Does Trump Have a Trade Policy?
President Donald Trump at one time vowed to label China a currency manipulator but never did. He suggested that he would withdraw the United States from NAFTA, but has since pulled back from that position. He has also said he prefers bilateral deals to multilateral trade relationships.
Given these turnabouts, and the general atmosphere in today’s White House of ad hoc pronouncements and frequent changing of positions, can it be said that Trump actually has a trade policy?
The New York Times, in a recent article, took a brave stab at trying to define what that policy might be.
“A hallmark of Mr. Trump’s negotiating style is to make big threats to try to force action,” the article noted.
That could explain Trump’s railing and ranting against NAFTA. It might also explain the very public placing of additional export duties on Canadian softwood lumber—a dispute that has been simmering for years—as well as Trump’s nasty comments about Canada’s dairy policies. He understood that tearing up NAFTA would have produced pushback from agriculture, auto producers, and others in the business community. But his tough words could spur on a renegotiation of the North American agreement, Trump’s true aim.
Perhaps more significant is Trump’s use of a national security rationale to investigation imports of steel and aluminum.
“Invoking national security concerns can be a potential get-out-of-jail-free card at the World Trade Organization,” the Times article noted. “Trade treaties don’t overrule countries’ national security interests. So if it formally invokes national security concerns…the Trump administration might be able to administer tariffs or other penalties against China that might otherwise be illegal under WTO rules.”
Invoking national security is a way to potentially evade international and multilateral commitments on a large scale. If Trump really wants to blow up the global trade regime, that might just be the way to do it.
Soybean Prices are a Proxy for How the Trade War is Going