Trump Readies for Action against China as Xi Visit Approaches
· Compulsory
Deposits to Check Importers of “Dumped” Goods on the Anvil
· Other
Measures under Crafting
Since
taking office, he has ordered the US’ withdrawal from the Trans-Pacific
Partnership (TPP), and his administration is said to be preparing for the
re-negotiation of the North American Free Trade Agreement (NAFTA) while examining
the option of negotiating bilateral trade deals with other countries.
The
first of Trump’s trade-related executive orders signed on 31 March focused on
determining the extent and causes of the American economy’s trade deficit with
its trading partners, including allegedly unfair trading practices, in order to
provide trade policymakers with the relevant data for future work, such as in
negotiating deals.
“For many years, the United States has not obtained the
full scope of benefits anticipated under a number of international trade
agreements or from participating in the World Trade Organization,” the order
says.
After outlining a series of concerns on the subject,
the order then directs the heads of various US government agencies to put
together an “Omnibus Report on Significant Trade Deficits” featuring a list of
trading partners “with which the United States had a significant trade deficit
in goods in 2016.”
It then goes on to list a series of questions to
consider in this review, including the factors behind the deficit, as well as
the impacts on US growth and jobs. The report is due within 90 days.
Those tasked with this report are the US Trade
Representative (USTR) as well as the Commerce Secretary, with those officials
ordered to seek input from the heads of the State, Treasury, Defense,
Agriculture, and Homeland Security departments. Those two lead trade officials
can also request information from other agencies if needed, as well as from
other stakeholders.
Trump’s nominee for USTR, Robert Lighthizer,
is still awaiting Senate confirmation. He had a confirmation hearing in the
Senate Finance Committee last month.
Among the areas of concern include the role of
non-tariff barriers; intellectual property violations; non-market economies;
overcapacity in sectors including steel and aluminium;
ineffective trade deals and poor enforcement; currency policy; capital flows;
and “asymmetrical” WTO provisions and legal “interpretations.”
Another executive order signed by Trump on 31 March
targets the collection of anti-dumping and countervailing duties. While
anti-dumping duties are meant to tackle instances of foreign producers selling
goods at prices cheaper than their “normal value” back home, countervailing
duties are meant to address instances of unfair state aid to foreign producers.
In
response to a question on how to reduce China’s trade surplus, Trump said that
he would convey to Beijing that “we cannot continue to trade if we are going to
have an unfair deal like we have right now. This is an unfair deal.” He also
added that he is not looking to discuss issues regarding tariffs with the
Chinese leader at this stage.
In Financial Times interview, Trump argued that China
“are world champions” in the area of currency manipulation, and suggested that
past US administrations “haven’t had a clue. I do.”
They did note, however, that a key trade issue for the
White House right now is China’s status as a non-market economy.
China has tabled WTO complaints against both the EU and
the US regarding their treatment of the Asian giant as a “non-market economy”
in their anti-dumping probes, given the expiry of certain provisions of
Beijing’s WTO accession protocol. While a panel was established this week to
hear the case involving the EU, China has not yet requested a panel for the US
complaint.