US President Donald Trump would consider pulling out of the World Trade Organization if “they don’t shape up,” he told Bloomberg in an interview.
“If they don’t shape up, I would withdraw from the WTO,” Trump said on Thursday at the White House, before departing for a rally in Indiana.
Last month, the US president told reporters that the WTO has treated the US “very badly” for many years, and that the Geneva-based body will need to “change their ways.”
US Trade Representative Robert Lighthizer has called allowing China into the WTO a mistake and accused the trade body’s dispute settlement system of interfering with US sovereignty. The Trump administration has recently blocked the appointment of judges to the WTO’s appeals body.
On Wednesday, Washington filed a complaint with the WTO against Russia’s retaliatory tariffs, which were a response to Trump’s steel and aluminum duties imposed earlier this year.
In the wide-ranging interview, Trump also said he likes and respects Federal Reserve chairman Jerome Powell, despite publicly disagreeing with the Fed’s recent interest rate increases. The Fed has raised rates five times since Trump’s inauguration, and there is talk of two more increases this year.
— Jim Roberts (@nycjim) August 30, 2018
Trump said the Fed should be helping the government in trade disputes with China, the EU and others, just as their central banks are helping their governments.
“We are not being accommodated,” he said. “I don’t like that.”
Trump is also “thinking about” indexing capital gains to inflation, believes the EU proposal to eliminate auto tariffs is “not good enough,” and said he is not considering firing Attorney General Jeff Sessions – at least not until after the November midterm elections.
“I just would love to have him do a great job,” Trump said about Sessions., according to Bloomberg.
One of the most fundamental parts of Trump’s campaign for president was his promise to change America’s deeply flawed trade arrangements.
These deals left us with massive $500 billion trade deficits—a huge drag on the economy—and devastated forgotten communities across America that are dependent on manufacturing jobs.
Second only to the booming economy, Monday’s announcement of a deal with Mexico is the most visible manifestation of Trump’s fulfilment of his campaign promises. Last year, the USA had a large $71 billion trade in goods deficit with Mexico, owing in part to much lower worker pay. This new deal will limit Mexico’s ability to take U.S. manufacturing jobs by underpaying workers.
Another key part of the new trade deal increases the percentage of a car that must be made in North America to qualify for lower-tariff import into the USA. This will be a major boon to American automotive workers and that industry’s domestic supply chain.
Stocks skyrocketed as the United States and Mexico closed a new trade deal, potentially removing a source of uncertainty that had been plaguing investors for months.
The S&P 500 gained 0.8 percent to close at 2,896.74 — a record high — with materials and financials as the best-performing sectors. The Nasdaq Composite climbed 0.9 percent to an all-time high, breaking above 8,000 points for the first time, as Facebook, Amazon, Netflix and Alphabet rose. Tech’s gains led the Nasdaq to close at 8,017.90.
The Dow Jones Industrial Average rose 259.29 points to 26,049.64 as Caterpillar outperformed. Monday also marked the first time since Feb. 1 that the Dow closed above 26,000, CNBC reports.
More broadly, the deal vindicates Trump’s approach to trade, which has been lambasted by voices ranging from Wall Street to the national security establishment to the Chamber of Commerce, as well as mavens from both political parties.
They said nothing could come from Trump’s unilateral imposition of tariffs in order to get foreign governments to negotiate seriously. They said a “trade war” would be self-defeating.
On Monday, they have been proved wrong by an unmitigated victory for the USA, Fox News reports.
Trump understood the simple math that countries with which we have trade deficits would have to come to the negotiating table. By definition, we buy more from them than they buy from us, which gives us the power any major consumer has over a seller.
These countries also cannot afford to lose access to our $20 trillion economy—the world’s largest. Trump realized the power this gives us and decided to use it to level the playing field for American workers—unlike other recent presidents.
This victory will lead to others. The leftwing government of Canada, the other member of NAFTA, had refused to negotiate seriously, perhaps believing their friends in the progressive commentariat predicting Trump’s demise.
Canada’s foreign minister, Chrystia Freeland, spent most of her time on visits to the U.S. lobbying governors and congressmen rather than talking seriously to our trade negotiators. Her boss, Prime Minister Justin Trudeau, even though it was a good idea to antagonize Trump at his failed G7 summit in June.
Canada must now return, hat in hand, for a deal. If not, Trump will advance the deal with Mexico and leave Canada behind. Today he again vowed to raise car tariffs on Canada if it refuses to revise unfair levies of nearly 300 percent on some American goods, among other unfair practices.
The European Union and China will also be greatly concerned about the Mexico deal—and more likely to negotiate seriously.
Europe last year had a $151 billion surplus with the USA. When combined with the fact that we pay for most of their defense through NATO, Europe has benefited greatly from past U.S. administrations’ willingness to let Europe leach off of American workers and taxpayers.
James E Windsor, Overpasses News Desk
August 30th, 2018