Trump and Trade
March 28, 2018

On Tuesday eveninig, White House officials announced that the Trump administration had successfully renegotiated the six-year-old South Korea-U.S. trade agreement (KORUS), giving President Trump his first major trade deal since being elected. In return for exemption from Trump's 25 percent tariff on steel imports and 10 percent tariff on aluminum, South Korea agreed to limit its U.S. steel exports to 2.68 million tons a year, or roughly 70 percent of its average exports from 2015 to 2017; allow twice as many U.S.-made cars, 50,000 per manufacturer, into Korea without meeting local safety standards; and extend for 20 years a 25 percent tariff on South Korean pickup trucks exported to the U.S. The Trump administration also said it was wrapping up a nonenforceable side deal to deter currency devaluations by South Korea.

An unidentified senior administration official told reporters that the "historic" agreement in principle "is visionary and innovative, and it underscores a pattern of failure by previous administrations to negotiate fair and reciprocal trade deals." Trump had threatened to rip up KORUS if South Korea did not renegotiate, and the threatened steel tariff provided another carrot and stick for U.S. negotiators. It's not clear Trump's "America First" strong-arm tactics will work with larger trading partners like China, Canada, and Mexico. And not everyone is as impressed as the White House with the deal.

For example, Ford and General Motors sent fewer than 10,000 cars each to South Korea last year, well short of the new 50,000 cap, and no Korean company currently exports pickup trucks to the U.S. "The expanded quota on autos allows in cars we don't want to ship," Phil Levy, a senior economist in President George W. Bush's White House, tells The Washington Post. "The extended tariff on trucks blocks pickups the Koreans are not exporting. And the limitation on Korean steel exports will make life more difficult for all the U.S. manufacturers who use Korean steel. ... In what way does this help?" Peter Weber

November 11, 2017

"Ministers are pleased to announce that they have agreed on the core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP)," said a Friday statement from the 11 nations participating in the trade deal.

The United States was originally the 12th signatory to the TPP in 2016, but President Trump withdrew the U.S. from the agreement, which he once called "a rape of our country," immediately after taking office. On Thursday, Trump complained at the Asia-Pacific Economic Cooperation summit, where the TPP announcement also took place, that "while we lowered market barriers, other countries didn't open their markets to us."

TPP negotiations have continued since U.S. withdrawal, and on Friday Vietnamese Trade Minister Tran Tuan Anh said participants have now "overcome the hardest part." Bonnie Kristian

September 3, 2017

President Trump is mulling an exit from KORUS, the United States–Korea Free Trade Agreement, The New York Times reported Saturday, citing unnamed senior administration officials. The Associated Press reported the same story based on a U.S Chamber of Commerce statement to members opposing cancellation.

KORUS is a bilateral Obama-era trade deal that Trump believes is unfair to the United States, and the president said in Houston Saturday that KORUS is "very much on my mind." A White House statement to the Times said "discussions are ongoing" but did not provide any further details; Gary Cohn, Trump's top economic adviser, supports maintaining the agreement.

This comes as the United States reiterates its alliance with Seoul amid North Korea tensions. Pyongyang on Sunday claimed to have successfully tested a hydrogen bomb. Bonnie Kristian

April 10, 2017

President Trump and his advisers are working on a new executive order on trade that could lead to new import duties on foreign-made goods like steel, aluminum, and appliances, a Trump administration official tells Reuters and Axios. The order, if signed, would launch an investigation into any "unfair" dumping of goods in the U.S. by foreign companies, and "the best path forward" might "include everything from no action at all to the levying of supplemental duties," the White House official said. Whatever action is taken, the official insisted, "will be informed by the results of the investigation and not by predetermined conclusions."

There is no timeline for the executive order, which is separate from a March 31 order launching a study on trade abuses and the U.S. trade deficit. Commerce Secretary Wilbur Ross is driving the initiative, already subject to disagreement among Trump advisers, Axios says. New import duties would make targeted consumer products more expensive for Americans and U.S. companies that use steel and aluminum, but it could also help some U.S. manufacturers, which is a goal of Trump's. The White House faction wedded to America First nationalism — Stephen Bannon, Stephen Miller, Peter Navarro, and others — is seen as pushing for the tariffs, while the ascendant Wall Street wing — Gary Cohn, Dina Powell, Jared Kushner — is expected to push back.

In their summit last Thursday and Friday, Trump and Chinese President Xi Jinping agreed to trade talks on boosting U.S. exports and shrinking the U.S. trade deficit with China. Peter Weber

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