The Trump administration is promising an aggressive effort to pry open foreign markets for U.S. exports, even if that means sidestepping the World Trade Organization.
The president’s trade policy agenda, made public late Wednesday, says the administration will “use all possible leverage” to open global markets to American goods and services, while cracking down on unfair trading practices by other countries.
The document says the U.S. will rely on strict enforcement of American trade laws and won’t be bound by international settlement mechanisms like the WTO.
“In too many instances, Americans have been put an an unfair disadvantage in global markets,” the agenda says. “”It’s time for a more aggressive approach.”
The document reflects Trump’s skepticism of multilateral organizations and his focus on defending what he sees as America’s self-interest.
“It’s been a long time since we had fair trade,” Trump said Tuesday in a speech to a joint session of Congress. “I am not going to let America and its great companies and workers be taken advantage of any longer.”
For more than 20 years, the U.S. has relied on the WTO to settle disputes, a system the U.S. helped build. But the Trump administration says the international body is ill-equipped to deal with competitors like China that it says are neither market-oriented nor transparent.
Trade advocates worry that attitude could unravel a decades-old commitment to international dispute resolution.
“The U.S. has been a major force behind international institutions and a world leader in pushing for trade liberalization,” says senior fellow Carolyn Freund of the pro-trade Peterson Institute for International Economics. “If the U.S. isn’t going to do it, it’s difficult to imagine who is.”
Freund warns that other countries might retaliate by adopting protectionist policies of their own.
“That would hurt our exporters because we’ll see them being targets of various tariffs in other countries around the world,” Freund says. “If we don’t have the WTO to moderate trade disputes, it’s very easy for protection to spiral out of control.”
The agenda notes that the U.S. has lost nearly 5 million manufacturing jobs since China joined the WTO. But academic experts say foreign competition is responsible for only a fraction of those job losses. Imports from China, though, are thought to have displaced nearly a million U.S. jobs.
Trump wants to crack down on what he considers unfair competition with anti-dumping and other tariffs. Dumping is the practice of selling goods for less than they cost to make or for much less than they cost in the country of origin.
Those tariffs and others are authorized by U.S. law. The agenda says the administration won’t be constrained by WTO rulings “that undermine the ability of the United States and other WTO Members to respond effectively to these real-world unfair trade practices.”
Trump was an outspoken critic of U.S. trade deals during the presidential campaign, and that position won considerable support among voters who feel left behind by the global economy.
The administration says its new trade agenda will help “provide all Americans with a better and fairer chance to improve their standard of living.”
Critics say the focus on foreign competition is partly misplaced.
“It’s a lot easier to blame foreigners, to blame trade, than it is to say the structure of work is changing,” Freund says. “When two, four years down the road there isn’t a sudden boom in the type of manufacturing jobs that Trump and his supporters are imagining, I think that’s when the reality hits that the policy may sound appealing but it actually isn’t a solution.”