Denver, CO,
08:05 AM

So Far, Trump's Trade Policy Doesn't Match His Campaign Rhetoric


Ved Nanda is Evans University Professor and director of the Ved Nanda Center for International and Comparative Law. He has taught at the University of Denver's Sturm College of Law since 1965. Nanda is past president of the World Jurist Association, former honorary vice president of the American Society of International Law and a member of the advisory council of the United States Institute of Human Rights.

President Donald Trump’s administration has yet to form a coherent international trade policy.

During the campaign, Trump called the North American Free Trade Agreement (NAFTA) a “disaster” — the worst trade agreement the U.S. had ever signed — and promised to scrap it. Now it looks like he’s going to go forward and renegotiate the existing agreement. Indeed, a leaked draft letter from the administration to Congress indicated that NAFTA will be largely maintained in its current form with minor changes.

During his campaign, Trump also sharply criticized China’s trade practices, calling China a currency manipulator, and said its subsidizing of companies that dump goods in the U.S. has led to the loss of millions of jobs and the decline of U.S. manufacturing. China being the No. 1 source of the U.S. trade deficit, Trump tweeted that this would make for a difficult conversation with President Xi Jinping this past week.

On March 31, Trump signed two executive orders on trade, which he said will end the “theft of American prosperity,” as the administration takes “necessary and lawful action” to end trade abuses. The first order mandates a comprehensive 90-day review of the sources of U.S. trade deficits with its top trading partners. The second is aimed at strengthening and increasing efficiency in enforcement of anti-dumping laws and improved collection of existing tariffs and duties.

Commerce Secretary Wilbur Ross, along with Director of the National Trade Council Peter Navarro, pointed to steel-dumping as having affected the U.S. trade deficit and hurt U.S. steel manufacturers, but stressed that these executive orders were not intended as a warning to China.

On a brief visit to India during the last week of March, I spoke with trade experts who are concerned about the U.S. targeting countries with which it has significant trade deficits, because India is named as one of those countries. They, however, consider their deficit of $24 billion insignificant compared with China’s massive deficit of $347 billion, followed by Japan, Germany and Mexico, all with deficits several times that of India’s.

Trade experts are not certain that the new review will add a whole lot to what is already done by the comprehensive annual reports on trade barriers and intellectual property violations by Office of the U.S. Trade Representative. Similarly, the U.S. International Trade Commission and Department of Commerce already routinely report on trade issues. However, Ross said that this new, more systematic review could assist the United States in taking appropriate measures to counter cheating by companies and other countries. He added it “will demonstrate the administration’s intention not to hip shoot, not to do anything casual, not to do anything abruptly, but to take a very measured and analytical approach.”

On March 1, the Trump administration’s required annual report outlining its trade agenda indicated a preference for U.S. trade law over trade laws set by the World Trade Organization, a global body with 150 member nations, including the United States. It emphasized that it may even disregard the dispute settlement decisions of the WTO. The report added that “it is time for a new trade policy that defends American sovereignty, enforces U.S. trade laws, uses American leverage to open markets abroad and negotiates new trade agreements that are fairer and more effective both for the United States and for the world trading system.”

With the U.S. as a major proponent of creating the WTO’s dispute settlement processes, this would hurt the laudable stability and predictability of the international trading system.

The actions taken so far seem like conventional measures that former President Barack Obama employed, as the U.S. brought 25 trade enforcement actions at the WTO, more than any other country, during his time in office. Donald Trump’s fiery campaign rhetoric on trade is not matched by the trade policy that appears to be shaping up.