TRUMP AND TRADE: One Year (Almost) — How Bad?


    It’s been almost one year since President Trump took office. He came to office riding a tide of anti-trade rhetoric. One of the most protectionist candidates ever to have won election. Clearly trade was a major issue. Which is very rare in presidential politics. So what’s the record? Any conclusions at this point? 

   Here are some international highlights for global trade during this first year of the Trump administration.

  • The U.S. withdraws from the TPP.
  • Both the U.S. and the EU opposes granting of market economy status to China.
  • The U.S. is continuing Obama’s case in the WTO against China involving aluminum and the issue of market economy status.
  • But no new WTO case has been filed.
  • The WTO’s Trade Facilitation Agreement (TFA) has come into effect along with the previously updated Information Technology Agreement (ITA). (Which China has joined.) So the WTO is continuing negotiating new trade rules, somewhat, despite the failure of Doha.
  • The OECD has agreed upon a global tax avoidance treaty that the U.S. has not signed.
  • The WTO in the Boeing case reversed its state subsidies ruling in favor of the U.S.
  • The WTO upholds the U.S. labeling regulations for tuna in a compliance case brought by Mexico.
  • The U.S. has just won a WTO case brought against it by Indonesia concerning U.S. antidumping duties.
  • The Trump administration is still dealing with a WTO case filed by China concerning the anti-dumping methodology not utilizing a market economy status.
  • The U.S. withholds appointments to the Appellate Body of the WTO.
  • The U.S. opens renegotiation of NAFTA.
  • No withdrawal from the WTO or its dispute resolution system.
  • But consistent complaints by the Trump administration about the WTO and its dispute resolution system. Even though it handles increasingly complex regulatory cases (not merely tariff disputes but ‘non-tariff issues) from a broad range of countries. Disputes are fairly promptly decided, decisions are generally complied with, and just a few sanctions were authorized.
  •  No new bilateral trade agreements. Nothing much is happening concerning negotiations with the EU. Even though the EU is moving forward, most recently with Japan.
  • Some additional trade controls concerning Cuba and Iran.

    And here are some U.S. domestic highlights for global trade:

  • The U.S. has not declared China to be a currency manipulator.
  • The U.S. has not imposed a border tax on U.S. exports.
  • The USTR is assessing Section 232 (national security) action against China for its domestic steel policies.
  • The ITC is considering safeguard action under Section 201 against China concerning solar panels and washing machines.
  • The Dept. of Commerce ruled against China concerning aluminum imports using non-market economy methodology in its anti-dumping calculation.
  • Dept. of Commerce on subsidy duty on Canadian Lumber.
  • The USTR is assessing Section 232 action against China for its intellectual property polices in the context of U.S. joint ventures and requirements of technology transfer.
  • The pending U.S. tax legislation provides for greater taxation of U.S. multinationals and a reduced tax rate on repatriated income. Probably resulting primarily in corporate dividends and buy backs.
  • The Congress is considering revising and extending CFIUS to outward transactions.

  What are my conclusions?

  • Not much international action but a bit more domestic action against China.
  • No real significant action against the WTO.
  • In fact, the U.S. continues to win its cases in the dispute resolution system as both complainant and respondent.
  • The U.S. continues to defend and have outstanding cases yet to be decided.
  • The U.S. has been a complainant in 115 cases and a respondent in 130 cases. (The U.S. has been involved in nearly 1/2 of all WTO cases.)
  • The WTO continues to negotiate new trade agreements, somewhat.
  • NAFTA renegotiation is moving along slowly. There is always an international legal right to request to renegotiate international agreements when circumstances evolve.
  • Some actions on trade in the Dept. of Commerce and the International Trade Commission. For example. a Commerce Dept. subsidies ruling against Canada’s Bombardier. But really nothing very much at this point.
  • Reliance on domestic trade remedy legislation, and even somewhat of an increase, is usual U.S. practice going back decades.
  • But the decline in cases brought to the WTO compared to other presidential administrations is significant.
  • Review by USTR has not resulted in any unilateral actions, yet.
  • Congressional action concerning both CFIUS and global taxation seem imminent. Tightening up foreign investment rules and taxation of multinationals seem about right.

 What’s the bottom line?    

  However, noise and tone are quite unsettling. This rhetoric and posturing (over national sovereignty, unilateral measures, bilateral trade deals, sanctions, and trade deficits) are already impacting trade flows and diminishing the standing of the U.S. in the global system. This even as the domestic and global economies are rebounding well.

The impact on the role of the U.S. in the post-war order seems most worrisome. It’s more isolationist and more parochial, reminding one of the 1930’s. Reflecting a view of U.S. national interest differently than presidents have since World War II. It’s moving away from active engagement and toward being more alone and abandoning the American architecture of the post-war world. In a sense his unilateral international efforts could well be labeled that of an international cowboy. Reflecting his tribal and nativist base in the U.S.

     This has ominous implications for America’s national security. But that’s another story.

    Be careful. The year isn’t over, yet.


About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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