What can be said of Trump’s trade policies in the first 100 days? Here are some of my thoughts in outline form.
Recent trade actions ……………
- Subsidy duties on Canadian softwood lumber (to counter provincial subsidies)
- Threatening Canadian dairy industry over import restrictions
- § 232(b) national-security investigation of steel (principally from China).
- Withdrawing from TPP.
Recent failure to react ……………
- Not declaring China a currency manipulator.
- Not tearing up NAFTA (wanting some minor renegotiation).
- Backing off the border adjustment tax.
- Concluding only a 100-day study period for US-China trade relations.
- No cases filed in the WTO.
- Possible new domestic trade remedy actions concerning aluminum, semi-conductors and shipbuilding.
- Supporting possible new bilateral negotiations.
- Constant concerns over the WTO’s dispute resolution system and the issue of US sovereignty.
What to make of this? ……………..
- Trump has not given into his extreme campaign rhetoric.
- Trump relies upon older trade remedy laws to address older trade issues (steel, lumber …)
- Neglected addressing the issues of the 21st century, for example cybertheft and digital commerce as well as newer issues of global taxation, global finance and growth of foreign antitrust regulations.
- The disorder and disarray in his White House and administration is being mirrored in his disarray in international economic and trade policy
- Good he has so far averted trade wars.
- But by focusing on older issues he is looking backward.
- Need to move beyond trade remedy laws that go back to the early 1900s as well as focusing on trade deficits in merchandise trade and focus on trade issues of the day
- Reliance on older trade remedy laws is not helpful. They focus on producers and not domestic consumers and real issues of competitiveness and innovation.
General Observations …………………
- Not much has happened. There has been a disconnect in his actions and campaign rhetoric. But there is no coherent trade policy, whatsoever. Focusing on Trump’s failure to appreciate the strengths of the existing international trade and multilateral system is a grave error.
- Focusing on §232(b) national-security investigations is totally unfounded. We can import steel from a host of our friends during any sort of emergency. There’s a world glut.
- He needs to transcend his earlier restrictive protectionist, transactional, and mercantilist views and more fully appreciate the global trends and the need for effective national and multilateral actions under thoughtful American leadership.
- The US needs to once again reassert its traditional leadership in global trade relations. It’s in our national interest.