U.S. Trade Representative Robert Lighthizer said Wednesday that President Trump doesn’t believe current U.S. trade deals amount to a free trade system because they resulted in trade deficits, and said the administration will be focused on the enforcement of trade rules and boosting exports to solve that problem.
“Philosophically, I would say that the president believes in free trade. He doesn’t think that it exists right now. The question becomes, ‘What do you do to get there?'” Lighthizer told the House Ways and Means Committee. “I think his approach is to aggressively go after people that are engaging in unfair trade and hope that that leads to market efficiency, more economic freedom and, globally, more wealth.”
Lighthizer’s comments were meant to reframe the debate over trade by arguing that Trump’s proposed changes were not as radical as some people, including the president himself, have described. Economists generally do not believe that trade deficits are automatically a bad thing since they can be seen as consumers getting goods at lower prices, and can also be a sign of a thriving U.S. economy that needs more foreign inputs to keep humming.
But the trade representative repeatedly argued that the deficits the U.S. faced represented serious economic concerns.
Lighthizer focused on China in particular by saying that country does things “that are inconsistent with our values, with the way we think the economy should develop and work.” He cited China’s steel industry, which has 1.1 billion tons of steel capacity compared to the U.S.’s 100 million tons, arguing that the US had to expand its capacity.
When asked about Ford expanding auto production in China, the trade representative said, “I think it is early to say the president’s policies are responsible for what it is that Ford is doing, but I do think that it is something that we have to look at. I think we need to look at incentives. It was as troubling to me as it was to you.”
Lighthizer said he would try to do this without upsetting existing imports. Asked about potential retaliation from NAFTA countries regarding agriculture products, he agreed that was a concern, but said the administration was committed to “doing no harm” with other countries.
