Commerce Secretary Wilbur Ross expressed confidence that the Trump administration can achieve better trade terms through negotiations with trading partners, rather than immediately turning to tariffs or other punitive measures that could generate retaliation or other economic repercussions.
[William Mauldin] June 12th, 2017 [The Wall Street Journal]
President Donald Trump, who repeatedly warned in his 2016 campaign about imposing tariffs or exiting international deals, this year decided not to pull out of the North American Free Trade Agreement and instead announced a renegotiation of the 23-year-old pact, with formal talks with Mexico and Canada starting as soon as August.
Mr. Ross is set to play a key role in the high-stakes Nafta talks and is already working on disputes among key industries in North America. This month he announced a preliminary deal with Mexico on sugar imports that generated some gripes from U.S. sugar producers as well as consumers of sweeteners but didn’t lead to an industry revolt or major backlash in Congress.
Mr. Ross, speaking at the WSJ CFO Network in Washington late Monday, cited the sugar deal as an example of one that was reached without creating acrimony. Such disputes are resolvable if the parties involved “are willing to make reasonable compromises.”
He said he’s bringing that approach to wide-ranging trade and investment talks with China. The Trump administration already announced a mini-deal with Beijing meant to help put the finishing touches on several long-running disputes—including beef exports to China—and get the ball rolling toward more substantial market openings.
But Messrs. Trump and Ross along with other top officials have more negotiating ahead to make progress on their preferred yardstick—reducing the U.S. trade deficits.
Most economists say the trade deficit has more to do with broad economic factors. Still, Mr. Ross sees structural factors at work that can be addressed through high-stakes talks with trading partners.
“It’s not inherent in free trade, in my view, that one country, namely us, has to absorb the entire cumulative trade surplus of the entire world,” Mr. Ross said.
China, for instance, could reduce its $347 billion merchandise trade deficit with the U.S. if it purchased less cattle, soybeans and industrial goods from third countries and substituted more from American producers, he said. U.S. officials on Monday said they achieved technical progress in the beef dispute with China. U.S. exports could resume in 10 days, Mr. Ross said.
Although he touted the Trump administration’s ability to solve trade disputes, Mr. Ross also defended the use of unilateral tariffs to block imports when trading partners are found to have “dumped” goods at below market value, or even when a flood of imports is seen as hurting U.S. national security or economic health.
This month Mr. Ross is expected to submit recommendations on whether steel imports are a national-security risk, opening the way to broad tariffs under the “Section 232” provision of trade law, which enables his department to investigate the national-security implications of imports and gives the president the option of restricting them when the investigation is complete.
“That to me is a legitimate national security issue,” he said.