Trade Practitioners Question Logic Behind Trump Policies

BALTIMORE -- Trade policy under President Donald Trump is upending years of largely consistent approaches to U.S. trading partners, panelists said during the American Association of Exporters and Importers annual conference on June 8. While the panelists mostly agreed that the consequences of the tariff-centric approach is too harsh, some expressed sympathy with the administration's general reaction to globalization.

There's no question the Section 232 tariffs are causing major headaches for Tata, said Tina Kimble, deputy director of governmental affairs for Tata Steel, who emphasized that she was speaking for herself and not the multinational steel producer she works for. Tata imports semi-finished steel inputs from Wales and the Netherlands to the U.S., processes them, and then, in some cases, re-exports them to Europe, she said.

The tariffs have put Tata in conflict with its customers as they try to hammer out who will eat the cost, and to what degree, Kimble said. She expects some customers to move some production out of the U.S. in response in coming months, because the finished goods they make are not subject to tariffs. Tata already saw this when the Commerce Department levied a 2 percent antidumping duty on a competitor's product from Japan. She doesn't know if European steel that undergoes minor processing at Tata's U.S. facility, which is imported under bond, will be hit by retaliatory tariffs when it goes back to Europe. "This is just absurd," she said.

The exclusion process has been a disaster, she said, and she has no faith that arguments about business impact will be effective. "We don’t know what he’s going to do, but the general sentiment that is starting to develop is 'don’t bother, it’s going to fall on deaf ears,'" she said. Even so, Kimble said, she understood the goal of levying tariffs against Europe's steel producers is to motivate European officials to lean harder on China to cooperate with the multilateral forum on steel overproduction.

Those discussions began two years ago, and China has not yet shared data on its production levels, she said. "When I go to Ohio and I am seeing the steel community and it is destroyed," she said. "These people are hurting. And this administration is talking to them and says: We want to help you. Nobody knows whether what they’re doing is going to help them or hurt them, but they see him trying."

Bill Reinsch, a trade expert at the Center for Strategic and International Studies, moderated the panel and said he tried to get an administration official to join the panel and defend Trump's approach on trade, but they refused. Trump's approach should come as no surprise, he said. "He’s had firm fixed views about trade for at least 30 years. He said the same thing then that he said in the campaign that he said today. It’s a theme of victimization, the U.S. being taken advantage of by its trading partners … to the detriment of our jobs and our manufacturing base."

"He really talks only about manufacturing. And within manufacturing, the talks about cars and steel. He doesn’t have much to say about chemicals, pharmaceutical, and he has nothing to say about services," he said. "In political terms, his approach has the genius of simplicity -- 'We have been wronged, I’m going to fix it,'" Reinsch said. "And it has the advantage … of having elements of truth in it."

David Salmonsen, senior director of governmental relations for the American Farm Bureau Federation, said even though rural America may get whacked because of retaliation, he doesn't think it's shifting the political winds among his members. "I don’t know that that [rural] support is being shaken at all," he said.

Perhaps as a consequence of that, Salmonsen was pessimistic of the chances of an amendment passing that would curtail Trump's ability to raise tariffs on national security grounds without congressional approval (see 1806060018). "A few senators are trying to say: We need to reassert ourselves," he said. "I don’t have a lot of great hopes of that moving, at least right now."

Reinsch agreed, but added, "Resistance is mounting on this issue, though. This issue may come back. You may see the Republican leadership willing to stand up and defy the president, but you’re not going to see that next week."