Everything you need to know about the trade deficit
- Author: Carolyn Briggs Apr 02, 2017,
Apr 02, 2017, 4:21
President Donald Trump directed trade officials Friday to conduct what will be the first country-by-country, product-by-product review of the causes of US trade deficits, apparently targeting major trading partners such as China and Japan.
In one of them, Trump required the commerce secretary and the USA trade representative to prepare a report within 90 days, assessing the practices of U.S. trading partners contributing to the 500 billion U.S. dollars trade deficit the United States had in 2016 on a country-by-country and product-by-product basis.
President Donald Trump signed a pair of executive orders Friday focused on reducing the trade deficit just days before he conducts his first meeting with his Chinese counterpart. The review will be to assess whether deficit is being caused by cheating, specific trade agreements, lax enforcement or World Trade Organization rules. "If anyone had any doubt about the president's resolve to fix the trade problems, these two executive orders should end that speculation now and for all time", said Commerce Secretary Wilbur Ross.
The "GREAT Revival" in US manufacturing began Friday, according to President Trump.
Taking the first step in this direction, Trump on Friday issued an executive order asking officials to pinpoint "cheaters" - either countries or firms - who are responsible for America's almost $50 billion a month trade deficit.
Since 2001, the US Customs and Border Protection Agency has not collected over $2.8 billion in these duties, he said.
"The meeting next week with China will be a very hard one in that we can no longer have massive trade deficits and job losses", Trump tweeted.
The biggest trade deficit was with China, at $347 billion in 2016, a 5.5% decrease from 2015 as imports from China fell.
Ross named 16 countries that the USA runs major trade deficits with.
In remarks at the Oval Office, Trump said he had seen the situation first-hand as he traveled the country and found how bad trade deals had hurt American workers.
One of the orders directed the Commerce Department and the USA trade representative to conduct a 90-day review of the causes of massive US trade deficits.
President Trump heavily criticized US foreign trade policy during his presidential campaign.
"It will demonstrate the administration's intention not to hip shoot, not to do anything casual, not to do anything abruptly, but to take a very measured and analytical approach", said Ross, adding that the administration might take actions before the report has been fully compiled.
The second trade order to be signed by Trump is aimed at halting the non-payment and under-collection of anti-dumping and anti-subsidy duties the United States slaps on many foreign goods. U.S. officials say China unfairly uses subsidies, currency manipulation and other tactics to flood USA markets with goods too cheap for American companies to compete with, including steel and aluminum.
Head of the World Trade Organization Roberto Azevedo said there was a need for clarity on United States trade policy, to see how public declarations translate into policy. "This also helps improve the trade imbalance between China and the United States".
But business leaders and lawmakers cautioned the White House that there are many reasons for trade deficits and they don't always reflect the the condition of the USA economy. He spoke very positively about what he was going to sign.