WASHINGTON (AP) — The Trump administration plans to carry on with its confrontational approach to world trade, pressuring other countries to lower their tariffs on U.S. products and perhaps making it harder for imports to enter the United States duty free.
Watch the committee in the player above.
In testimony before Congress Wednesday, U.S. Trade Representative Robert Lighthizer said the administration would push for more change at the World Trade Organization, the Geneva-based enforcer of global trade rules that the administration has accused of anti-U.S. bias.
“The WTO is a mess,” Lighthizer told the House Ways and Means Committee. “The WTO has failed America, and it’s failed the international trading system.”
Under WTO rules, Lighthizer complained, other countries levy tariffs — import taxes — “far above” the tariffs the U.S. imposes.
Lighthizer’s comments suggest that “he wants to force others to lower their tariffs to our levels, and he will threaten to raise ours to theirs if they do not,” said William Reinsch, a former U.S. trade official now at the Center for Strategic and International Studies in Washington.
But Reinsch noted that the United States agreed to the existing tariffs in past negotiations.
If the Trump administration wants to change tariff rates it will face hard choices. To get other countries to lower their tariffs, it will have to negotiate — and make concessions. If the U.S. raises tariffs on its own instead, it will likely face retaliation from its trading partners.
“There is no free lunch,” Reinsch said.
In another effort to pressure the WTO to reform, the United States has blocked new appointments to the organization’s Appellate Body, its top trade court. When the terms of two judges expired last year, the court ceased to function, leaving trade disputes without an ultimate arbiter. Lighthizer told lawmakers Wednesday that he’d be “fine” if the Appellate Body never resumed business.
Lighthizer also said the administration would consider lowering the $800 threshold for bringing products into the United States duty free. In written testimony, he noted that the European Union’s so-called de minimis threshold, above which duties can be imposed, is $150, and China’s is just $7. That disparity puts U.S. exporters at a disadvantage.
President Donald Trump took office in 2017 determined to upend seven decades of U.S. policy in favor of ever-freer trade and to bring down America’s persistent and massive trade deficits.
He has slapped tariffs on about $360 billion worth of Chinese imports in a dispute over the aggressive tactics — including, the U.S. says, cybertheft and forcing foreign companies to hand over trade secrets — Beijing has used to challenge Western technological dominance.
In January, the U.S. and China reached an interim trade deal to reduce tensions. China agreed to buy massive amounts of U.S. products.
Lighthizer said Wednesday that he is confident China will live up to its purchase commitments even though its economy has been weakened by the coronavirus pandemic and the lockdowns and travel restrictions imposed to contain it.