Knock on wood: Nearly 100 days into the Trump administration, the U.S. is NOT embroiled in trade wars with China, Japan and Mexico.
Had the president made good on some of his campaign promises, trade wars would be raging by now. We’d have lobbed protectionist volleys at trade partners and they’d be lobbing back. Instead, peace prevails--at least so far. It prevails because Trump has backed off those promises.
During the campaign, for example, Trump said he would declare China a currency manipulator on the first day of his presidency. He didn't, and now he says he won't because China isn't manipulating the yuan. In reality, China is propping the yuan UP--and was propping it up even during the presidential campaign.
A trade war with China could still erupt; serious negotiations have yet to begin. The president, though, is making conciliatory noises that are very much at odds with his harsh China-bashing campaign rhetoric.
Interviewed by The Wall Street Journal (http://tiny.cc/…), Trump said he has a "very good relationship" with Chinese president Xi Jinping. He said he told Xi he would accept a less good trade deal than he otherwise would have pressed for if China would "solve the North Korea problem." The administration is planning a 100-day "review" with China of the countries' trade relationship.
Two months earlier, after another Mar-a-Lago summit with an Asian leader, the president declared he had developed a "great friendship" with Prime Minister Shinzo Abe of Japan. Less than a year ago, Trump was blasting Japan with rhetoric that the New York Times said resembled "a trade tirade from the '80s.” (http://tiny.cc/…)
And Mexico? The president is still talking tough but he has already missed a self-imposed mid-March deadline to begin renegotiating the North American Free Trade Agreement. His latest word was a promise to a group of American executives that "We're going to have some very pleasant surprises for you on NAFTA."
Trump has kept one trade-policy campaign promise--withdrawing from the 12-nation Trans-Pacific Partnership trade deal. TPP would have significantly reduced Japanese barriers to American agricultural products. The challenge for Trump's trade team is to match or outdo those TPP liberalizations in bilateral talks with Japan.
On April 18 Vice President Mike Pence and Secretary of Commerce Wilbur Ross will meet with their counterparts in Tokyo. As initially conceived by the Japanese, it seems, these meetings were a "bilateral economic dialogue" focused on economic issues. The Japanese had not expected Ross, who has a reputation as a trade hawk, to be involved. His addition to the roster suggests a stiffening of the U.S. position--if nothing else, an insistence on putting tariff and non-tariff barriers on the agenda.
That the Trump administration hasn't yet led us into wars over trade does not mean it won't. Unpredictability has been the hallmark of the president's early days. He has proved himself more than capable of changing his mind, and changing it back again.
He could, for example, decide tomorrow to slam the door on imports of Mexican products. Mexico is loudly looking for alternative sources of corn in case it needs American products to block in retaliation. He could declare Japan or South Korea a currency manipulator. He could withdraw the U.S. from the World Trade Organization.
But he hasn’t yet done those things, and so all is relatively quiet on the trade front. Just as a dog that didn't bark was the decisive clue in a famous Sherlock Holmes story, the trade wars that haven't broken out are the most striking feature of Donald Trump's trade policy to date. Farmers and ranchers have to hope this will continue.
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