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  March 6th, 2017 | Written by

Trump’s Budget Jeopardizes Trade

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  • Trump’s budget outline beefs up the military while taking a meat axe to the rest of the federal budget.
  • The State and Commerce departments will take major budget hits if Trump has his way.
  • Trump’s budget cuts could jeopardize the muscle behind US trade enforcement mechanisms.

The Trump administration submitted a budget outline to Congress last week, one which beefed up military spending–although not by enough to match the president’s campaign promises, say critics–while taking a meat axe to the rest of the federal budget.

Two of the civilian department budgets to be hardest hit were the State Department–slated for a 37-percent cut–and the Commerce Department, which will be hit with an 18-percent slash, if the administration has its way. Both of these budget cuts, if they come about, could have a negative impact on trade policy, and reality.

The State Department budget includes money for foreign assistance, and a small part of that goes toward implementing the African Growth and Opportunity Act (AGOA), funds that will likely be on the chopping block if the Trump budget goes through. AGOA allows sub-Saharan African countries to export thousands of goods to the US on a duty-free basis. According to the International Trade Administration, the legislation has enjoyed bipartisan support and “offers tangible incentives for African countries to continue their efforts to open their economies and build free markets,” all of which enhances global stability and, potentially, develops markets for US exports.

The United States Department of Commerce is a wide-ranging agency which is central to the regulation international trade polices and the enforcement of regulations. President Trump has said he wants stricter enforcement of US trade laws. It’s the Commerce Department–along with the independent International Trade Commission–that investigates antidumping and countervailing duty investigations and imposes penalties on parties found to be importing into the US unfairly. Trump’s budget cuts could jeopardize the muscle behind US trade enforcement mechanisms.

Commerce also runs an international trade service out of US embassies around the word, collecting information about overseas markets and companies. It’s just about critical to any company exploring new markets, especially if they’re new to the process. The Census Bureau is also part of the Commerce Department. That agency doesn’t just count the US population every ten years but also compiles important trade data collected from export documentation filed with it. The International Trade Administration, also a Commerce component, similarly provides services to US traders in the form of statistics that are invaluable to business decision making. How will the Trump budget impact these agencies and services? It’s not clear, but it certainly won’t help.

The National Oceanic and Atmospheric Administration (NOAA), yet another Commerce agency, is slated for a 17-percent budget slash. No doubt, this is meant to declare war on NOAA’s capabilities to track and documental environmental and climate changes, but it may also hamper the agency’s ability to operate a constellation of satellites that help navy vessels and commercial ships navigate the world’s oceans.

The good news is that Congress must approve the federal government before it comes into force. And the word from Congress, including Republicans, is that many of Trump’s budget-bashing proposals won’t see the light of day.