President Donald Trump is set to sign executive orders instructing his administration to examine the cause of trade imbalances with over 15 countries, including China and India. The announcement, which would come just days ahead of Trump’s first meeting with his Chinese counterpart Xi Jinping, is widely seen as targeting China.
However, Commerce Secretary Wilbur Ross, during his interaction with White House reporters, insisted that the executive order expected to be signed on Friday is not just about China.
It is about all major countries with which the United States has significant trade deficit.
Reading out the list of countries with which the US has significant trade deficit, Ross also named India down the line with a trade deficit of USD 24 billion.
The US has a massive trade deficit of USD 347 billion with China, followed by Japan (USD 68.9), Germany (USD 64.9), Mexico (USD 63.2 billion), Ireland (USD 35.9 billion) and Vietnam (USD 32 billion).
Other countries mentioned in the list were Italy, South Korea, Malaysia, Thailand, France, Switzerland, Taiwan, Indonesia and Canada.
“This is not meant to say that everybody on this little list is an evil doer. That’s not the case,” Ross said, noting that China is the number one source of trade deficit.
As per the executive order, Ross said President would instruct the Department of Commerce and the US Trade Representative to review and report back to him within 90 days on actionable items to reduce the trade deficits.
The report among other things would examine the reasons for trade deficit and to what extent these are caused by “cheating and other inappropriate behaviour,” Ross said.
Echoing similar views, Peter Navarro, Director of White House National Trade Council, said, “Nothing we’re saying tonight is about China. Let’s not make this a China story. This is a story about trade abuses.”
“This is a story about under-collection of duties, this is a story about 40 countries that basically subsidise their products and send them into our country or dump their products, and this is about collecting those products and defending American workers and manufacturing,” Navarro said.
Responding to questions, Ross said the report among other things would also examine issues like currency misalignment, foreign excess capacity or constraints imposed by the WTO on the United States have contributed to the bilateral deficits.
“It will demonstrate the administration’s intention not to hip-shoot, not to do anything casual, not to do anything abruptly, but to take a very measured and analytical approach, both to analysing the problem and therefore to developing the solutions for it,” Ross said.
In another executive order, Trump would instruct the Department of Homeland Security to strengthen anti-dumping rules and enforcement.
“From a policy point of view it really goes like a laser at a problem and it solves it quickly, one that’s been going on for 15 years,” Navarro said.
“The the anti-dumping consists of dealing with countries that are actually violating the rules. For example, in trade, in steel, we now have something like 187 cases of these kind of duties and anti-dumping outstanding. More than half of those involve China,” Ross told CNBC.
According to Navaro, USD 2.8 billion in import taxes imposed against violators of US anti-dumping laws have gone uncollected since 2001.
“For the first time, we’re looking at what’s been the source of the large and persistent trade deficit that has contributed to job losses,” he said.