In the last few weeks there have been several significant developments in U.S. trade relations. The question is what are the implications of these developments for the presidential elections and formulating effective U.S. trade policy?
The four trade developments are the following:
One, China trade is moving to the center of U.S. presidential politics. Two, the U.S. Dept. of Commerce is considering new antidumping and countervailing duties on the import of Chinese solar panels. Three, Chinese industries requested parallel investigations of U.S. imports into China of raw material used in the production of solar panels and the Chinese Ministry of Foreign Trade (MOFTEC) opened an investigation. Four, the Bureau of Economic Analysis (BEA) recently concluded that over a recent 10-year period U.S.-based multinationals cut 2.8 million workers in the U.S. and hired 2.4 million new workers overseas, with 1.5 million in India and China.
What does this mean? Two points are obvious.
One, the role of trade, in particular China trade, and that of multinationals are becoming central to the already bitter political debates in the U.S. Trade is rarely central to any presidential election. This time it’s different. This reflects changes in globalization, the rise of new trade powers, and structural stress within the U.S. economy.
Two, the possibility of managing Chinese trade relations and dealing constructively with U.S. multinational corporations are not going to happen anytime soon. Constructive actions concerning China trade relations and U.S. multinationals will have to wait until after the 2012 presidential election. Hopefully, not too much damage will be done until then.