TRUMP’S MORE AGGRESSIVE ATTACKS ON THE WTO.

Good summary of President Trump’s current attack plan on the WTO by Bloomberg’s Terms of Trade today (February 14th, 2020). The long-standing Trump administration animosity towards the WTO and the existing global trading system is picking up steam and becoming more aggressive. This is alongside of the administration’s newer vengeful attacks in the domestic realm in the post-impeachment saga.

 

President Donald Trump has never been a fan of the World Trade Organization.

For years Trump has called the Geneva-based body the “worst trade deal ever” — largely because he believes the WTO helped China gain a competitive advantage over the U.S. and precipitated the loss of thousands of American jobs.

Trump’s trade chief, Robert Lighthizer, supports this view and has expertly poked at the organization’s weaknesses.

Under Lighthizer’s stewardship the U.S. has:

    • Imposed hundreds of billions of dollars worth of unilateral tariffs against China
    • Exploited the WTO’s national security loophole to levy duties on steel and aluminum
    • Paralyzed the WTO appellate body, which can no longer resolve trade disputes

Collectively, these actions have thrust the WTO into the most acute existential crisis of its 25-year history.

But Trump may not be finished yet.

As Bloomberg reported this month, U.S. officials are now mulling America’s withdrawal from the WTO Government Procurement Agreement — a global trade alliance covering government contract opportunities worth $1.7 trillion.

U.S. withdrawal from the pact would effectively block most foreign, non-defense contractors from bidding on American public tenders. In turn, a wide range of U.S. businesses would lose access to a nearly $900 billion procurement marketplace offered by the GPA’s other 47 members.

Perhaps an even bigger blow would be a plan Trump insiders are said to be mulling to reset American tariff commitments at the WTO by increasing the tariff ceilings — or bound rates — agreed to by previous administrations.

The move stems from the Trump administration’s long-held frustration with the WTO’s principle of most-favored-nation (MFN) nondiscrimination, which requires members to offer the same tariff rates equally to all of the organization’s 164 members. In essence, MFN is the cornerstone of the WTO — and undermining it risks tipping over the entire ant farm.

“President Trump sees it only as a constraint on his ability to strike quick-and-dirty deals,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “But take away MFN, and suddenly the entirety of benefits that the WTO provides begins to unravel, including those that Americans have enjoyed for decades.”

On one hand, these kinds of salvos against faceless bureaucrats in Geneva will be an easy sell at home for Trump’s core voters during an election year.

But defenders of the rules-based global trading system say dismantling it would cause a severe shock to the American economy. They argue that despite its flaws, the WTO provides businesses with the certainty to trade and expand their operations internationally. Ultimately, the results are robust export industries that create good jobs, and for consumers, diverse and low-cost products moving around the world.

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TRUMP’S THREATS AND TRADE POLICY — From His Real Estate Days in New York?

From a forthcoming article of mine …………….

My thesis is straightforward: One can draw a straight line from Donald Trump’s ruthless mode of operating in the contentious world of New York real estate to his operations on the world stage today.

From Queens to the world stage, there is a straight line from using threats and litigation to avoid commercial and contractual obligations to using threats and litigation in conducting U.S. foreign and trade policy. Especially as to policies pertaining to the World Trade Organization (WTO) and U.S.–China trade relations. His weaponization of tariffs and economic sanctions is now being wielded as a principal tool of U.S. foreign policy for the first time since the early 1930s.

Donald Trump’s methods of operating and conducting national security or foreign policy are exactly the same as they would be if he was engaged in real estate transactions and deals. To Donald Trump, trade policy, foreign policy, and national security policy are transactions and zero-sum games. He makes decisions with only a few people around him, including his family members, using threats and litigation to get his way.

President Trump’s ruthless approach has been employed in a  range of multilateral trade relations and bilateral agreements (such as the Trans-Pacific Partnership and  the United States-Mexico-Canada Agreement), and bilateral agreements with Korea and Japan. It has also gone beyond bilateral trade disputes by attacking the legitimacy of the WTO’s judicial system and, indeed, the WTO itself. Beyond trade, this caustic approach has been applied to a range of issues in American foreign policy. For example, the withdrawal by the United States from a broad list of international agreements and institutions, including the Iran nuclear deal, UNESCO, and the Paris Climate Accord.

The Trump administration has been employing tariffs and economic sanctions more vigorously than any other administration as the principal tools of its foreign policy. You might even call Trump’s stance in this regard “foreign policy by tariff threats.”

Trump’s disregard for international laws, institutions, alliances, and agreements is extremely worrisome. He possesses a truly generalized hatred for all rules that is mirrored in many ways, his management of the Trump Organization and his career as a real estate professional.

President Trump’s story has yet to play out on either the national or the international stage. His impeachment is already history. The 2020 presidential election is looming.

 

 

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Iranian Assassination & Global Trade … Not Good for the Global Economy


The assassination of Major General Suleimani of Iran was a terrible blunder on many levels. 

One level that has not been talked about much is its potential impact on global trade.

To me there will be a significant impact, sooner than later. President Trump has already imposed new sanctions on Iran and threatens Iraq (for trying to force out US troops after 16 years). His disregard of U.S. and international law is stunning. His entire personal history of litigation has proven to be his template for governing as president and conducting international relations.

President Trump’s impulse is to destabilize international law and international institutions.

The Persian Gulf states are beyond nervous. So are the Europeans and the Japanese. Transit of oil through the Gulf is an obvious target. The price of Saudi Aramco stock (after its massive IPO) has already taken a hit. Price of gold and government bonds have risen. The price of oil has become even more erratic.

Things are not going to get better for anyone, anytime soon. U.S. threats to target Iranian cultural sites are unnerving and illegal, constituting war crimes if carried out. This newer reality is really, really unfortunate.  The risk of this situation unraveling is very great.

This threat to the global economy is a  foreseeable spinoff of an impulsive military action ordered by the United States president. The president’s decision is a stain on American diplomacy.  Worse than the sellout of the Kurds. I wonder where were the U.S. military and intelligence communities in this process.

You simply cannot rationalize the president’s action and tweets. There is absolutely no strategy here, whatsoever.

Doesn’t anyone in the administration read diplomatic or world history? Or even some basic American  foreign policy? One immediate remedy is for the congress to reclaim its constitutional war powers. Most importantly, foreign policy and national security must now become central to the 2020 election.

Very distressful.

 

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Donald Trump — From Queens to the Global Stage — Always Following his Inner Litigating Self.

 


 

From Jamaica Estates, Queens, to the White House — Donald Trump has consistently perverted the litigation &  judicial system. Domestically and internationally. This will not end well for him nor his enablers. It’s simply unamerican.

From his days as a real estate operator in Queens, New York, owning and managing middle class apartments, to the White House Donald Trump has  more than grossly abused the legal system.

As a private citizen he has been involved in 3,500 to 4,000 cases. Always lying. Losing or dropping most cases. This approach has been extended to Donald Trump’s actions on the international stage. In particular, his disregard for international law rules, institutions, alliances and agreements. He has a truly generalized hatred for rules. (This is mirrored in many ways his management of his Trump Organization, essentially a small management company, that employed his relatives and a few additional individuals.)

Trump’s disregard of international rules can be seen in his attack on a broad range of treaties and institutions. To me, none is more delusional than his attack on the WTO and the dispute resolution system. This system was devised by the U.S. and is the central pillar of the global trading system today — establishing global trade rules and in litigating them. The boy from Queens is now causing havoc in Geneva and other world capitals.

Of course, President Trump’s abuse of U.S. trade legislation in his tariff and trade wars, his disregard of domestic law in a broad range of domestic matters, and in dealing with the Congress is another story. But which is part of his generalized corruption of the legal system and is directly related to his days in Queens as a landlord sued by many including the Department of Justice.

 

“Trump’s Legal Strategy — Review of Plaintiff in Chief — A Portrait of Donald Trump in Lawsuits (2019).

Losing in Courts but Winning, Trump Can Run Out the Clock.New York Times (Nov. 28, 2019).

“Some Have Their Day in Court. The President Seems to Have Eons.New York Times (Nov. 7, 2019).

Malawer, “Trump, Trade and Federal Courts.”  China and WTO Review  (2019).

Malawer, “Trump’s Tariff Wars and National Security — Political and Historical Perspective.”  China and WTO Review (2018).

Malawer, “U.S.-China Litigation in the WTO (2001-2014).International Law Practicum (2014).

 

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National Security §232 and Court of International Trade — More Recent Concerns.

To me, the recent skirmish in the Court of International Trade over a newer case, concerning Turkish steel tariffs, indicates that the court is clearly moving to taking a more aggressive view of the legality of the President’s authority under §232. Perhaps, not declaring that provision unconstitutional, but holding the President’s action to a higher standard than previously.

Last week the United States Court of International Trade (CIT) denied the US government’s motion to dismiss a case challenging President Donald Trump’s move to double the tariff imposed on imports from Turkey.

The court seemingly rejected the government’s argument that all the President has to do is to indicate is “a general need” for national security tariffs. The court clearly stated that an “expansive view ” of §232 is mistaken. It also forcefully concluded that the President needs to conform to the procedural requirements of §232.

(The failure to comply with the statutory time period, to act timely after receiving the Commerce Department’s report,  concerning Trump’s threatened auto tariffs on the EU, may well prove to be fatal in that matter. But that’s another story.)

Here are a two quotes from the Court of International Trade recent opinion:

 
The president’s expansive view of his power under Section 232 [trading regulations] is mistaken… Section 232 requires that the president not merely address a threat to national security; [he] must do all that, in his judgment, will eliminate it.” 

“Although the statute grants the president great discretion in deciding what action to take, it [restricts] the president’s power both substantively, by requiring the action to eliminate threats to national security caused by imports, and procedurally, by setting the time in which to act.” 

The US government requested that the CIT dismiss the case, arguing that the president proclaimed the increase in tariffs lawful and “a general need.” But the CIT denied the government’s motion and the case will continue to move forward at the court.

 

Slip Opinion, Transpacific Steel (CIT) (Nov. 15, 2019).

“New Section 232 National Security Case in Court of International Trade — Turkish Tariff Increase.” American Metal Market (Nov. 19, 2019).

Malawer, “Trump, Trade and Federal Courts.” China and WTO Review (Sept. 2019).

Malawer, “Section 232 Litigation in the U.S. Court of International Trade and President Trump’s Trade Policies. “  CHINA & WTO REVIEW  (Feb. 2019).

                                       

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Bizarre Int’l Investment Proposals from Trump — They Only Hurt the U.S. (Not China).

 

Trump is exploring delisting Chinese firms on US exchanges, restricting US firms investments in China, and Chinese investments in the US. These proposed restrictions on US-China bilateral investments are really destructive. It goes beyond really dumb tariffs. nytimes.com/2019/09/27/us/

Trump’s knowledge of int’l relations, global business & law (both domestic and int’l) gets more questionable every, single day. It’s beyond bizarre. It’s bad for business & the global system. Needless to say also for our economic development & our national security. Did I say bad?

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Trump’s Trade Policies and the Federal Courts — Will the Courts Rein Him In?

My new article on President Trump’s trade policies, delegation of authority and the federal courts. Please click this link ,,,,,,,,,,,,,,,,,,,,, Malawer, “Trump, Trade and Federal Courts.” China and WTO Review (Sept. 2019).

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