Trump may seek trade investigation

UNITED STATES: President Donald Trump is considering an executive action that would launch a formal investigation into the way US trading partners use subsidies and use a tactic known as ‘‘dumping’’ to skew imports and exports, a White House official said.

If signed, the executive action would call for a review of foreign trading practices and could, depending on the results, be followed by retaliatory trade measures from the administration. The action would additionally reflect a tension within the White House between the economic populists, who have argued for more aggressive and adversarial moves against foreign countries, and the growing influence of pragmatists, who have called for a more measured approach.

During his campaign, Trump repeatedly attacked others countries over their trade practices, arguing other countries were contributing to the US trade deficit - the gap between the cost of a country’s imports and its exports - by using subsidies and other practices to undercut US firms and lure away jobs.

Through export subsidies, foreign government provide funds to help their manufacturers lower the price of their exports to make them more attractive to international buyers - a practice is often viewed as a violation of World Trade Organisation rules.

Trump has argued that the US’S trade deficit with China and Mexico is disproportionately large, and he has taken particular aim at China, accusing them of manipulating their currency to boost their exports. During the campaign, he promised to formally label China a currency manipulator once he takes office, but he has declined to follow through on that threat.

Should the administration want to take that step, it will have an opportunity to do so soon. Within days, the Treasury Department is expected to release its semiannual currency report. The Trump administration is not expected to use the report to formally label China a currency manipulator but the language it does use will be closely studied for any clues about how it plans to engage with China about currency issues in the future.

Trump and his advisers reached an agreement with Chinese President Xi Jinping at a meeting last week to launch a 100-day plan to improve trade relations between China and the US, a much more tepid step than Trump had promised during the campaign.

But the executive action under review could eventually lead to more aggressive US trade actions against China, a sign that some voices within the White House believe more is needed.

It could focus specifically on the steel and aluminum markets, as US officials have said that China’s trade practices in this area have had a major impact on US manufacturers’ ability to compete.

The White House official, speaking on condition of anonymity, said: ‘‘The administration would use the results of that investigation to determine the best path forward, which could potentially include everything from no action at all to the levying of supplemental duties. But whichever action we take would be informed by the results of the investigation and not by predetermined conclusions.’’ - Washington Post