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President-elect Donald Trump this week filled his lone remaining top trade post with yet another China hawk – much to the delight of trade reformers.
Trump on Tuesday tapped Robert Lighthizer as his choice for US trade representative. Lighthizer was the deputy US trade representative under President Ronald Reagan and has been a longtime critic of Chinese trade practices.
The soon-to-be chief US trade negotiator, Lighthizer worked to curb Japanese imports in the 1980s using threats of quotas and tariffs, similar to Trump’s threats against American companies looking to import products from China and Mexico. Lighthizer has spent decades as a lawyer representing US steelmakers and other companies in cases that led to a significant reduction in Chinese steel imports.
Lighthizer’s appointment joins him with two other prominent China hawks among Trump’s team of trade advisers. It signals “a return to the Reagan era of unilateral trade policy,” Sharyn O’Halloran, a political economics professor at Columbia University, told Business Insider in an email.
In 2010, Lighthizer wrote in testimony to Congress’s US-China Economic and Security Review Commission that the trade deficit between the US and China was at the point where it was “widely recognized as a major threat to our economy.”
Lighthizer joins Peter Navarro, an economic adviser to Trump’s campaign and a fellow outspoken China hawk. Trump tapped him to lead a newly formed White House National Trade Council.
Navarro has written books such as “Death by China” and “Crouching Tiger: What China’s Militarism Means for the World.” He too has advocated a more aggressive stance in what he has warned is an economic war with China.
In a release about Lighthizer’s appointment, the Trump transition team wrote that Lighthizer, Navarro, and the nominee for commerce secretary, Wilbur Ross – who went to war against Chinese steelmakers in the early 2000s but is not as hawkish as the other two – will work in “close coordination” on trade policy.
Of course, the get-tough-on-China message originates from the top, as Trump has accused China of “raping our country” and being at the head of the greatest “jobs theft” in history.
Trade reformers praised Trump’s latest move, with Michael Stumo, the CEO of the Coalition for a Prosperous America, calling Lighthizer and “excellent choice” to replace current US Trade Representative Michael Froman.
“He understands that international trade is a strategic game of conflicting national interests and a competition for good jobs and industries,” Stumo said in a statement. “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.
“We are confident that the combination of Lighthizer, Peter Navarro, and Wilbur Ross will be effective in working to balance trade, achieving net creation of good jobs, and growing a diverse manufacturing supply chains here.”
Lori Wallach, the director and founder of Public Citizen’s Global Trade Watch, also praised Lighthizer’s appointment.
“Lighthizer is very knowledgeable about both technical trade policy and the ways of Washington, but what sets him aside among high-level Republican trade experts is that for decades his views have been shaped by the pragmatic outcomes of trade agreements and policies rather than fealty to any particular ideology or theory,” she said in a statement.
- Reuters/Fred Dufour
Even Democratic Sen. Sherrod Brown of Ohio, one of the more liberal members of the legislative body and fellow trade-reform advocate, said he looked forward to hearing how Lighthizer would pull through on Trump’s trade agenda.
“President-elect Trump campaigned on the promise that he would rewrite US trade policy and create more manufacturing jobs,” he said in a statement. “I look forward to hearing from Mr. Lighthizer how he will accomplish these goals, including withdrawing from the Trans-Pacific Partnership, renegotiating NAFTA, and resetting the US-China trade relationship.”
The core combination of Lighthizer, Navarro, and Ross view trade as being a “zero-sum game about winners and losers,” said Joshua Meltzer, a senior fellow at the Brookings Institute.
He said it remains to be seen how the ideology plays out in governance, but added that he expects “a fairly aggressive trade policy coming out of the Trump administration, at least in the beginning.”
“Until, you know, some of the economic hardships can become clearer,” he said.
Meltzer said views in Beijing are mixed about how Trump and his top trade team would affect relations between the two countries – which, he added, is the case in many nations at the moment.
“I think on the one hand there’s been a view in Beijing for a while now that Trump’s a businessman who does deals and that this will open up opportunities to make progress in some areas that are important to Beijing,” he said. “That may not have been possible under a [Hillary] Clinton presidency. I think they see Trump as very transactional.”
But “at the same time now there is a growing appreciation that the Trump administration is going to present a whole range of challenges to China, from currency through to investment and market access and the like,” he continued. “So I think they are trying to assess how bad this is going to get, how far he’s willing to take this.”
And if Trump and his team were to deploy tariffs against countries like China, Meltzer said the retaliatory effect would be harmful on multiple fronts.
“Not alone because of the market access for US exporters, but simply because raising prices on a whole range of imports is going to be very costly for businesses and consumers,” he said. “The net effect for the US economy and global economy on that front is going to be negative.”