Trump tariff threat to China as US shifts focus to new FTAs

March 26, 2018: US trade policy has become more dangerously unilateral and contradictory.

US President Trump  threatened on March 23 to impose tariffs on US$60 billion of Chinese exports to the US after a “consultation” period. This is also linked to US strategic and military competition with China. China has threatened to retaliate with its own tariffs on US goods, resulting in a trade war and economic instability. Global stock markets plunged in response to the news.

Ironically, although such unilateral tariff action would violate WTO rules, Trump has also threatened to lodge a WTO dispute against China for presiding over violations of WTO intellectual property rules. This is despite the fact that the US has disrupted the WTO dispute process by refusing to nominate arbitrators to it.

On the same day, the US Trade Representative Robert Lighthizer told the US Senate Finance Committee that his office is now ready to pursue separate Free Trade Agreements with Japan, the Philippines and an unnamed African country. He said any new FTAs would be quickly finalised, and that agricultural exports would be a priority.

These moves follow last week’s announcements of tariffs on steel and aluminium imports into the USA, again after a “consultation” period that maximises US bargaining power. This naked and contradictory use of economic power shows that the current system is broken. We need fairer trade rules for an open democratic trade system that includes all governments, based on labour rights and environmental sustainability, so that trade agreements will actually improve peoples’ lives.