Manufacture This

The blog of the Alliance for American Manufacturing

The USTR is holding a hard line, but is the Oval Office wavering?

On Wednesday morning U.S. Trade Representative Robert Lighthizer – the Trump administration’s point man in its trade negotiations with China – is headed to Capitol Hill to update the House Ways & Means Committee on the talks’ progress.

Democrats run the House now. And Democrats typically don’t like Trump administration policies. So there could be trouble!

Or … not? It turns out that getting tough on Chinese trade practices is a popular position across the American political spectrum (There are plenty of Republicans in Congress who are uninterested in this trade fight). And Mr. Lighthizer has an established record as a trade “hawk” who’s uninterested in a signing a deal just because expediency calls for it. The question is, is the president interested in such a deal?

The concern for many is yes, he is. The president likes presiding over a good economy, so any slowdown could spook him into an easy agreement. And more concern was raised this weekend after he announced (on Twitter, naturally) that he was extending the March 1 deadline for trade-talk progress before significant U.S. tariffs on Chinese imports kicked in. Reuters notes:

In his February 5 state of the union address, Trump said a China trade deal ‘must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs’.

But as the March 1 deadline drew closer, Trump appeared increasingly eager to make a deal, saying on several occasions that he might extend the deadline, causing concerns among trade watchers that he was eroding Lighthizer’s leverage in the talks.

“What has me shaking my head is this move to give away perhaps our greatest point of leverage in the talks without getting anything in return,” Alliance for American Manufacturing President Scott Paul told the Washington Post.  

The president is clearly feeling the pressure. He’s recently lashed out at Democratic critics, notes the New York Times:

“Any deal I make with China, Schumer is going to stand up and say, ‘Oh, it should’ve been better,’” Mr. Trump said, referring to Senator Chuck Schumer of New York, the minority leader. “That’s called politics.”  

So … what’s this mean for Mr. Lighthizer on Capitol Hill tomorrow? The Democrats on the Ways & Means Committee could very well encourage him to keep pressing for a tough deal or no deal at all – and to keep making the case for that position to the president.

More commodities and energy sold to China would be great, but that’s not what this dispute is about.