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“The administration has drafted new rules that would limit shipments to China of the machinery and software used to make chips from a number of countries if they are made with American parts or technology, as well as some types of semiconductors …. A spokeswoman for the Commerce Department said that it was continually updating export controls to protect U.S. national security …. The revised policy would make it harder for U.S. companies to sidestep restrictions by shipping to China from subsidiaries in countries including Israel, Malaysia and Singapore.” “Tech Controls on Chinese.” New York Times (August 12,2024).
“In American politics, labeling something a matter of “national security” automatically elevates its importance …. Of course, not everyone agrees on which issues fall into the national security bucket. And the American definition of national security has fluctuated wildly over time …. It is true that economic globalization and rapid technological change have increased the number of unconventional threats to the United States …. But if everything is defined as national security, nothing is a national security priority …. With new technologies, new resources become critical and previously vital resources often lose their significance.” “Everything National Security?” Foreign Affairs (Sept. / Oct. 2024).
“The United States now has commitments from all five of the world’s leading-edge semiconductor manufacturers to construct chip plants in the United States with financial assistance from the administration …. Only about 10 percent of the world’s semiconductors are manufactured in the United States, down from about 37 percent in 1990 …. The roughly $30 billion in total public investment has been accompanied by commitments from private companies to invest more than $300 billion in the United States.” “World Chipmakers & New Investment.” New York Times (August 7, 2024)
“A decades-old economic strategy that privileges industrial production over all else, an approach that, over time, has resulted in enormous structural overcapacity. For years, Beijing’s industrial policies have led to overinvestment in production facilities in sectors from raw materials to emerging technologies such as batteries and robots, often saddling Chinese cities and firms with huge debt burdens in the process. Simply put, in many crucial economic sectors, China is producing far more output than it, or foreign markets, can sustainably absorb. As a result, the Chinese economy runs the risk of getting caught in a doom loop of falling prices, insolvency, factory closures, and, ultimately, job losses. Shrinking profits have forced producers to further increase output and more heavily discount their wares in order to generate cash to service their debts.” “China’s Structural Overcapacity.” Foreign Affairs (Sept. / Oct. 2024).
“US rejects Vietnam’s bid for ‘market economy’ status in blow to trade ties Classification would have boosted exports and reduced tariffs on goods from country that is rising supply chain alternative to China The US has classified Vietnam as a ‘non-market economy’ since 2002 …. But as Vietnam has emerged as a critical link in the global manufacturing supply chain for western companies seeking to diversify their operations away from China…. Republican senator Tom Cotton urged commerce secretary Gina Raimondo not to grant Vietnam’s request, citing its “controlled currency, lack of labor rights …. Democrats Elizabeth Warren and Bernie Sanders also opposed the market economy status, citing more than two dozen anti-dumping orders against Vietnam by the US and pending dumping investigations.” “U.S. Denies ‘Market-Economy Status’ to Vietnam.” Financial Times (August 4, 2024).
“It is essential that we invest in American manufacturing to bolster our domestic industrial base and reinvigorate our economy after years of high inflation and economic stagnation. Nippon Steel’s pending acquisition of U.S. Steel is a major step toward this effort, putting domestic steelworkers, their families and American manufacturing first …. Nippon Steel has committed to maintain existing union agreements, share its world-leading technology, and invest $1.4 billion more than what is currently required under union agreements to improve U.S. Steel’s blast furnace operations. …. Far from imperiling our national security, foreign direct investment from our partners and allies amounts to a vote of confidence in the U.S. economy …. This deal puts American workers and their families first, all while empowering domestic manufacturing. Our leaders shouldn’t squander a unique opportunity to strengthen the U.S. steel industry for years to come.” “Nippon Steel.” Wall Street Journal (August 5,2024).
“If artificial intelligence systems transform the global economy, then the data centres that train them are the factories of the future. Governments around the world see AI-capable data centres as a strategic resource …. All advanced AI systems are developed in data centres full of high-end chips …. It should not therefore come as a surprise that more countries want guaranteed access to AI technology via data centres that are built on their own soil …. Chips, clouds and data centres are intrinsically interlinked, so long as high-end, export-controlled chips give cloud computing companies the ability to deploy AI efficiently.” “Global Chip War and Cloud War.” Financial Times (July 30, 2024).
“Donald Trump’s economic panacea is to impose over-the-top tariffs on all imports …. If enacted, it would return our postmodern economy to that of the Gilded Age of the late 19th century, to economic policies favoring the wealthy over the poor and middle class, when tariffs were the main source of government revenue. That tariff-dominant era ended with the 16th Amendment to the U.S. Constitution in 1913, which facilitated the adoption of a graduated federal income tax. The income tax, not tariffs, has been the main source of federal revenue ever since, and for good reason. Tariffs are a tax on imports, the functional equivalent of a sales tax, imposing a proportionately bigger burden on those with modest incomes …. Following the Revolutionary War, the national government did indeed rely almost entirely on tariffs, as pushed by Treasury Secretary Alexander Hamilton to avoid distasteful excise taxes and encourage the new nation’s infant manufacturing sector. The Civil War quickly proved their inadequacy. To meet the resulting fiscal crisis, Abraham Lincoln persuaded Congress to pass the very first income tax in 1862, essentially a tax on only the very top earners …. That was phased out after the war, returning the United States to its reliance on tariffs and the chaos and class resentment they created …. The Democrats’ defeat after the war brought traditional Republicans with their high-tariffs philosophy back into power and they raised tariffs throughout the 1920s. That culminated in the infamous Smoot-Hawley Tariff Act of 1930, which was enacted in the misplaced belief that tariffs could protect American industries and farmers after the 1929 stock market crash. Instead, they fueled a catastrophic global trade war, strangled commerce, unleashed competitive currency devaluations and intensified a worldwide depression that contributed to the rise of Nazism and worldwide war …. The advent of President Franklin Roosevelt, a free-trader and Cordell Hull went on to become an eloquent postwar champion of international trade to save the world from another global crisis …. American politics have a way of flipping the policies of parties. In the modern era, beginning with President Ronald Reagan, it was Republicans who led the way to lower trade barriers as a boon to economic growth…. Trump is the first major Republican of the modern era to enact sweeping higher tariff barriers to protect American industries and farmers …. For his potential second term, Mr. Trump and his running mate, Senator JD Vance of Ohio, would bring the country back to its protectionist past at a time when large segments of the economy depend on trade and foreign investment, not to mention immigration for high-end tech jobs and low-end jobs in services and agriculture …. A case can be made for selective tariffs to protect national security and sensitive supply chains and encourage green technologies. The Biden administration has pushed for these steps while keeping Trump’s tariffs largely in place, incurring many of the same costs. The long historical record demonstrates these are borne not by other countries, as Trump keeps insisting, but by American consumers and industries.” “Trump and Tariffs.” New York Times (July 28, 2024).
“For over a decade, there has been a widespread myth in US politics that global trade causes American job losses. Yet, two decades of data show that the US economy has largely recovered from the initial impact of the China Shock, grown its resilience to foreign competition, and now in fact thrives on foreign imports. The data reveal the complexity of globalization’s impact on workers, the need to address the US’ investment in its human capital, and the myth that trade is toxic to the American economy …. The US economy was already resilient against imports from China and other low-wage countries prior to the sharp shift in US trade policy and public sentiment, stoked by a bipartisan ongoing political narrative, against globalization …. US manufacturing jobs post-2011 is insignificant, implying that policymakers advocating for nationalist policies are basing their trade policy decisions on outdated evidence …. The research suggests that, rather than solely focusing on reviving lost manufacturing jobs, US policymakers should pivot toward leveraging the country’s comparative advantages in tradable services. This shift in focus holds promise for further enhancing the US economy’s robustness and competitiveness in the global marketplace …. Analysis underlines how reactionary protectionism can worsen economic inequalities and undermine US competitiveness by failing – often deliberately, in the ongoing political narrative – to recognize the benefits that global trade actually brings to the American economy. “Is Trade Really Toxic.” Hinrich (July 2024) (discussing 2024 Georgetown Report).
“In Washington, the swell of sanctions has spawned a multibillion-dollar industry. Foreign governments and multinational corporations spend exorbitant sums to influence the system, while white-shoe law firms and K Street lobbying shops have built booming sanctions practices — in part by luring government officials to cash in on their expertise …. The United States is imposing sanctions at a record-setting pace again this year. The United States is imposing sanctions at a record-setting pace again this year, with more than 60 percent of all low-income countries now under some form of financial penalty, according to a Washington Post analysis …. Treasury officials can impose sanctions on any foreign person, firm or government they deem to be a threat to the U.S. economy, foreign policy or national security. There’s no requirement to accuse, much less convict, anyone of a specific crime. But the move makes it a crime to transact with the sanctioned party …. The number of sanctioned entities appeared to be growing too fast for OFAC to keep up.” “U.S. Sanctions Policy.” Washington Post (July 27, 2024).
“Trump says that mixing tariffs with tax cuts will revitalize American businesses and manufacturing, boosting jobs and benefiting working-class Americans. And they see tariffs on foreign products as a lucrative source of revenue …. The U.S. government was largely funded by tariffs when the country was in its infancy. But starting around the time of the Civil War, the government introduced other taxes to generate more revenue for the state. The income tax was introduced in 1913 in part to counteract the soaring income inequality of the Gilded Age …. It [Raising tariffs] would also be likely to trigger a trade war, which could prompt Trump to once again use tariff revenue to compensate farmers and other businesses that suffer losses.” “Trump’s Proposed Tariffs and Tax Cuts.” New York Times (July 19, 2024).
“As the World Trade Organization approaches its 30th birthday on New Year’s Day, 2025, the international trading system is in crisis. The world’s largest economic blocs — the US, the EU, and China — are locked in an escalating tripartite tariff war …. The rather rarefied topic of international trade policy affects things many voters actually care about: jobs, national security, climate change, and so on. Protectionism is increasingly touted as a simple solution to complex social and economic strains …. China’s export-driven growth miracle has lifted hundreds of millions of people out of poverty, that the EU built whole industries on the back of the resulting demand for high-value goods and services, and that the US has become the richest and most technologically innovative nation on Earth as a result.” “Understanding Global Trae Crisis.” Financial Times (July 18, 2024).
“The bipartisan momentum for ditching America’s postwar commitment to trade liberalization has come from the right. Mr. Trump isn’t the first self-proclaimed “Tariff Man” to serve as president—that title belongs to William McKinley …. As recently as 2016, it was unthinkable that any president would propose a 60% tariff on all goods from China and a 10% tariff on all imports from every U.S. trading partner. Trump’s decision to make J.D. Vance his running mate underlines the seriousness of the former president’s effort to reverse U.S. trade policy, which began when he withdrew the U.S. from the Trans-Pacific Partnership in 2017. Mr. Vance represents a Midwestern state where, today’s protectionists insist, manufacturing jobs and factories have evaporated thanks to trade liberalization …. Foreigners don’t bear the costs of U.S. tariffs. A tariff is a tax charged to American importers whenever a product they have purchased from abroad enters the U.S. economy …. Unfortunately for Team Trump, and even more so for blue-collar Americans, tariffs don’t work this way.” “Tariffs and American Workers.” Wall Street Journal (July 18, 2024).
“This year’s Republican platform decries “a blind faith in the siren song of globalism,” and says that “the Republican Party must return to its roots as the Party of Industry, Manufacturing, Infrastructure and Workers” …. Some of the pivot away from free-market ideals reflects a bipartisan shift in priorities …. While the Republican platform includes plans to raise tariffs, there is no mention of exports or encouraging trade … Trump added tariffs on more than $400 billion of imports during his first term, and Biden has largely kept those levies intact …. But Trump is promising a much more aggressive agenda on trade if he is re-elected — an about face from the more free-trade orientation of the Republican Party in previous decades …. The new Republican platform calls for broad, “baseline tariffs” on foreign-made goods, and floats the idea of making tariffs with foreign countries reciprocal. It proposes phasing out imports of essential goods, banning companies that outsource jobs from selling goods to the federal government and stopping China from buying American real estate and investing in U.S. industries ….. It also calls for stripping China of its “most favored nation” status, which allows it to trade on similar terms to other members of the World Trade Organization. As that happens, politicians are increasingly embracing tariffs and subsidies as standard tools for managing the economy.” “Protectionism and Republicans.” New York Times (July 15, 2024).
“The USTR of 2024 sees things very differently. Under the leadership of Katherine Tai and the trade skeptics who advise her, USTR sees trade as something to be avoided, ignored, or fashioned into an adjunct useful only as a means of advancing other policy objectives … Trade must be grounded in fair competition, and workers should not have to compete against artificially low wages or unsafe working conditions. Trade negotiations will be used to boost partners’ climate commitments. Close working relationships with labor, civil, and human rights stakeholders will guide the approach to trade enforcement and level the playing field for American workers …. Nowhere does USTR spell out the importance of a close working relationship with business. The stakeholders listed above are all important contributors to the fabric of American society. But they do not trade. Workers are vitally important to production, trade, and the overall economy. But they engage in these activities in their capacity as employees for businesses …. USTR’s unique approach to trade policy has business leaders wringing their hands in frustration. The criticisms encompass USTR’s abhorrence of “traditional” trade agreements that include improving access to foreign markets for US companies or bringing down trade barriers domestically. In almost four years in office, US trade officials have struck exactly zero trade agreements of this nature …. But others say the sharp turn in policy with a focus on social, environmental, and antitrust issues has been a source of frustration. Much of this seems to flow from a lack of clarity of what precisely the administration’s “worker-centric” trade policy is designed to do.” “What Went Wrong With the USTR.” Heinrich (May28, 2024).
“Former President Donald Trump has promised more tariffs if reelected, 60% against Chinese goods, 10% against products from the rest of the world. These are in addition to the tariffs he imposed during his time in office and presumably on top of some noteworthy tariffs added to by President Joseph R. Biden, Jr., including the 100% tariff on Chinese-made electric vehicles (EVs) …. There is no reason to assume that the US tariff would not be met with additional foreign tariffs. The European Union, Canada, and Mexico retaliated immediately when Trump put on the steel and aluminum tariffs in 2018 …. Unlike the Biden tariffs, the Trump plan is for increased tariffs on all products from all countries. It is not just America First; it is America Alone …. Only trade experts can readily tell that the two, Trump and Biden, are not using tariffs in the same way.” “Trump Tariffs and Trade War.” Heinrich (June 18, 2024).
“Trade has become toxic, not just on the campaign trail, but in the way that it is discussed by both Democrats and Republicans …. But the fact that some Americans were hurt by a failure to adjust to foreign competition has become the central grievance of the critics of modern US trade policy and has perhaps overly dominated the debate …. Meanwhile, Jake Sullivan suggests modern US trade policy should move “beyond traditional trade deals to innovative new international economic partnerships focused on the core challenges of our time.” (Both statements, of course, ignore the regressive nature of the US tariff system and its disproportionately negative impact on working families).” “Reciprocity and Trade.” Heinrich (January 20, 2024).
“The Biden administration outlined its plans to curb new American investment in critical Chinese technology industries …. The proposed Treasury Department rules would prohibit certain U.S. investments in Chinese companies that are developing semiconductors, quantum computers and artificial intelligence systems …. The rules apply to equity investments, debt financing that could be converted to equity, and to joint ventures …. Lawmakers in Congress have also been working on legislation that would make scrutiny of sensitive investments in Chinese technology sectors a fixture of United States law.” “Chinese Tech and New US Rukes.” New York Times (June 22, 2024).
“Unquestioning belief in the free market created a globalism that funneled money to the 1 percent, which has used its wealth to amass political power at the expense of everyone else. It produced free trade agreements that sent too many U.S. factories to China …. She could do for free-market skepticism what Milton Friedman and his allies had done for free-market fundamentalism. “Bidenomics and Trade.” New York Times (June 22, 2024).
“The Biden administration’s new law forcing the sale or ban of TikTok is the unconstitutional result of “political demagoguery” and should be overturned, TikTok attorneys said in a court brief Thursday marking the start of one of the most consequential legal battles in American internet history …. The company included a roughly 100-page draft national security agreement it offered to the government in August 2022 in hopes of resolving its concerns …. TikTok’s proposal had followed years of negotiations with the Committee on Foreign Investment in the United States, a multiagency federal group known as CFIUS that reviews business deals for national security risks …. Because the sale-or-ban law set the appeals court as the “exclusive jurisdiction” for any challenge, the brief offers TikTok one of its only chances to defend itself in court …. TikTok’s proposal was “the most sophisticated and thorough mitigation agreement” … in decades of reviewing similar contracts. ” “Tik Tox Files Suit Against U.S.” Washington Post (June 21, 2024).
“Industrial policy is back as a powerful motivator for government intervention. This is true in many parts of the world …. Today, the most striking new industrial policy is that of the Biden administration …. Joe Biden’s Inflation Reduction Act has multiple goals, from promoting place-based manufacturing to lowering …. So, how should we assess this shift in US policy towards industrial policies, matched, on the Trumpian right, by a desire to return to the high tariffs of the late 19th and early 20th centuries? …. At the very least, powerful policymakers need to approach the decisions they are making in as rational and careful a way as they can.” “Industrial Policy” Financial Times (June 19, 2024).
“The European Union said it would impose additional tariffs of up to 38 percent on electric cars built in China …. The Biden administration announced last month that it would impose new tariffs of 100 percent on Chinese electric vehicles. That measure quadrupled the tariffs that the United States previously charged for foreign cars, in an effort to shield the American auto industry from Chinese competition.” “EU Imposes Higher Tariffs on Chinese Electric Vehicles.” New York Times (June 13, 2024).
“We are moving into a protectionist world, led by the US, as in the early 1930s. Donald Trump is of course, a committed protectionist — a true successor of Senator Smoot and Representative Hawley, who instigated the infamous Smoot-Hawley tariff in 1930 …. The point is simple …. But trade policy, especially protection, will rarely be the best way of achieving the objective … Tariffs are rarely the best policy instrument, one needs to understand what they do. Tariffs are taxes on consumers …. Yes, there are perfectly sound arguments for intervention in markets. But returning to the trade policies of the 1930s is quite mad.” “Tariffs are Bad Policy.” Financial Times ( June 12, 2024).
“Washington putting pressure on EV and battery makers to build a new non-Chinese supply chain for graphite anodes, a crucial component in electric vehicle batteries. The US trade representative announced that 25 per cent tariffs on natural and synthetic graphite anodes from China …. While natural graphite — a form of carbon — is relatively abundant, almost all natural graphite processing and 98 per cent of synthetic graphite production for battery-grade anodes is presently conducted in China.” “U.S. Tariffs and China’s Graphite.” Financial Times (June 10th, 2024).
“Trump floated the idea of an all-tariff federal revenue system, large enough to replace the income tax ,,,, reversing more than 100 years of economic policy that encourages free trade.” “Trump & All-Tariff Revenue Model (No Income Tax).” Wall Street Journal (June 14, 2024).
“The trade and tariff war trade war between China and the US is likely to escalate whether Joe Biden or Donald Trump wins the presidency …. The European Union imposed new tariffs on Chinese electric vehicles, following in American footsteps ,,,, Biden’s 100% tariff essentially shuts the door to Chinese EVs — you don’t see them on US streets. Not so in Europe.” “China is Facing Trade Disputes.” Bloomberg (June 14, 2024).
From the Journal of East Asis and International Law
…. “Over time, the federal government abandoned a policy of managing production to support prices, prompting growers to become more export-oriented while local distribution networks atrophied …. The last half-decade has been more disruptive than most. First came a trade war against China under former President Donald J. Trump, which drew retaliatory tariffs that cut into U.S. exports of farm products like soybeans and pork …. That’s where the American Rescue Plan, the Inflation Reduction Act and the Bipartisan Infrastructure Law come in …. The laws have collectively provided about $60 billion to the Agriculture Department, which has parceled it out across a variety of priorities …. Another bottleneck strangling smaller farmers has been the availability of meat and poultry processors, an industry that has been consolidated under huge companies like Cargill and Tyson Foods. To fix it, the Agriculture Department has reinvigorated enforcement of long-neglected antitrust laws …. {Some are] pushing for the new funding to be continued in the coming Farm Bill. They want billions more to help transfer land from retiring farmers to small operators rather than corporations, and for the Agriculture Department to set up an Office of Small Farms to oversee it all.” “Billions in New Subsidies and Family Farms.” New York Times (June 3, 2024).
Stuart Malawer
U.S. LAW & GLOBAL TRADE RELATIONS. 
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