Was Trump’s campaign talk just bravado, or are we about to see a trade war?
After a campaign defined in large part by a pledge to turn the nation’s trade agenda on its head, President Trump has opened his presidency with a series of modest, more cautious steps — leaving protectionists and free-trade advocates alike wondering if Trump is ramping up to delivering on his promises or pulling back from them entirely.
A draft letter from the administration to Congress that leaked this week called for maintaining the North American Free Trade Agreement largely as it currently exists — after Trump during the campaign called the agreement the “the worst trade deal maybe ever signed anywhere.”
On Thursday night, Trump’s commerce secretary announced a set of small-bore duties on a few specific types of imported steel plate — and then went on cable television the next morning to proclaim that the United States is in a “trade war” with the world.
The uncertainty was on display in microcosm Friday afternoon when, after speaking at a White House event on a pair of trade-related executive actions, Trump left the room with the official documents waiting for him on the desk beside the podium — unsigned. The White House confirmed the president later signed the papers, ordering studies and reviews that further frustrated advocates of free trade without satisfying protectionists.
The questions about Trump’s trade plans take new urgency this week ahead of his first meeting with President Xi Jinping of China, scheduled for Thursday and Friday at the president’s Mar-a-Lago Club in Florida. The Chinese are eagerly awaiting answers on whether the United States will support granting the country status as a market economy under international law, a status that would protect Chinese products from certain tariffs.
“It is all about trade,” Trump said of his meeting with Xi in an interview with the Financial Times. Trump argued that Chinese producers have an advantage because of tariffs and the value of the renminbi, and that U. S. negotiators could use trade to secure Chinese cooperation on North Korea and other security issues.
“We cannot continue to trade if we are going to have an unfair deal like we have right now,” Trump said. “When you talk about currency manipulation, when you talk about devaluations, they are world champions. And our country hasn’t had a clue.”
Some outside observers believe the contradictory trade signals reflect an internal dispute among Trump’s advisers — between populists who favor more restrictions on trade, such as chief strategist Stephen K. Bannon, and Wall Street veterans such as National Economic Council director Gary Cohn.
Both proponents and skeptics of trade are waiting for the result.
The public is “definitely seeing mixed signals coming out of the administration,” said Thea Lee, an AFL-CIO economist. “They aren’t resolving their issues inside. Some of them are bubbling over.”
Claude Barfield, an expert on trade at the conservative American Enterprise Institute, predicted “continual debate about this internally” among Trump’s staff.
