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How to Fix Trump’s Business Mistakes: R. Ponnuru

(Bloomberg) – Governments around the world will turn to Katherine Tai, nominated by President-elect Joe Biden, to be the United States trade representative, to gauge the magnitude of the break that the next Administration plans to make with the current one The president of the United States, Donald Trump himself, abandoned eight decades of American politics by failing to consider liberalized trade as a goal. He and his trade representative, Robert Lighthizer, were more willing to implement tariffs and the threat of tariffs than their predecessors, and were eager to undermine multilateral institutions such as the World Trade Organization. Yet these methods did not deliver the promised benefits. The trade deficit that Trump criticized is as large as when he took office. The resurgence of employment in the manufacturing sector had stalled even before COVID-19, in part because Trump’s tariffs and the retaliation that inspired them have at times hurt manufacturers. Canada and Mexico agreed to regional protectionism for the auto industry. that Trump and Lighthizer wanted, but that is projected to come at a cost to American jobs. The administration managed to get China to agree to buy American goods, but not, so far, to actually make the purchases. Biden has a mixed track record when it comes to trade. But the poor results of Trump’s approach and growing popular support for trade should encourage him and Tai, who has served as the House Ways and Means Senior Trade Adviser, to change course. There is no shortage of ways to improve US trade policy Here are seven: Using the World Trade Organization to pursue US interests instead of blocking appointments to the WTO and threatening to leave due to vague complaints And invented, the new Administration should use it to break down barriers to US exports. That means filing more cases, especially against abuses from China. It should also mean supporting reforms in the body, such as speeding up its dispute resolution process Lowering tariffs on US allies One of the mistakes of the Trump administration was imposing tariffs on steel and aluminum in Europe, Japan and many other countries, supposedly in the name of national security, but really it was because some companies wanted it that way. Tariffs on solar panels and washing machines affect American allies and consumers alike. An effective strategy to counter Chinese mercantilism will require coordination with allies, and dropping these tariffs would encourage you to sign new trade agreements. Abandoning the Trans-Pacific Economic Cooperation Agreement was an early mistake by Trump, whose Administration spent years trying to recreate some of its benefits, inserting some of its provisions into the new version of the North American Free Trade Agreement and exploring the creation of a economic alliance with Asian countries. Ideally, the Biden Administration will reverse that mistake and also renew work on a transatlantic trade pact, strengthening supply chains. The government has a role to play in ensuring that the country has access to the products, services, and inputs it needs. However, especially since COVID-19 struck, the Trump Administration has used this concern as a reason for protectionism, which in itself can make supply chains less secure. Lighthizer condemned US companies for building global supply chains. supply in a leming-like ‘desire for’ efficiency ‘, ”ignoring the fact that companies also have an incentive to seek resilience. A more strategic approach would be to identify vulnerabilities and then consider multiple solutions, which may include tariffs and subsidies, but may also simply require reservations and reach agreements with allies. Remove tariffs on intermediate and capital goods. A high proportion of US tariffs are applied to products that US companies use to make their own products. (That includes the steel and aluminum tariffs mentioned above.) A common justification for trade restrictions, which may harm consumers but benefit employers, cannot justify most of them. However, US law sometimes prohibits the International Trade Commission from considering how tariffs can harm domestic companies before imposing them. Biden and Tai should pressure Congress to change the law, reduce presidential power to increase tariffs. Trump abused the power Congress gives presidents to increase tariffs for national security reasons. Congress should reduce the authority of the president so that more than one person must authorize new taxes and any new trade conflicts with other countries Reduce uncertainty. Some economists have estimated that the unpredictability of Trump’s tariffs cost the world economy hundreds of billions of dollars. The Biden Administration may carry out its trade policy in a less haphazard way, for example by announcing clear targets and using tariffs as a last resort. Tai and Biden will not be able to match the bombast of Trump and Lighthizer and should not even try. Compiling a better log should, on the other hand, be doable.Original Note: Seven Easy Ways to Fix Trump’s Trade Blunders: Ramesh PonnuruFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source © 2020 Bloomberg LP

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