Trump to target trade abuses in latest executive orders
Friday President Trump is set to sign a pair of executive orders aimed at cracking down on trade abuses, administration officials said. Commerce Secretary Wilbur Ross said the first order calls for the completion of a large-scale report to identify “every form of trade abuse and every non-reciprocal practice that now contributes to the U.S. trade deficit.”
Officials will have 90 days to produce a country-by-country, product-by-product report that will serve as the basis of future decision-making by the administration on trade-related issues, Ross told reporters at a Thursday night briefing.
“It will demonstrate the administration’s intention not to hip-shoot, not to do anything casual, not to do anything abruptly, but to take a very measured and analytical approach, both to analyzing the problem and therefore to developing the solutions for it,” he said.
Trump talked tough on trade on the campaign trail, vowing to renegotiate a slew of major deals and to label China a currency manipulator on “Day One.”
A leaked memo reported on Thursday signaled the Trump administration will seek slight changes to the North American Free Trade Agreement in upcoming negotiations with Mexico and Canada, despite Trump’s consistent campaign rhetoric slamming NAFTA as the “single worst trade deal ever approved in this country.”
He has continued his tough talk on social media. He tweeted Thursday about his upcoming meeting with Chinese President Xi Jinping.
“The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits and job losses. American companies must be prepared to look at other alternatives.”
The U.S. deficit with China was $347 billion last year.
Peter Navarro, the director of the White House National Trade Council, said the U.S. is leaving billions of dollars on the table as a result of lax enforcement. The order will establish more effective bonding requirements, among other measures.
Navarro insisted the orders had nothing to do with the visit or sending a message to China.
“Nothing we’re saying tonight is about China. Let’s not make this a China story. This is a story about trade abuses, this is a story about an under-collection of duties,” he said, later adding: “We’re not here for tweets.”
Although Trump has long argued that trade deficits imperil U.S. workers, Ross cautioned that they aren’t necessarily all bad. In some cases, for instance, the U.S. simply can’t produce enough of a product to meet domestic demand.
In others, foreign countries may make products substantially cheaper or better than in the U.S. They can also mean that foreign countries and entities are investing in U.S. assets.
Still, Ross argued, the U.S. has the lowest tariff rates of any developed country. The report, he said, will examine whether deficits are being driven by things like cheating, specific trade agreements, lax enforcement and World Trade Organization rules.
Ross said the report would not focus extensively on currency manipulation, which is under the purview of the U.S. Treasury Department, despite Trump’s campaign rhetoric.
The second order will focus on stepping up the collection of anti-dumping and countervailing duties, which are levied against foreign governments that subsidize products so they can be sold below cost.
The U.S. trade deficit totaled $502.3 billion last year, a slight increase from 2015, according to the Commerce Department. The trade gap rose to its highest level since 2012 last year, though the imbalance remains below its 2006 high, shortly before the Great Recession struck.
Trump has portrayed trade deficits as strangling economic growth and devastating factory jobs. Research last year by academic economists, including David Autor of the Massachusetts Institute of Technology, found that China’s emergence hurt some communities and they have yet to fully recover.
But foreign trade has also helped reduce prices for clothing, cars and furniture, among other items. This has created savings for U.S. consumers.
While economists concede the benefits of trade can be uneven, they argue the job losses that Trump blames on trade pacts can largely be attributed to automation. A study released this week by the National Bureau of Economic Research estimates that robots account for up to 670,000 lost factory jobs between 1990 and 2007.
Both exports abroad and imports into the United States fell in 2016, but exports declined by a greater sum in part due to a stronger dollar making American-made goods and services more expensive overseas.