Donald Trump's Broken Trade Promises
The U.S. Commerce Department announced this week that the 2017 trade deficit rose to the highest level since 2008, a biggest and best figure that no U.S. president would brag about, least of all Donald Trump, who pledged repeatedly and forcefully that he would slash the deficit – and fast.
It would be so easy, candidate Trump told workers in Monessen, Pa., on a June 28, 2016, campaign stop. Repeatedly, he promised those workers he’d get it done quickly. So quickly! “I know you have been through some very, very tough times,” he said, “but we’re going to make it better and we’re going to make it better fast, OK? Just watch.”
Steel, aluminum, and factory workers across America are still watching and waiting as their mills close and their unemployment benefits expire, even though Trump promised them quick action.
The Commerce Department reported the trade deficit rose 12 percent during Trump’s first year in office, that the goods deficit with China jumped 8 percent to a record $375.2 billion, that the overall non-petroleum goods deficit shot up to an unprecedented high of $740.7 billion. Those terrible numbers testify to an administration dawdling, not performing for American workers who voted for Donald Trump based on campaign promises of quick and easy action to cure bad trade.
This is what candidate Trump told those Monessen workers, whose families suffered over the past 40 years as mills closed, good-paying union jobs disappeared and their towns crumbled for lack of tax revenue: “This is not some natural disaster; it’s a political and politician-made disaster. Very simple. And it can be corrected, and we can correct it fast when we have people with the right thinking.”
The president did hire people with the right thinking. Among them are U.S. Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert E. Lighthizer, and Peter Navarro, director of the National Trade Council and Office of Trade and Manufacturing Policy.
And the president has taken some steps in the right direction. Late last month, he imposed four years of tariffs on imported large residential washing machines and solar panel components. This came after unfair imports bankrupted nearly every solar manufacturer in the United States. And Whirlpool argued that its South Korean washer competitors had moved their production facilities around the world to skirt previous U.S. tariffs.
Last November, the Trump administration launched the first U.S.-initiated anti-subsidy and anti-dumping investigation in decades, this one into imports of Chinese aluminum alloy sheet.
Before that, in April of 2017, Trump opened investigations under Section 232 of the Trade Expansion Act of 1962 into whether unfairly traded imports of aluminum and steel are so diminishing U.S. domestic capacity that national security is threatened. The Commerce Department self-imposed a deadline of July to submit recommendations for action to the White House.
It didn’t happen. July came and went. Meanwhile, imports increased as foreign producers tried to sell as much as possible in the United States before the administration restricted imports or imposed penalties under Section 232. This week’s Commerce Department report suggests steel imports rose nearly 13 percent and aluminum imports jumped nearly 32 percent last year.
Finally, last month, the Commerce Department delivered its recommendations in the Section 232 cases to the president. But the administration kept them secret. And Trump still hasn’t taken action. American steel and aluminum workers continue to lose their jobs. Communities continue to suffer.
That day in Monessen, Trump told the workers, “When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians have proven, folks, have proven they do nothing.”
Aluminum and steel workers are still waiting to see if Trump will be a different kind of politician or whether he will do nothing about unfairly traded aluminum and steel imports.
Trump made a series of specific promises to the workers in Monessen, virtually none of which have been kept.
“Any country that devalues their currency in order to take unfair advantage of the United States, which is many countries, will be met with sharply. And that includes tariffs and taxes,” he said that day. He repeatedly announced on the campaign trail that he would label China a currency manipulator on “day one” in office because the Asian giant was stealing American jobs. But on that first day, he didn’t. And when another chance to take action arose in October, he didn’t then either.
He also pledged in Monessen to withdraw from the Trans-Pacific Partnership, a trade deal that had been proposed among 12 Pacific Rim countries. And he did that on his first day in office. But even before that official act, the proposal was dead because environmental, labor, religious, agricultural, and other civic organizations had so vociferously opposed it that neither Democrats nor Republicans would bring it up for a vote in Congress. So Trump’s withdrawal was more symbolic than significant.
He promised to renegotiate NAFTA. And he is. But there’s no new deal. Talks drag on while companies like Carrier and Rexnord continue to move American factories to Mexico, which is the problem, not Canada. To end the factory and job drain to the south, Canada agrees that a renegotiated NAFTA must address Mexico’s ridiculously low wages and dearth of environmental enforcement.
Trump also promised to renegotiate KORUS, the trade pact with South Korea, and that’s happening, but there’s no new deal there either.
He swore he’d take action to stop China from stealing trade secrets from American companies. “I will use every lawful – this is easy. This is so easy. I love saying this. I will use every lawful presidential power to remedy trade disputes,” he said. And in August, the administration began investigating allegations that China steals intellectual property. But, like the inquiries into steel and aluminum, there are no results, no action.
Trump asserted that American-made steel and aluminum would rebuild the nation’s crumbling infrastructure. “A Trump administration will ensure that we start using American steel for American infrastructure. And aluminum,” he said in Monessen.
He has since then occasionally talked about infrastructure needs. But it wasn’t until last month, a year after Trump took office, that the administration proposed a plan to fund reconstruction of the nation’s roads, bridges and water systems. And its prospect of passing in Congress is poor. Also, in his State of the Union address, Trump failed to mention using American products.
So steel and aluminum workers are left waiting. Waiting.
Trump was right when he said in Monessen, “We allowed foreign countries to subsidize their goods, devalue their currencies, violate their agreements and cheat in every way imaginable, and our politicians did nothing about it. Trillions of our dollars and millions of our jobs flowed overseas as a result.”
The question now is when will Trump deliver the fast action he vowed he would take to correct that horrible situation.