Northwest Arkansas Democrat-Gazette
New trade deals remain on hold
Businesses still waiting on Trump’s planned reboots
WASHINGTON — Donald Trump promised Americans that they would be exhausted from “winning” on trade under his presidency. But nearly seven months after Trump took office, the industries he vowed to protect have become tired of something else: waiting.
After beginning his presidency with a bang by withdrawing from the TransPacific Partnership pact in January, industry leaders and analysts say Trump has accomplished little else of significance when it comes to reorienting deals with other countries. Instead, his administration has been consumed by investigations into possible Russian collusion and a failed attempt to repeal the Affordable Care Act.
America’s steelworkers are waiting for Trump to fulfill his promise to levy tariffs on steel imports. Home builders want the president to cut a deal with Canada to end a dispute over its softwood lumber exports. And cattle ranchers are longing for a bilateral pact with Japan to ease the flow of beef exports.
“It’s frustrating because of the impact it’s having on the industry,” Leo Gerard, president of United Steelworkers International, said of the delayed outcome of a highly anticipated steel investigation. “It’s creating a crisis that’s being exacerbated.”
The Commerce Department was poised to deliver a report to Trump by the end of June with recommendations for steel tariffs, on the ground that cheap imports pose a national security threat. But the process became bogged down when industries that buy steel objected and other countries threatened retaliation. Trump said recently that dealing with steel was no longer a top priority, and Wilbur Ross, the commerce secretary, signaled to members of Congress in briefings last month that a decision was no longer imminent.
Gerard said foreign competitors had been flooding the U.S. market with steel products in anticipation of the tariffs. Some of this is
happening in parts of the country that voted for Trump. “This has been a bit of a letdown in the industrial heartland,” said Gerard, who is based in Pittsburgh. “A lot of our members supported the president because of what he said about steel and manufacturing.” But steel only scratches the surface. One accomplishment that Trump has notched on trade has been an agreement with China that opened its market to U.S. beef exports. For the beef industry, however, the benefits of that deal pale in comparison with the cost of abandoning the Trans-Pacific Partnership, which had been spearheaded by President Barack Obama. It would have provided access to the Japanese market. Instead, Japanese tariffs on U.S. frozen beef, which would have declined under Obama’s deal, are on the rise. They increased last week making America’s meat even more vulnerable to competition from countries such as Australia. “TPP was fantastic,” said Kent Bacus director of international trade for the National Cattlemen’s Beef Association. “When you walk away from it without a meaningful alternative, that causes a lot of alarm in the beef industry.” Despite the delays, the pace of action on trade is expected to pick up soon. In the coming days, the U.S. trade representative is expected to unveil a trade case accusing China of extensive violations of intellectual property. On Aug. 16, the United States, Mexico and Canada are to begin talks on renegotiating the North American Free Trade Agreement, which Trump threatened this year to terminate before reversing course. These moves will come with their own set of risks. Bacus, for instance, said NAFTA, while much derided by Trump, had been a boon for beef exports. He is hoping Trump makes only modest adjustments to the terms of trade with America’s neighbors and moves quickly to strike a trade deal with Japan, whose $1.5 billion market is the biggest and most important one for beef. Trade experts say the slow movement on trade is another example of the administration’s realizing that governing is more complicated than campaigning. “I think what the Trump administration has learned is that trade policy is really, really hard and when you actually start to think about making policy changes, any policy change that you make is going to hurt somebody and they are going to make that known,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “Any time you implement a tariff or take a tariff away, there’s going to be winners and losers.” And imposing tariffs to protect one domestic industry often does damage to another. The most prominent recent example comes from the home construction industry. At a campaign speech to the National Association of Home Builders in Miami a year ago, Trump waxed nostalgic about his father’s days in the business. “I’m so comfortable in this business, and it taught me so much,” he said to a round of applause. In April, the Trump administration announced that it would impose new tariffs on Canadian softwood lumber, saying the exports are unfairly subsidized. The proposed tariffs, which could be as high as 24 percent, have already led to a spike in lumber prices. According to Bloomberg data, they are up nearly 18 percent this year. That has put the squeeze on U.S. home builders, who rely heavily on Canadian lumber. The United States imported $5.7 billion in softwood lumber last year, mainly for residential building. “The increase in cost is due to the trade war with Canada,” said Gerald Howard, chief executive of the National Association of Home Builders. “The availability of Canadian lumber is at risk, so the price is going higher.” Builders are looking to Europe and Russia for lumber because Canada has become so expensive, Howard said. They are also passing on costs to buyers, which could become a drag on the housing market. The industry’s lobbying group wants the Trump administration to quickly reach a new deal with Canada on lumber. It also hopes that Trump will remember his roots in the industry. “The president strongly believes in what’s going on with the tariffs, and he has pursued protectionist policies in this area,” Howard said. “We disagree with him.”