image

Trade

China blamed for US job losses at trade deficit hearing

Dan DiMicco, who was passed over by US President Donald Trump for the US trade representative post, said he was ‘not at all’ satisfied with the US-China trade relationship

PUBLISHED : Friday, 19 May, 2017, 10:00am
UPDATED : Friday, 19 May, 2017, 11:20pm

China’s lower labour and production costs were blamed for causing American job losses at a US Commerce Department hearing on factors contributing to the US’s approximately $750 billion annual trade deficit.

Dan DiMicco, a former chairman of top US steel producer Nucor Corp., who was passed over by US President Donald Trump for the US trade representative post, said on the sidelines of the hearing he was “not at all” satisfied with the results of the US-China trade relationship.

DiMicco said the US “gave away” trade benefits to China, and the American manufacturing sector “got nothing”. DiMicco lost his bid to be Trump’s top trade negotiator to Robert Lighthizer, a former trade official in the Reagan administration.

DiMicco added he thought Trump still could label China as a currency manipulator, even though Trump has said his administration would not do so. “We hope he will change his mind,” DiMicco said.

Trump said in April the reason he had changed his mind on one of his signature campaign promises was that China hadn’t been manipulating its currency for months and he didn’t want to put his talks with Beijing on confronting North Korea’s nuclear threat into jeopardy.

US Commerce Secretary Wilbur Ross told the hearing that US trade with China accounted for nearly half the trade deficit last year. Combined trade with Japan, Germany and Mexico represented a quarter of the total.

“The last time the US had a trade surplus was in 1975,” Secretary Ross said.

The eight-hour hearing was designed to collect public input on factors contributing to the US trade deficit, which will be used to inform a report that must be submitted to the president by June 30.

From his first day in office, Trump has made reversing the US trade deficit one of his priorities. Trump signed an executive order in late March demanding a clear explanation of the causes of the trade deficit as a reference for formulating action against trading partners such as Japan, Germany and China. The causes to be explained could include trade barriers, currency issues, subsidies, regulations, dumping and tariffs and other import restrictions.

Can Washington narrow its trade deficit with Beijing in 100 days?

The Trump administration, however, has been holding off on starting a trade war with China in lieu of reaching a bilateral agreement allowing more American exports and market access into the world’s second largest economy.

The US and China last Friday released the first results from their so-called “100-day plan” announced during the April meeting between Trump and Chinese President Xi Jinping. China agreed to allow in US beef, natural gas and certain financial services by mid-July when the two sides are scheduled to hammer out a final deal during negotiations in Washington.

At least another two meetings have been planned before mid-July, a source with knowledge of the ongoing negotiations told the Post.

An official from the US trade representative’s office asked DiMicco during the hearing about the differences between the US, Japan and Germany on trade deficits. In 2016, Japan announced its first trade surplus in six years and Germany’s surplus reached a new high.

DiMicco said Japan and Germany were “true protectionists” who “use currency manipulation, either direct or indirect”.

White House tells Congress it will renegotiate Nafta treaty to shake up US$1.2 trillion in annual trade

The hearing on the trade deficit came as the Trump administration started a countdown to renegotiating the North American Free Trade Agreement with Canada and Mexico to win better terms for US workers and manufacturers. US Trade Representative Robert Lighthizer said he triggered a 90-day consultation period with Congress, industries and the American public that would allow talks over one of the world’s biggest trading blocs to begin by August 16. Renegotiation of the trade pact was a key Trump campaign promise.