The gap between Trump’s talk and actions on trade widens again
WASHINGTON — Increasingly, when it comes to foreign trade, the Trump administration is talking loudly and brandishing a small stick.
The widening gap between President Donald Trump’s bellicose talk and the modest actions of his administration was again on display Friday as he presided at the ceremonial signing of two executive actions. They would, he said, “set the stage for a great revival of American manufacturing.”
“Under my administration, the theft of American prosperity will end,” he said.
But the new actions, authorizing a large research study and strengthened enforcement of an existing law, are unlikely to effect a major change in the nation’s fortunes. Instead, the ceremony highlighted an emerging pattern on trade.
Trump blasted the Trans-Pacific Partnership as a “potential disaster” and made a great show of removing the United States from the ratification process. On Friday, one of Trump’s top advisers on trade said the Trump administration planned to use the scorned agreement as a “starting point” for its own deals.
NAFTA
Trump described the North American Free Trade Agreement with Mexico and Canada as history’s worst trade deal and vowed to overhaul or replace it. The White House is now planning to seek relatively modest changes in the agreement, according to a draft document provided to key members of Congress.
Trump also chided China on Twitter ahead of President Xi Jinping’s visit to his Mar-a-Lago estate in Florida next week, declaring that the United States “can no longer have massive trade deficits.” But the Trump administration has not articulated specific plans to shrink that deficit; the Treasury Department has not moved to keep Trump’s promise of declaring China a currency manipulator.
The gap reflects the difficulty of keeping some of Trump’s specific promises. There is, for example, no evidence that China is manipulating its currency. The Trump administration also is under considerable pressure from congressional Republicans and industry groups to avoid costly economic disruptions.
Basic divide
But the gap also exposes a basic divide on trade policy within the Trump administration.
One group, largely campaign veterans like economist Peter Navarro, still favors the kind of dramatic measures Trump promised on the campaign trail. This view resonates deeply with the president, who noted Friday that tough talk about trade is “probably one of the main reasons I’m here.”
Another group, which includes many of the economic advisers Trump has added since the election, like Gary Cohn, the director of the National Economic Council, are convinced that measured actions on trade will produce better results.
And so far, that second group appears to be winning most of the internal skirmishes.
At Friday’s signing ceremony, Trump was joined by representatives of both camps: Navarro and Wilbur Ross, the commerce secretary, who is becoming an increasingly important figure on trade policy and who tends to favor the more pragmatic approach.
The gap between the administration’s language and its actions so far is maintaining support both from proponents of stronger action on trade and from those who favor restraint, as each side hopes its views will prevail.