WASHINGTON – Economic experts from both conservative and liberal perspectives said Thursday that U.S. trade policy likely will continue along the lines of the Obama administration this year with some protectionist rhetoric added by the Trump administration, deflating predictions of a trade war with China.
“I don’t see trade on the Trump administration’s agenda this year,” said David Dollar, who served at the Treasury Department during Obama administration. Instead the focus will be on tax reform and health care reform as front-burner issues for President Donald Trump.
“No one will rock the boat this year,” agreed Derek Scissors, a scholar at the conservative American Enterprise Institute.
Speaking at a panel discussion, they also agreed that 2017 will be a test for the Trump administration to set a successful bilateral trade deal example and achieve economic improvement.
“If we don’t get tax reform this year, if the economy is not getting better, if we don’t see the labor force market improve,” Scissor said, “the political pressure will be very high.”
He added that U.S. trade will on the agenda in 2018.
Trump’s trade representative nominee, Robert Lighthizer, passionately defended Trump’s “American first” trade policy at a Senate confirmation hearing Tuesday and promised to work with Congress to deploy tools to hold trading partners accountable for alleged trade violations.
The Trump administration has indicated in its official trade policy agenda that it would prioritize the U.S. trade law over the World Trade Organization’s rules to punish trading partners.
Rory Macfarquhar, who was a special assistant to President Barack Obama on the National Security Council and National Economic Council, said enforcing U.S. trade laws unilaterally has a “questionable strength.”
“I don’t believe that the WTO was set up to deal effectively for a country like China and their industrial policy,” Lighthizer said at the hearing when being asked how he planned to address Chinese overproduction of steel and other products. But he didn’t dismiss WTO’s role in settling trade disputes.
“We have to use the tools we have, and then I think we have to find a responsible way to deal with the problem by creating some new tools,” Lighthizer said.
Dollar and Scissors said an unstable China isn’t in America’s interests. “It is important that we continue the dialogue with China,” Dollar said. Trump reportedly plans to host China’s President Xi Jinping at a two-day summit in April.