News & Politics

Trump Signs Executive Orders on Trade

President Trump signed two executive orders that will help identify who among our major trading partners is dumping their products on U.S. consumers and cheating on trade deals as well as empowering the Department of Homeland Security to more vigorously pursue product counterfeiters and pirates that cost U.S. companies billions of dollars every year.

The orders are the opening salvo in what is expected to be a a forceful effort by the White House to unmask unfair trade practices by major countries like China while cracking down on foreign companies that violate trade treaties.

Yahoo News:

US President Donald Trump on Friday signed two executive orders to ramp up trade enforcement.

In one of them, Trump required the commerce secretary and the US trade representative to prepare a report within 90 days, assessing the practices of US trading partners contributing to the $500 billion trade deficit the US had in 2016 on a country-by-country and product-by-product basis.

Commerce Secretary Wilbur Ross was quoted by Xinhua news agency as saying that the report will form the basis for further actions by the Trump administration to tackle bilateral trade imbalances.

He said that the results of the report could lead the administration to find solutions about how to reduce trade deficits by increasing US exports.

The second order aims to improve collection of anti-dumping and countervailing duties. It said that, as of May 2015, about $2.3 billion in anti-dumping and countervailing duties owed to the US government remained uncollected.

The order also directs the Department of Homeland Security to better combat violations of US trade and customs laws and enable enhanced seizure of counterfeit and pirated goods.

The Trump administration’s approach to tackling bilateral trade imbalances has received widespread criticism from economists.

Gary Hufbauer, a trade expert with the Peterson Institute for International Economics, said that the US runs an overall trade deficit with the rest of the world because the combined net savings of the US households, businesses and government sectors are negative, and the dollar is persistently overvalued in foreign exchange markets.

Get that? It’s your fault the trade deficit is so high because you don’t save any money, you bad, bad Americans.

I don’t know if Trump’s ideas on trade are ruinous or not. Certainly, an executive order to study trade problems can’t hurt. And given the amount of money lost by American corporations every year to countries that encourage or do nothing about pirating and making counterfeit products, an executive order to enforce laws already on the books makes excellent sense.

But why is it always the default position of economists like Mr. Hufbauer that trade enforcement is a one-way street — that any effort by the U.S. to correct obvious imbalances in trade necessarily will lead to a trade war? Not all of our trade imbalance is the result of cheating by other countries. But why should we sit idly by and allow other nations to take advantage of us?

The Obama administration accused the Chinese of several shady trade practices, including dumping computer chips on the U.S. market and manipulating their currency unfairly. Forcing the Chinese to trade fairly does not appear to be a partisan issue. But the Chinese have threatened retaliation if we try to do something about their massive trade deficit with the U.S.

The interdependence of the U.S. economy with our trading partners makes any changes to the system — even those beneficial to the U.S. — a risk that nations will retaliate. No one seriously wants a trade war. But these executive orders put other countries on notice that the Trump administration is serious about attacking unfair trade practices.