The wheels are coming off Trump’s Trade Policy



Robert E. Scott|The Hill

U.S. Trade Representative Robert Lighthizer testified before Congress this week, reprising his recent claim that the era of U.S. offshoring is “over.” It’s essentially the same message as President Trump’s new “American Comeback” campaign ads, which tout industries and jobs returning to the U.S. But Trump’s trade policies are actually failing to curb most of this offshoring — and simply don’t address the root causes of America’s growing trade deficits. 

The reality is that COVID-19 has wiped out much of the job gains seen in recent years. Unless steps are taken now to curb dollar overvaluation, which is making imports artificially cheap in the U.S. market, and to curb tax incentives for offshoring, there won’t be a comeback.

Unfortunately, Trump has ignored the linkage between his policies and a rising trade deficit. And so, his administration continues its rosy pronouncements.

In his testimony, Lighthizer praised several companies that have scrapped offshoring efforts or have “announced” plans to move production to the U.S. He also praised both the U.S.-Mexico-Canada Trade Agreement (USMCA) – which takes effect July 1 – and the current “Phase One” China trade deal. 

he U.S. trade deficit is likely to shrink during COVID-19. But unless steps are taken to address dollar overvaluation and tax incentives for offshoring, these deficits will simply reemerge when recovery occurs. Washington must embark on major investments in infrastructure, R&D, training, renewable energy, and other industrial policies. Congress may also consider Rep. Peter DeFazio’s (D-Ore.) proposal to withdraw from the WTO — to help implement stricter Buy America requirements for infrastructure investment.  

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