Executive Order Instructs Trade Deficit Review
A March 31 executive order (here) signed by President Donald Trump tasked the commerce secretary and the U.S. trade representative with leading interagency efforts to submit a report to the White House by June 29 on the causes and impacts of the 2016 U.S. trade deficit in goods. The order instructs those Cabinet officials to consult with the secretaries of State, the Treasury, Defense, Agriculture and Homeland Security in preparing the report. The order also notes a 2016 U.S. trade deficit in goods of more than $700 billion and an overall trade deficit last year of more than $500 billion.
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For each trading partner with which the U.S. had a “significant trade deficit” in goods in 2016, the report should assess the main causes of the deficit, including differential tariffs, non-tariff barriers, injurious dumping and government subsidization, intellectual property theft, forced technology transfer, denial of worker rights and labor standards, and “any other form of discrimination” against U.S. commerce or other factors behind the deficit. The report should also assess whether the identified trading partners are “directly or indirectly” imposing unequal burdens on, or unfairly discriminating “in fact” against U.S. commerce through laws, regulations or practices, and therefore placing U.S. commerce at a competitive disadvantage, according to the executive order. For these partners, the report will also assess bilateral trade relationships’ effects on U.S. production capacity, the strength of domestic manufacturing and defense industrial bases, and employment and wage growth, the order says. The report should also identify imports and foreign trade practices that might be impairing U.S. national security, the order states.
The commerce secretary and U.S. trade representative may hold public meetings and seek comments from relevant state, local, and non-governmental stakeholders, including “manufacturers, workers, consumers, service providers, farmers and ranchers,” as part of their preparation of the report, the order says. The policy portion of the executive order notes that it is in the U.S. economic and national security interest to promote commerce by strengthening trade relationships, “vigorously” enforcing U.S. trade laws, improving overall conditions for competition and trade, and ensuring strength of defense and manufacturing bases. The order also asserts that the U.S. hasn’t received the “full scope of benefits” expected under “a number of” free trade agreements or from participating in the World Trade Organization.