Washington ~ President Trump’s first State of the Union speech continued his administration’s “America First” approach. Specifically, the president addressed a new trade policy in which “the era of economic surrender is over.”
The Coalition for a Prosperous America’s (CPA) Chairman, Daniel DiMicco said “The President’s speech was very powerful and spoke to the real concerns of Americans everywhere.”
Michael Stumo, CEO of CPA, issued the following statement in response to the president’s remarks:
Our manufacturing, agriculture, and worker members support President Trump’s pivot from the naive free trade mythology of the past to the reality of strategic trade. Withdrawing from the job killing Trans-Pacific Partnership was his boldest accomplishment. The administration’s trade negotiation and enforcement team is top-notch. Trade deficits are no longer dismissed as simply a theoretical economics problem.
The administration rightly named China a strategic competitor in its National Security Strategy, and has called out Beijing’s predatory mercantilism. We commend the president’s action imposing tariffs on subsidized solar panels and clothes washers as a welcome enforcement of existing laws—though the relief may prove too temporary, lasting only four years, in the face of long-term subsidy strategies by China and South Korea.
More work needs to be done. The trade deficit increased yet again in 2017, dragging down 4th quarter growth by 1.13%. We encourage the president to continue developing his strategy to reduce the trade deficit. The US-China trade deficit of 2017 became the largest bilateral deficit between any two countries in history. Trade agreement negotiations, while important and we support them, may be ill-suited to address the challenges of mercantilist countries.
Currency manipulation and misalignment, primary drivers of America’s trade deficit, are critical to address. President Reagan and his Treasury team ultimately understood, in the face of then-record trade deficits, that exchange-rate market failures needed to be fixed. They took aggressive action in the 1985 Plaza Accord which worked, nearly balancing trade within a few years and minimizing Japan’s mercantilism at the time. We encourage the Trump Administration to focus on achieving a competitive dollar price to balance trade and eliminate America’s position as a dumping ground for global overcapacity.
American industries and workers are still awaiting the results of investigations on steel and aluminum dumping, and Chinese theft of intellectual property. Our members support strong action and are hopeful that remedies will be announced promptly, will be robust, and will deter future trade misconduct.
The President’s infrastructure investment goals are welcome and should be aggressively pursued by the Congress. However, we hoped to hear that American-made steel, goods, and services will be utilized at federal, state and local levels. There is still time for the administration to act strongly to ensure that US jobs and industries can benefit from the spending of taxpayer dollars.