WASHINGTON -- President-elect Donald Trump singled out the U.S. trade deficit with Japan and perennial target China as examples of American industrial weakness Wednesday, and he repeated his threat of hefty tariffs for companies moving production abroad.
The incoming president held his first news conference since the election at Trump Tower, his home and transition headquarters in New York. American "trade deals are a disaster," he said, repeating a line heard often during the campaign.
"We have hundreds of billions of dollars of losses on a yearly basis -- hundreds of billions with China on trade and trade imbalance, with Japan, with Mexico, with just about everybody," Trump said.
The overall U.S. trade deficit in goods peaked in 2006 at $827.9 billion. In 2015, that figure stood at $745.6 billion, or 4.5% of gross domestic product. The deficit with China accounts for roughly half of the total, while that with Japan accounts for a little less than one-tenth -- roughly $70 billion. Japan ranks third behind China and Germany in terms of trade imbalance with the U.S.
Trump has tapped those with protectionist views to head trade policy, including a China critic as U.S. trade representative. This group likely will launch a vigorous assault on the trade deficit once Trump is inaugurated Jan. 20.
Stay at home
The president-elect also pledged "a very large border tax" on companies looking to move production to Mexico and reimport goods to the U.S. Trump has previously threatened to install a 35% tariff in such instances -- talk that has kept Japanese companies on edge since the election.
Such actions jibe with appeals during Trump's news conference to his base in the American Midwest, a region noted for manufacturing, including his pledge to be "the greatest jobs producer that God ever created." Efforts to retain manufacturing jobs in that region are essentially repayment for these voters' support.
Multiple companies have touted plans to boost investment and employment in the U.S. over the past several weeks, suggesting a response to pressure from the incoming administration. Trump said Wednesday that he "appreciates" such moves by automakers Ford Motor and Fiat Chrysler Automobiles.
Yet even if Trump personally cuts deals with companies once taking office, the resulting growth in employment will be limited, according to an official from an American business group. The U.S. added over 10 million jobs during President Barack Obama's tenure. But employment in manufacturing fell during that time.
This does not mean U.S. manufacturing is in decline: American auto exports by volume broke records three years running through 2014. Rather, production has been automated to boost cost-competitiveness, making fewer workers necessary. Raising employment in the sector is thus at odds with revitalizing business there.
To be determined
Trump steered clear of plans for tax cuts and infrastructure spending Wednesday, letting down markets hoping for a robust growth plan. Instead, the president-elect signaled with a sudden strike on the pharmaceutical industry that more political intervention in the affairs of individual companies could be in order -- a potential deterrent to economic activity underpinned by a set of uniform rules.
Japanese Chief Cabinet Secretary Yoshihide Suga sought to soothe concerns over Trump's apparent turn against the country.
"Generally speaking, brisk trade and investment are sources of dynamism in the economic relationship between Japan and the U.S.," he told reporters Thursday, adding that the government will continue working to develop and deepen those ties.
Japan looks to boost direct investment in the U.S., including via infrastructure projects Trump has portrayed as the heart of his economic policy, to ease tensions by spurring growth in the economy and employment.