the entire free world—all while cynically waving the American flag.” President Reagan, November 1988

(If you have five extra minutes -- and tissues to wipe away tears of joy, affection, and patriotism -- watch the full Reagan defense of free trade.)

Many people would end the comparison here, but this is a blog for scholars, who look at actions as well as words.  Even for Reagan fans such as me, measurement is especially required when the rhetoric comes from an accomplished actor and politician succeeding at the highest levels – winning two governor elections in the largest U.S. state and two presidential elections – and thus not isolated from political pressures.

Thanks to a book written in 1986 by former Reagan CEA member William Niskanen, it is easy for an economist from the Trump CEA to rigorously compare economic policies and processes between the two presidents.  The comparisons for international trade restrictions are surprising, both in direction and magnitude.  The table below summarizes.  (Although not exhaustive, the list of Reagan restrictions are long enough to be exhausting!)

Words versus Actions

Contrary to many of the President’s speeches, Niskanen in 1986 saw the Reagan Administration as restricting international trade rather than promoting it:

 “…the administration imposed more new restraints on trade than any administration since Hoover.” 

“…the administration was on both sides of [trade issues], articulating a policy of free trade and implementing an extensive set of new import quotas.” 

(Niskanen, pp. 137, 143, emphasis added)

“the share of American imports covered by some sort of trade restriction soared under ‘free-trader’ Reagan, moving from only 8% in 1975 to 21% by 1984.” (Hanke, a friend and colleague of Niskanen)

I emphasize “import quotas” (much the same as export restraints made by foreign countries) because President Reagan was a quota man whereas President Trump is a tariff man.  There is an important difference.  As discussed elsewhere, quotas have different winners and losers than tariffs do.  Quotas are an “America last” policy because, unless the quotas are allocated to domestic businesses or are sold by the U.S. government, foreign businesses are major beneficiaries while the Treasury loses revenue on import duties and other taxes.  Tariffs at least bring revenue to the U.S. Treasury without necessarily creating profits for foreign businesses at U.S.-consumer expense. Milton Friedman compared Reagan’s trade policy with the infamous Smoot-Hawley Tariff Act of 1930,

“[The Reagan Administration had] been making Smoot Hawley look positively benign. Despite the harm it did, Smoot-Hawley had at least one virtue—the tariffs it imposed did yield revenue to the Treasury.”

I agree with Friedman’s qualitative assessment, but note that tariffs shift some revenue from other taxes and may also result in retaliatory tariffs (as beneficiaries of quotas, foreigners have little reason to retaliate against them).  It should also be noted that tariff rules often have quota elements to them, such as quotas on exemptions from tariffs (“tariff quotas”) that create windfall profits for the foreign businesses possessing an exemption.

Protecting Automobile and Motorcycle Producers

Let's begin by agreeing that protectionism is and has been the norm in the U.S. automobile market.  A 25 percent tariff on light trucks and cargo vans (almost half of the current U.S. auto market), dating back to the 1960s and known as “the chicken tax,” remains in place with no changes during that time except that Mexico and Canada became exempt with the 1993 NAFTA agreement.  Why would we have a tariff that obtains essentially no revenue?  Protectionism is the only credible answer.

Presidents Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush, and Obama all maintained the chicken tax.  So far President Trump has too, although there have been occasions when Presidents set out plans (later discarded) to phase out the chicken tax after they left office.  Looking through the ERPs back to Reagan, I see zero mentions of this tariff.  (The 2018 ERP alludes to it on page 247. The 2002 ERP mentioned a Mexican tariff on light trucks, without acknowledging the U.S. tariff.  Multiple ERPs asserted that fuel-economy standards distorted sales toward light trucks, without mentioning that the chicken tax distorts in the other direction.)

In the quota area, President Reagan’s trade negotiators persuaded (forced?) Japan

“to adopt a VER [Voluntary Export Restraint] on automobile exports to the United States, a trade restraint that dramatically increased the price of Japanese (and European) cars to U.S. consumers … the main beneficiaries of higher automobile prices were the Japanese (and European) automakers who captured scarcity rents: Japanese automakers reaped more than $2 billion in 1982 alone, while their European counterparts also raised their prices, to capture $1.5 billion that year” (Irwin 1994, p. 6)

President Trump has threatened auto tariffs, but as of my writing this (August 2019) had not imposed them.  Meanwhile, President Trump’s Department of Transportation (DOT) and Environmental Protection Agency (EPA) have formally proposed to remove regulations that are in many ways the economic equivalent of auto import tariffs: emissions and fuel-economy standards that are most costly to European auto manufacturers.

If the joint DOT-EPA rulemaking were finalized, and tariffs were not permanently imposed, then President Trump would be making international automobile trade freer whereas President Reagan (and also Obama) had made it less free.  Because the apparent contrast between the Trump Administration and previous administrations is so stark, and I know first hand that special interest pressures on Federal policymaking did not wholly disappear in January 2017, only time will tell whether these aspirations become reality.

As part of regional trade agreement negotiations, the Reagan Administration proposed to base tariffs on the regional content (“rules of origin”) of automobile imports (Niskanen p. 141).  This proposal was not adopted as of 1986.  In its negotiation of the United States Mexico Canada Agreement (USMCA), the Trump Administration has proposed to tighten the rules of origin for automobile imports.  This proposal has not yet been approved by Congress.

The Reagan Administration imposed a 45 percent tariff on motorcycle imports from Japan, “which dominate[d] every sector of the American motorcycle market” (a Section 201 action: see p. 140 of Irwin’s 2009 book).  Motorcycle tariffs have been discussed by the Trump Administration, but not implemented as of my writing this.

Protecting Steel and Aluminum Producers

President Reagan protected the steel industry with VERs and quotas (see also pp. 114-6 of the 1986 ERP; or pp. 77, 138 of Irwin’s 2009 book).  The U.S. International Trade Commission (ITC) recommended countervailing duties (CVDs) on steel, but CVDs require Presidential approval, and he chose VERs instead.  This choice was a redistribution of revenue from the U.S. Treasury to foreign steel manufacturers.

In both economic and legal contrast to President Reagan's quotas, President Trump levied tariffs on steel (25 percent) and aluminum (10 percent) imports (although Reuters reported that Department of Agriculture Secretary Perdue has tried to persuade the President to replace those tariffs with quotas; presumably he is reacting to foreign retaliatory tariffs on agriculture that make the tariff-quota contrast less stark than the textbooks make it out to be).  The tariff on South Korean, Brazilian and Argentinian steel, however, was replaced with a quota by agreement with the Trump Administration.

I am not aware of any aluminum tariffs or quotas from the Reagan Administration.

(One person present at the Hoover Institution explains how Governor Reagan spoke there about steel tariffs for national security purposes.  That sounds like Trump Administration policy (Section 232 tariffs) ... I wonder what changed the Reagan Administration to quotas/VERs?  Perhaps the threat of retaliation?)

Asian Adversaries

During the Reagan years, the U.S. had a large bilateral trade deficit with Japan and much trade policy rhetoric related to that.  Today it is China rather than Japan.

The Reagan Administration restricted trade with Japan in the ways noted above (esp. autos and steel), as well as semiconductors, machine tools, computers, televisions, forklifts, and roller bearings.  The largest of these were quotas rather than tariffs: that is, they typically removed revenue from the U.S. Treasury and created profits for Japanese businesses.  As Milton Friedman described the semiconductor restrictions (see also Irwin’s paper on the subject),

“After engineering a cartel between Japanese and U.S. chip makers—again something clearly illegal if done by domestic companies alone—[Reagan officials] profess to be outraged that, like most cartel agreements, it proved to be a leaky sieve—fortunately, I may add. In retaliation, they threatened heavy tariffs against Japanese electronic products, which they have now reluctantly imposed, while broadcasting their intention that the tariffs last only until they have succeeded in bludgeoning Japan into enforcing the cartel agreement on its own firms. If successful, that would lead to the transfer of microchip production to areas other than the U.S. and the Japanese microchip industries. An OPEC in microchips at the demand of the customers! It boggles the imagination.”

The Reagan Administration also levied 100 percent tariffs on imports of Japanese computers, televisions and power tools.

The Trump Administration has levied tariffs on a significant fraction of imports from China, using Section 301 of the Trade Act of 1974.  It added the Chinese company Huawei to the U.S. Department of Commerce’s Entity List, thereby effectively prohibiting U.S. businesses from trading with Huawei.  Huawei’s status has been a matter of ongoing negotiations.

Protecting Producers of Textiles, Apparel, and Sugar

President Reagan vetoed the Textile and Apparel Trade Enforcement Act, which would have tightened textile import quotas (pp. 116-8 of the 1986 ERP).  However, with the support of the Reagan Administration, quotas were tightened twice with the Multifibre Agreement when it was renewed in 1982 and 1986 (see p. 139 of Irwin’s 2009 book or pp. 212-13 of this article).

The Reagan Administration tightened quotas on imported sugar (see also pp. 70-71 of Irwin’s 2009 book), which is one of the most notorious trade restrictions in modern America.

Navarro Farts

The Trump Administration supports a House bill known as the "US Reciprocal Trade Act."  Before it was introduced, Peter Navarro was leading the White House effort in this area, which he called the Fair And Reciprocal Tariff act.  To the amusement of the rest of the White House staff, Mr. Navarro got an "F" in marketing; this was one of several occasions that the President was understandably upset with Mr. Navarro.

It stinks that neither the House bill nor the FART act have any chance of becoming Federal law.

(I am unaware of a Navarro-type character in the Reagan White House, but perhaps there was one.)

Other trade restrictions

President Reagan’s Proclamation 4901 extended the 1979 quotas on imported clothespins.  The Reagan Administration increased tariffs on Canadian lumber.

Using Section 301 of the Trade Act of 1974, President Reagan threatened tariffs in several cases that resulted in no U.S. tariffs and reductions in foreign tariff or nontariff barriers to U.S. exports, as they did for the Japanese tobacco-product market or the South Korean film market (pp. 132-33 of the 1987 ERP and p. 177 of the 1989 ERP).

The Trump Administration levied tariffs on solar panels and washing machines, using Section 201 of the Trade Act of 1974.

The Reagan Administration initiated the Plaza Accord where major countries agreed to coordinated interventions in currency markets.  Yesterday the Trump Administration declared China to be a currency manipulator, which the Wall Street Journal called "mostly symbolic" although financial market reactions were not trivial.  The Trump Administration has also proposed to include currency values in determining the applicability of countervailing duties.

For over 100 years, the U.S. postal service has subsidized shipments originating in foreign (esp. developing) countries, pursuant to the rules of the Universal Postal Union (UPU).  As Alfredo Ortiz explained in this article, "it costs around $20 to mail a small parcel weighing 4.4 pounds from one U.S. state to another, yet mailing the same package from China only costs about $5."  The Reagan Administration was aware of this problem, but no solution was implemented.  The Trump Administration has directed that either the UPU reduce the distortions in its terminal dues structure, or the U.S. will set its own terminal dues (withdrawing from the UPU).

Administration components

Niskanen (p. 138) reports that White House components disagreed as to the desirability of trade restrictions, with the Council of Economic Advisers (CEA), Office of Management and Budget, and Department of Treasury emphasizing the economic benefits of free trade while the Department of Commerce, Office of Science and Technology Policy (OSTP), and Office of the U.S. Trade Representative (USTR) emphasized the (political?) need to protect domestic producers.

The component configuration is similar in the Trump White House, although I cannot be sure about OSTP due to few first hand interactions with them.  Also in some instances USTR opposed proposed trade restrictions.

Robert Lighthizer heads USTR in the Trump Administration.  He was the USTR first deputy during the Reagan Administration.

In both Reagan and Trump White Houses, CEA provided a catalog of trade actions in the annual Economic Report of the President designed to assist researchers outside the Federal government who are gathering facts about Federal trade policy.  Compare, for example, Table 4-3 of the 1988 ERP and Table 10-1 of the 2019 ERP.

Trade policy reprise

To reprise the quotas cited above (all Reagan): autos, steel, sugar, semiconductors, textiles, machine tools, and clothespins.  The Trump Administration did create steel quotas for South Korea, Brazil, and Argentina as substitutes for its Section 232 steel tariffs.

To reprise the tariff increases cited above: steel (Trump), aluminum (Trump), motorcycles (Reagan), Canadian lumber (Reagan), Chinese goods (Trump), various Japanese goods (Reagan), solar panels (Trump), and washing machines (Trump).

To reprise the (economic equivalent of) tariff decreases cited above: autos (Trump), and postal terminal dues (Trump).

It is clear that the Reagan administration restricted trade, and did so more than the Trump Administration has.  The Reagan administration harmed consumers in doing so.

While not making comparisons with the Reagan years, Robert Barro and many others have said that the Trump Administration has been reducing economic growth with its trade policies, and enough to fully offset the pro-growth effects of tax and regulatory reform.  What is the quantitative analysis to show how they conclude that the offset is full?  A first pass at the numbers suggests the opposite, even if the tariff increases were permanent: the corporate tax cut alone generated static taxpayer savings of about $200 billion per year, while taxpayers would be paying about $30 billion per year more for tariffs (again, a static calculation).  Yes, there is uncertainty as to whether the annual tariffs will ultimately prove to be $0 billion, $60 billion, or somewhere in between, but is there any doubt as to whether it would be less than $200 billion? In terms of quantifying the cost of a trade war, perhaps they are thinking about the fairly large stock market swings that coincide with trade news.  But would the stock market drop less if there was a credible threat of eliminating the corporate tax cut and reversing all of the deregulation?

(See also CEA’s assessment of the significant benefits of deregulatory policy, which did not include the DOT-EPA rule).

The way I look at it, the proposed DOT-EPA rule would enhance U.S. international trade and consumer benefits so significantly that it would, if finalized, overwhelm the various tariff actions cited above.  In addition, the Reagan experience with Section 301 actions also shows that it is possible for those actions to enhance trade by reducing tariff and nontariff barriers that foreign countries have erected against U.S. imports.  Therefore, while it is clear that trade restrictions from the Trump Administration are significantly less than President Reagan's, more time is needed to determine the overall sign of the Trump Administration’s trade restrictions.

Comparing Presidents Reagan and Trump: The Case of Regulation

Thanks to a book written in 1986 by former Reagan CEA member William Niskanen, it is easy for an economist from the Trump CEA to rigorously compare economic policies and processes between the two presidents.  On these pages I will compare regulation, trade, tax, spending/deficit, and “draining the swamp.”  I will also look at policy processes and personalities.

The results surprised me and will likely surprise readers too.  The amount of deregulation in health, banking, environment, and employment is far greater during the Trump years than the Reagan years.  Telecommunications were deregulated by both presidents, but probably more so during the Trump years.  Natural gas may be a deregulatory area where President Reagan exceeded.  It terms of aggregate net benefits as a share of national income, it seems clear that changes in the natural gas industry were not enough to outweigh the deregulatory changes in health, employment, etc occurring during the Trump years.

Contrary to today’s conventional wisdom (more on this below), Niskanen in 1986 did not see Ronald Reagan as a major deregulator in practice:

“The failure to achieve a substantial reduction in or reform of federal regulations, building on the considerable momentum established during the Carter administration, was the major missed opportunity of the initial Reagan program.” (Niskanen, p. 115) 

“…all too often the administration ruled against a change in regulation that would benefit consumers at the expense of some concentrated business group.” (Niskanen, p. 137)

Telecommunications and Transportation

Specifically, Niskanen (pp. 119-20) cites a mixed record by the Reagan Federal Communications Commission (FCC) in terms of promoting competition in telecommunications.  In contrast, President Trump’s FCC removed anticompetitive vertical price controls from the wired and wireless internet service industries with its “Restoring Internet Freedom” rule.  President Trump and the 115^th Congress also sharply reduced internet service prices by nullifying an Obama-era FCC regulation on the types of internet service products that could be sold to consumers.  CEA estimated that these two actions alone have net benefits of more than $50 billion per year (about 0.3 percent of national income).

By historical standards, 0.3 percent of national income is a lot for the net benefit of deregulatory actions for just one industry.  There are some historical industry deregulations that may be about that magnitude, such as the deregulation of airlines, trucking, railroads, or petroleum circa 1980.  These changes are sometimes associated with President Reagan, but as Niskanen accurately notes most of this deregulation occurred due to laws passed by Congress and signed by President Carter.

(Reagan's EO 12887 did, with some fanfare as his first EO, accelerate by 8 months the petroleum price regulations that would have automatically expired pursuant to the 1975 Energy and Conservation Act.  See also p. 102 of the 1983 ERP or p. 166 of the 1986 ERP.  Reagan's FAA also created a market in landing slots at the four largest airports; see 50 FR 52180 or pp. 178-9 of the 1986 ERP or pp. 218-20 of the 1988 ERP). Although little noticed at the time, the Bus Regulatory Reform Act of 1982 should also be credited to the Reagan Administration).

Natural gas

Before the 1980s, the natural gas industry was heavily regulated both at the wellhead and along the pipelines.  The 1978 Natural Gas Policy Act “provided for the phased deregulation of most gas discovered after 1977 but maintained price controls on ‘old’ gas.” (p. 121)  That is, partial deregulation at the wellhead occurred during the Reagan years, but only as the result of a law signed by President Carter.  President Reagan’s Federal Energy Regulatory Commission (FERC) did meaningfully add to this deregulation. Niskanen wished that deregulatory legislation had also been passed during the Reagan years, and it eventually was during the first year of the Bush Administration (the Natural Gas Wellhead Decontrol Act of 1989).  Led by Reagan- and Bush-appointed commissioners, FERC removed most remaining vertical price controls in 1992.  All of these actions together created net benefits estimated to be about 0.2 percent of national income.

Health

President Trump and the 115^th Congress deregulated health insurance, especially by eliminating (technically, “setting to zero the penalty established by”) the individual mandate and removing Obama-era restrictions on: the sales of short-term plans, the pooling of plans among small employers, and the use of employer benefit dollars for individual-market plans.  As I wrote earlier, President Obama’s individual mandate was epically inefficient because it penalized people for turning down large amounts of government assistance.  These health insurance deregulations have net benefits estimated to be about $50 billion per year.

An Obama Administration rule prohibited insurers from offering a Medicare plan that failed to be "meaningfully different" from other plans.  This was a not-so-subtle tactic to limit competition among insurers; President Obama's Centers for Medicare and Medicaid Services (CMS) even bragged that the health insurance industry was in favor of this rule.  President Trump's CMS eliminated this requirement.

I am not aware of any significant health-insurance deregulation by President Reagan; none are mentioned by Niskanen.

Under both Presidents Reagan and Trump, the Food and Drug Administration (FDA) removed barriers to entry into prescription-drug markets.  According to Niskanen, the Reagan-era changes related to the entry of new drugs.  He does not provide any statistics (although see p. 218 of the 1989 ERP), but during the Reagan years there was no reduction in the inflation-adjusted price of prescription drugs as measured by the Consumer Price Indexes (this absence of a drop may reflect the “new goods problem” with the CPI).  President Trump’s FDA also eased entry for generic drugs, and a significant drop in prescription-drug prices followed, indicating net benefits of about 0.15 percent of national income.

Additional deregulation at the FDA occurred when the 115th Congress passed, and President Trump signed, the Right to Try Act allowing experimental therapies to be sold to terminally ill patients before the FDA has approved them.  Note that previously the FDA had other pre-approval processes in place that put more liability on manufacturers and involved more FDA and IRB involvement and, interesting, got additional attention from the Reagan Administration.

A recent Executive Order sets to relax price controls in the market for kidney donations.  Even the Washington Post applauded this partial deregulation.

The Obama Administration erected significant barriers to entry of new safer cigarette ("nicotine delivery") products.  The Trump Administration acknowledged the importance of product innovation and relaxed the Obama restrictions somewhat, although the British example suggests that there may be room for more beneficial deregulation.

Perhaps out of character with the overall deregulatory agenda (see also the principles articulated in the Administration's Choice and Competition Report), two significant new and costly regulations were proposed since 2017.  Over the objections of Administration economists, these proposed economic regulations were authored by the Department of Health and Human Services (HHS).  One of these was the "rebate rule" (a complicated system of vertical price controls), which the HHS actuary estimated would, among other things, transfer tens of billions from taxpayers (and most senior citizens) to pharmaceutical manufacturers.  President Trump ultimately told the HHS Secretary to withdraw this rule or receive an embarrassing return letter from the Office of Information and Regulatory Affairs (OIRA).  Another economic regulation from HHS further mandated the content of pharmaceutical advertising but has been struck down by a Federal judge pending a decision by HHS/DOJ to appeal.

Environmental

Neil Gorsuch’s mother led President Reagan’s Environmental Protection Agency (EPA), and Niskanen describes that she was “completely dependent on [a] staff” that she distrusted and that “EPA technocrats won the day.” (pp. 126-7).  He does give the EPA credit for “strengthen[ing] the emissions trading program on existing stationary sources of air pollution.” (p. 127)

President Reagan’s staff attempted to significantly reduce fuel economy standards for cars and light trucks, but only succeeded in reducing them by 1.5 MPG per vehicle (p. 122).

In contrast, President Trump’s Department of Transportation (DOT) and EPA have proposed to reduce fuel economy standards (which now are closely related to limits on Green House Gas emissions) by almost 13 MPG per vehicle below what they would be with Obama-era rules.  When this rule is finalized (press rumors say that the final rule is coming soon), I will provide a simple and obvious demonstration of why reducing the standards has especially large net benefits (including environmental costs).

(The Reagan Administration's DOT did attempt to reverse a Carter-era requirement that automobiles have passive safety restraints, but was reversed by the courts; this regulation was later updated as a requirement for driver-side airbags).

(Although not a deregulation, a worthwhile 1985 environmental rule by President Reagan’s EPA prohibited the sale of gasoline with lead content as high as had prevailed previously.)

Banking

Earlier versions of the Federal Reserve’s “Regulation Q” prohibited banks to pay interest to many of their depositors.  This price control was largely relaxed by a law passed before Reagan was inaugurated, although the Reagan Administration help extend the deregulation to saving banks.  “The [Reagan] Administration was less successful in changing other types of bank regulation.” (Niskanen p. 123)

In contrast, the “2018 Economic Growth, Regulatory Relief, and Consumer Protection Act… removes the restrictions from smaller banks that were misapplied to them as part of prior efforts to alleviate the ‘too big to fail’ banking problem. The CEA posits that this act ‘recognizes the vital importance of small and midsized banks, as well as the high costs and negligible benefits of subjecting them to regulatory requirements better suited for the largest financial institutions. [It] is expected to reduce regulatory burdens and help to expand the credit made available to small businesses….’” (CEA p. 14)

President Trump and the 115^th Congress also nullified Obama-era (and trial-lawyer approved) rules prohibiting arbitration agreements in financial contracts.  His administration stopped the Consumer Financial Protection Bureau’s (CFPB) rule “to largely eliminate the payday lending industry…. The CFPB expected that its rule would reduce activity in the payday loan industry by 91 percent, even while acknowledging that consumers found the loans helpful for paying ‘rent, childcare, food, vacation, school supplies, car payments, power/utility bills, cell phone bills, credit card bills, groceries, medical bills, insurance premiums, student educational costs, daily living costs,’ and other pressing expenses.” (82 FR 54515 as quoted by CEA p. 15).

Page 121 of the 1983 ERP briefly notes deregulatory activity by the Commodity Futures Trading Commission under the Reagan Administration.

Employment

The only Reagan-era employment deregulations mentioned by Niskanen relate to regulations implementing statutory prevailing wage requirements for Federal contractors. (p. 124)

In contrast, the Trump Administration has removed or is removing (sometimes with the assistance of rulings by Federal judges) a number of costly employment regulations from the Obama years.  Perhaps the most costly of these is the Federal rule, ultimately nullified by President Trump and the 115^th Congress, giving states permission to mandate employers to provide state-administered retirement accounts.

Other Obama-era rules imposed large costs on employers and employees for the stated purpose of providing labor unions a small advantage in recruiting members from new industries.  As a university professor, I was particularly bothered by the Obama National Labor Relations Board’s (NLRB) assertion that university graduate students are employees of their university rather than customers, and thereby should have the terms of the university-student relationship set by labor unions.  With President Trump’s appointments to the NLRB, this approach was stopped at the University of Chicago literally days before it was to go into effect.

CEA estimates that employment deregulations by the Trump Administration have net benefits of more than $40 billion per year.

Process changes

President Reagan’s Executive Order 12291 required Federal agencies to use cost-benefit analysis to evaluate major rules.  It also helped the OIRA get more involved with regulatory approval.  The results above suggest that EO 12291 did not cause much deregulation (a fact ignored here), although one could argue that it constrained new regulations during the Reagan Administration and beyond.  There is something to the argument, but it should be noted that President Clinton weakened the Reagan order with his EO 12866 by requiring only that a rule’s benefits “justify” the costs.  In practice this means that benefits are typically described in purely qualitative terms, which (together with other process maneuvers) allowed President Obama and others to implement rules where costs greatly exceed benefits.

President Trump’s Executive Order 13771 established a budget for regulations, including budget constraints for each agency.  A lot of deregulatory activity followed EO 13771 (many cited above), but that connection cannot be entirely causal.  For example, independent agencies are not covered by EO 13771 but nonetheless FCC, CFPB, and others meaningfully deregulated (unless they were solely motivated by the threat of coming under an update of EO 13771?).  Another question is whether EO 13771 will last as long as EO 12866; one perspective is that budgeting aligns so well with common sense and is familiar enough to Congress that Congress will one day take over regulatory budgeting so that future presidents have little choice in the matter.

Other commentators on Reagan vs Trump deregulation

Using different methods from above, Patrick McLaughlin and former OIRA administrator Susan Dudley also concluded that President Trump’s deregulation is extraordinary even when using President Reagan as a benchmark (see also here).  Dudley’s chart, reproduced below, shows how President Trump’s “executive agencies completed 33 final economically-significant regulations, in contrast to 89 during the same period in the Obama administration and 63 in the Reagan administration.”

Final Economically-Significant Regulations - First 18 Months in Office

Without citing specific regulations from the Trump era, the usual suspects dismiss claims that deregulation since 2017 has been quantitatively important compared to what happened during the Reagan years.  The New York Times’ “Fact Check,” for example, cites elimination of unnamed “economic regulations in the transportation, telecommunications and energy industries” during the Reagan Administration without acknowledging what has happened in those industries since 2017, let alone what recently happened in the health insurance and banking industries, or what has happened with employment regulation recently.  Others limit the Reagan-Trump comparison to environmental regulations, without any quantitative discussion of vehicle fuel economy and emissions standards.  Others cite Reagan as the big deregulator because of the novel deregulatory ideas that were discussed, albeit never implemented.

Others acknowledge the differences between President’s Trump and Reagan, and attempt to explain them.  Professor Marissa Golden points out that Reagan had a divided Congress whereas President Trump began his term with Republican majorities in both houses.  Indeed, significant deregulation came about when the 115^th Congress and the Trump Administration used the Congressional Review Act to nullify several Obama-era rules.

To that I add that President Trump happened to follow a prolific regulator (Obama), which made it comparatively easy to find costly regulations for elimination.  In contrast, President Reagan followed Carter who had already charted the elimination of some of the most costly regulations of his time.

[trade, tax, spending/deficit, and “draining the swamp” are coming later.   The Reagan-Trump comparison on trade policy is particularly surprising.]