WASHINGTON -- By choosing a trade hawk as the next chief U.S. negotiator, President-elect Donald Trump may be paving the way to exert greater control over trade matters, such as requiring other nations to import a certain amount of American goods.
Trump named lawyer Robert Lighthizer as his U.S. trade representative Tuesday. Lighthizer served as the deputy USTR for former President Ronald Reagan. His achievements in that role include having Japan agree to adopt voluntary limits on steel exports in the mid-1980s. Lighthizer has since represented United States Steel and urged that President Barack Obama implement anti-dumping tariffs on cheap Chinese metals. Lighthizer embodies Trump's vision of a strong America.
The president-elect plans to create a National Trade Council in the White House to oversee U.S. trade policy. The USTR, which handles international trade negotiations, and the Department of Commerce, responsible for creating export strategies for American products, will work under the council, executing its policies.
Lighthizer's nomination means China hawks will lead all three agencies. Peter Navarro, a professor at the University of California, Irvine, and author of the book "Death by China," will head the White House council. Investor Wilbur Ross was nominated as commerce secretary.
Navarro and Ross played key roles in crafting Trump's economic policies during his presidential election campaign. The pair claimed in a policy paper last fall that reducing the "trade deficit drag" would lead to greater growth. They have called for U.S. trading partners to set an import target for American goods, and even named specific areas for bolstering exports such as in natural gas and industrial machinery.
Their trade policy will involve extensive government intervention, and Lighthizer has experience at expanding government involvement in international trade.
"China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade," Trump tweeted Monday. The U.S. trade deficit with China hit a record $367.4 billion in 2015, more than quadrupling since 2000, the year before China joined the World Trade Organization. Today, dumping of steel products by China is causing international trade frictions.
"Lighthizer told U.S. authorities that they should adopt broader interpretations of WTO rules to gain an upper hand in trade talks with China," a source familiar with the matter said. Lighthizer is thought to be mulling raising anti-dumping tariffs based on Beijing's manipulation of the yuan, or enacting import safeguards on Chinese products.
Drastic measures aimed at eliminating trade deficits also could target Japan, another nation that enjoys huge trade surpluses with the U.S. Trump has suggested raising tariffs on Japanese cars, and he has slammed Japan for alleged intervention in the currency market to weaken the yen. The Japanese economy, buzzing with hope after the yen depreciated following Trump's election win, could be smacked beyond its trade with the U.S. if the incoming administration takes a hard line on currency exchange as well.
Trump has announced his intention for the U.S. to leave the Trans-Pacific Partnership trade pact. Lighthizer will put his skills to the test when he starts negotiating bilateral deals that likely will emerge from the ashes of the TPP.