Trump ups pressure on global trade ‘cheaters’

“From now on those who break the rules will face the consequences, and there will be very severe consequences,” Trump said announcing two executive orders in the Oval Office.


The first, largely symbolic order, tasked officials to pinpoint “cheaters” – either countries or firms – who are responsible for America’s nearly $50 billion a month trade deficit.

Much of that deficit data is already publicly available and well known, but Trump’s initiative doubles down on his tough trade rhetoric and is being seen as a protectionist warning shot a week before the US leader meets Chinese President Xi Jinping.

Throughout his presidential campaign, Trump vowed to put America’s trading relationship with the world on a more advantageous basis and put “America first”.

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“Thousands of factories have been stolen from our country, but these voiceless Americans now have a voice in the White House,” Trump said.

“The well-being of America and the American worker is my North Star,” he said, adding that without the issue of trade he may not be president today.

Commerce Secretary Wilbur Ross said the order would result in analysts going “country by country, and product by product,” reporting back to Trump within 90 days.

Officials will look for evidence of “cheating,” inappropriate behavior, trade deals that have not lived up to their promise, lax enforcement, currency misalignment and troublesome World Trade Organisation constraints.

“Needless to say the number one source of the deficit is China,” Ross said, before listing more than a dozen other “countries that will potentially be involved”.

The others were: Canada, France, Germany, India, Indonesia, Ireland, Italy, Japan, Malaysia, Mexico, South Korea, Switzerland, Taiwan, Thailand and Vietnam.

However, Ross said the presence of a deficit does not necessarily mean that retaliatory or remedial action would be taken.

“It’s a little bit hard to say that someone is an evildoer if they are providing a product we can’t,” he said. 

Trade reset

In a second executive order Trump asked the government to better recover trade duties on products that are subsidized by foreign governments or dumped on the US market.

The order, Trump said, would “ensure that we fully collect all duties imposed on important importers that cheat. They are cheaters.”

The proposals being considered by US customs officials could impose more substantial bonding requirements at the border or examine products’ risk more stringently.

Listing various problem areas, Trump advisor Peter Navarro said: “This is a big deal. It’s steel, chemicals, agricultural products, machinery – it’s the whole gambit.”

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WTO head Roberto Azevedo said there was a need for clarity on US trade policy, to see how public declarations translate into policy.

“It is difficult to predict and speculate about what US trade policy will be. It’s a very important country, one which the whole world has its eyes on.”

In a sign of brewing unease, Germany on Friday protested over planned US punitive anti-dumping duties on steel plate products from companies in that country and half a dozen others.

German Foreign Minister Sigmar Gabriel charged the step breached global trade rules and unfairly disadvantaged suppliers in Germany, as well as in Austria, Belgium, France, Italy, Japan, South Korea and Taiwan.

Italy also voiced alarm, amid fears that products like Vespa scooters could be hit by punitive duties.

“Trump declares war on the Vespa” said a headline in national daily Il Messaggero, reflecting the tone of most of the media coverage on an issue that dominated front pages and topped news bulletins.

Navarro insisted the new measures would fall within rules at the World Trade Organization, where some might see the United States erecting a technical barrier to trade.

“There is no issue here,” he said. “We’ve been collecting these duties – we just haven’t been doing it very well. The WTO is silent on the issue of incompetence.”

The US Chamber of Commerce gave the orders a qualified welcome.

“The Chamber supports strong enforcement of trade rules and agreements, as long as such enforcement is based on facts and the proper interpretation of those facts and not politics,” said CEO Thomas Donohue.

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