One week before he hosts a meeting with Chinese President Xi Jinping, President Trump on Friday signed a pair of executive orders aimed at cracking down on trade abuses and identifying the causes of America’s massive trade deficit.
“We’re going to get these bad trade deals straightened out,” Trump said from the Oval Office. “The jobs and wealth have been stripped from our country, year after year, decade after decade, trade deficit upon trade deficit reaching more than $700 billion last year alone and lots of jobs.”
The first executive order concentrates on tougher enforcement of anti-dumping laws and increasing the collection of anti-dumping penalties and so-called countervailing duties — a mechanism used against foreign governments that subsidize their producers and sell goods at below-market prices.
Anti-dumping penalties target exporters that sell goods below the cost of production.
Between 2001 and 2016, about $2.8 billion in import taxes went uncollected from companies in 40 countries, White House Press Secretary Sean Spicer said Friday. He told reporters that by not using the enforcement mechanism properly, Americans lose out on funds that could be used for other purposes.
The second executive order calls on the Commerce Department and U.S. trade representative to produce a comprehensive report to identify “every possible cause of the U.S. trade deficit.”
Robert Lighthizer, Trump’s nominee for post, has yet to be confirmed.
Once completed, the findings of the report will serve as the foundation that will guide the Trump administration’s future trade policy.
Officials will consider the impact on deficits of trade abuses, non-reciprocal trade practices, specific trade obligations, poor or inconsistent enforcement and World Trade Organization rules.
U.S. Commerce Secretary Wilbur Ross praised Friday’s step.
“If anyone had any doubt about the president’s resolve to fix the trade problems, these two executive orders should end that speculation now and for all time,” he said standing next to Trump. “This marks the beginning of the totally new chapter in the American trade relationship with our partners overseas.”
Speaking to reporters on Thursday, Ross said the first-of-its-kind report demonstrates that the administration will “not to do anything abruptly, but to take a very measured and analytical approach, both to analyzing the problem and therefore to developing the solutions for it.”
The cautious approach is welcome news to some in the business community.
“They are not just jumping into something. They are going to carefully look at what it is we really want to accomplish and hopefully think about how it will affect us and the other country,” founder of Paul Mitchell and billionaire investor John Paul DeJori told Fox Business Network.
Administration officials have 90 days to finish a country-by-country and product-by-product analysis.
The report will also examine whether bilateral deficits are caused by free trade deals, like NAFTA, and actions taken by previous administrations.
White House Trade Council President Peter Navarro broke slightly from Trump, saying deficits are not always bad for the economy and that bad behavior is not always the cause.
For example, one of the reasons for the trade deficit with Canada is the U.S. is not energy independent and imports a lot of oil.
Asked Friday why Trump has not fulfilled his pledge to label China a currency manipulator on “Day One,” Spicer said a decision would occur after next Thursday’s meeting with Xi Jinping.
Navarro argued the executive orders address far broader concerns than just China.
“Let’s not make this a China story. This is a story about trade abuses, this is a story about an under-collection of duties,” he said.
Trump, however, recognizes the potential for an uncomfortable meeting next week in Palm Beach, Fla.
“The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits,” Trump said in a Thursday tweet.
He added that “American companies must be prepared to look at other alternatives.”
On March 7, the Commerce Department released figures showing the U.S. had amassed its largest trade deficit since March 2012.
In January 2017, the trade deficit for goods and services was 11.8 percent higher as compared to January 2016, increasing from $43.4 billion to $48.5 billion.
“Today’s data shows there is much work to be done,” said Ross in a statement, adding that the administration would in the coming months “renegotiate bad trade deals and bring renewed energy to trade enforcement in defense of all hard-working Americans.”