What emerged from the Xi – Trump summit on the most crucial issue of trade wasn’t very much. Not even a real plan. Just a vague undertaking to review some trade issues. So after all these weeks we now have a committee to conduct a vague review of some sort.
This stands in stark contrast with Trump’s promise to take swift and decisive action — on currency manipulations, tariffs, and a host of other items.
This “plan” also stands in stark contrast to the administration’s threats against the WTO and in particular its dispute resolution system.
For example, Wilbur Ross declared this week that a cause of US trade deficits is the “asymmetrical World Trade Organization rules and interpretations.” I have no idea what he is talking about. Maybe it’s the string of defeats we have had concerning trade remedies. Most of these cases were brought by Canada, the EU and a range of other countries including ,for example, Vietnam and Thailand.
Most recently this week a number of global economic institutions have come to the defense of the WTO and in particular the dispute resolution system — including the World Bank, the IMF, the OECD and the ILO. They forcefully proclaim that the WTO is essential to fostering global trade and avoiding trade wars.
At this point what is the bottom line?
The upside is that the Trump administration, by its failure to take any meaningful trade action, is now coming around to hopefully a more conventional policy. This reflects that the more experienced players in the administration are now beginning to take charge of trade policy.
The next 100 days and counting will tell us a lot more. My guess is not much action will be taken. And that’s good for all of us.