The Trump administration released a report to Congress on March 1, 2017 outlining details of the president’s “America First” trade policy. The report represents a drastic shift in the U.S. approach to global trade practices and sheds light on how President Trump intends to accomplish many of his campaign promises on trade.
The stated objectives of the president’s trade policy are to expand trade in a way that is “freer and fairer to all Americans.” More specifically, the report outlines plans intended to increase economic growth, promote job creation, prioritize reciprocity with trading partners, strengthen the U.S. manufacturing base, and expand agricultural and services industry exports.
To achieve these objectives, the administration has set forth four top priorities:
- Defending U.S. Sovereignty Over Trade Policy
The Trump administration will review all World Trade Organization (WTO) rules, interpretations and settlement decisions in light of its potential impacts on U.S. industry and interests. Because WTO decisions are not self-executing under U.S. law, the administration may decide to implement U.S. trade protections in a way that runs counter to WTO protocol. This possible rejection of WTO decision making is a major reversal of policy from prior administrations. While it remains to be seen, the move could threaten the long term viability of the WTO and rewrite decades of established global trade practices.
- Strict Enforcement of U.S. Trade Laws
The administration believes that foreign governments have taken actions that distort free trade, such as providing subsidies to domestic producers, misappropriating intellectual property, manipulating currencies and violating labor laws. To counteract these unfair trade practices, the administration plans to strictly enforce U.S. trade remedies, such as leveling antidumping and countervailing duties, limiting import surges, and withdrawing from trade agreements or suspending the application of trade benefits. These measures could force trading partners to the negotiating table but may also lead to increased prices on U.S. imports in the near term.
- Use All Available Leverage to Open Foreign Markets.
The administration plans to use its negotiating power and enforcement tools to overcome tariff and non-tariff trade barriers in other countries that restrict the importation of U.S. goods and services. The targets of these actions would be countries that lack a free market economy and/or transparent legal or regulatory systems. China is likely one of the main focuses of this objective.
- Negotiate New and Better Trade Deals
The administration will negotiate trade deals on a bilateral, rather than multilateral, basis. The president has already withdrawn from the Transpacific Partnership Agreement (TPP), and bilateral negotiations with Japan and other former TPP countries are expected to occur in the near future. The administration has also begun planning a renegotiation of NAFTA with Mexico for later this year. This approach may extract better trade concessions that benefit U.S. exporters, but it may also increase the compliance burden on U.S. companies to navigate a greater number of disparate trade agreements.
President Trump’s trade agenda is not a departure from the promises he made on the campaign trail, but the March 1 report outlines an approach that significantly differs from prior administrations. His “America first” policy may have wide-ranging impacts on both U.S. importers and exporters. Only 50 days into his presidency, President Trump has not taken any concrete steps to implement this agenda, but we expect agency action will be forthcoming soon. Check back here for more information as the situation develops.