Ag Policy Blog

Trump's Top Trade Nominee Has Protectionist Tendencies

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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President-elect Donald Trump filled out his trade team on Tuesday with another critic of China, but also a veteran of trade debates by naming Robert Lighthizer as his pick to head the U.S. Trade Representative's Office.

A Washington lawyer, Lighthizer was a deputy trade representative during the Reagan administration.

It's unclear exactly how Lighthizer will operate in the Trump presidency. The Trump transition team has stressed that Wilbur Ross, nominee for Secretary of commerce, will take a lead on trade talks while Peter Navarro, head of the newly created White House National Trade Council, will also have a hand in crafting trade policy.

The Wall Street Journal stated that Trump's selections for trade policy signals a major shift "threating China and Mexico with tariffs if they don't right alleged trade wrongs." The article added that Lighthizer has decades of experience advocating for punitive tariffs. Further, Lighthizer might not push hard for new free-trade deals.…

Trump took to Twitter on Monday to chide China on North Korea and also trade. Trump stated, "China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade, but won't help with North Korea. Nice!"

In 2008, after Sen. John McCain captured enough Republican primaries to win the nomination, Lighthizer wrote a column in the New York Times declaring that free trade is not really a conservative position on trade policy and that, in fact, more conservatives were protectionist on trade.

Lighthizer wrote, "Reagan's pragmatism contrasted strongly with the utopian dreams of free traders. Ever since Edmund Burke criticized the French philosophes, Anglo-American conservatism has rejected ivory-tower theories that disregard the realities of everyday life.

"Modern free traders, on the other hand, embrace their ideal with a passion that makes Robespierre seem prudent. They allow no room for practicality, nuance or flexibility. They embrace unbridled free trade, even as it helps China become a superpower."…

Lighthizer's nomination drew praise from the Coalition for a Prosperous America, a group that is largely opposed to current trade policy and trade deals.

“Ambassador Lighthizer is an excellent choice to replace Michael Froman as the US Trade Representative,” said Michael Stumo, CEO of CPA. “He understands that international trade is a strategic game of conflicting national interests and a competition for good jobs and industries. America must move past the failed and simplistic Econ 101 trade policy of the past because the results have been an economic carpet bombing of the non-urban areas of the US.”

The American Farm Bureau Federation also issued statement. Georgia farmer Zippy Duvall, president of AFBF, said the group looks forward to working with Lighthizer to get more favorable trade terms for agricultural products.

“America’s farmers and ranchers know unfair regulations, steep tariffs and senseless non-tariff barriers undermine our exports. We must work together to remove these obstacles to prosperity and identify new global opportunities that will benefit American agriculture," Duvall said.

Duvall added, “Economic growth in rural America depends on maintaining and increasing access to markets outside the United States. Since more than 95 percent of the world’s population lives outside our borders, expanding access to international markets is essential for our future success. We trust Mr. Lighthizer will work tirelessly to assure it.”

Leaders from the dairy industry also said they looked forward to working with Lighthizer as well. Unlike others who criticize trade with Mexico but not Canada, the dairy industry's statement went the opposite direction. The statement came from Jim Mulhern, president and CEO of NMPF, and Matt McKnight, senior vice president of Market Access, Regulatory and Industry Affairs for the U.S. Dairy Export Council,

"The U.S. dairy industry, like most other agricultural sectors across America, has significantly benefited from the agricultural provisions of prior U.S. free trade agreements. At the same time, however, we face a growing wave of nontariff barriers that threaten to impede overseas sales. Our NAFTA partners epitomize both sides of that story: Our dairy agreement with Mexico has created an export market worth well over $1 billion a year, while on the other side of the border Canada has at every opportunity decided to flout its dairy trade commitments to the U.S.

“A focus on preserving and growing what is working well, while cracking down further on what is not, will help to expand global markets for U.S. dairy farmers and the companies that turn their milk into nutritious dairy products shipped all over the world. Given that every $1 billion in U.S. dairy exports translates into over 23,000 jobs in the dairy sector and related industries, expanding dairy sales abroad is a strong job-creation strategy."

Updated USDA agricultural trade data for 2016 will be released on Friday. Through the first 10 months of the year, ag exports were at 107.7 billion, down about $1.73 billion from the same time in 2015. Imports were at about $95.1 billion so the U.S. had a positive agricultural trade balance of about $12.6 billion.

The top U.S. market for soybeans is China, accounting for 56% of soybean exports from January through October at about 22.5 million metric tons.

The top market for corn is Mexico at about 25% of corn exports with 11.76 million metric tons, beating out Japan, which imported 10.4 mmt of U.S. corn.

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