Trump: Campaign pledges tested by exposure to political reality

By early February, the Trump administration was giving strong indications of its trade objectives, while the outside world was giving indications of the barriers he was likely to face.

Overall objectives.

At his inauguration, Trump summarised his task as “Buy American, Hire American”. His White House website now gives a specific target: 25 million new jobs, which over a  four-year presidency means half a million a month.

Pre-election pledges

Donald Trump promised in late October to do four trade-related things on his first day of office:

  • Announce NAFTA renegotiation. Announced, with no timetable or objectives
  • Announce America’s withdrawal from the TPP He’s withdrawn – from a deal that wouldn’t have been fully effective for apparel until 2027 at the earliest anyway.
  • Require China to be labelled a currency manipulator. He didn’t. The White House website has now dropped all mention of trade with China.
  • Require officials to identify foreign trade abuses. He didn’t.

The last two required officials on his team who, in fact, hadn’t been confirmed by the time of his inauguration.

To these four commitments, the Republican Party added  a fifth during the 2016 election

  • Border Taxes A tax reform that would slash America’s profit taxes, but disallow the cost of imports in calculating tax liability. This could make some apparel retailers loss-making.

Progress by early February

  • NAFTA renegotiation. On January 26, the independent Congressional Review Service issued its opinion on the legal positionof this renegotiation, saying any new or amended laws a renegotiation might require would likely need Congressional approval. This, of course, means any President would be foolish to start a treaty renegotiation without some certainty about what Congress was likely to endorse.

By February 2, Congressional Republicans had moved on to making a stronger claim. America’s Trade Promotion Act (TPA) sets out that the President must Congress give at least 90 days’ notice of trade negotiations and his specific renegotiation objectives. Trump appeared to agree, grumpily, with that restraint.

No notice has so far been given to Congress, and renegotiation cannot start until 90 days after notice has been filed. This is probably connected with the pending confirmation of Trump’s Secretary of Commerce.

  • China’s alleged currency manipulation. Trump’s Treasury nominee, Steven Mnuchin, has consistently avoided committing to Trump’s position – or to answering questions about the consequences of his apparent disagreement. Mnuchin seems as concerned about China as the rest of Trump’s team – but seems to think alleged currency manipulation is low on America’s list of grievances with China on trade.
  • Foreign trade abuses. Americans have hundreds of examples of foreign activities – from the state of foreign currencies to worker rights – someone will call an abuse undermining US job prospects. No-one has indicated any process for prioritising them, or working on their removal
  • Border Taxes. Trump has tweeted his discomfort at border taxes:, but later appeared to be warming to them. Republicans have indicated their belief Bills will go through both Houses of Congress nonetheless – though their proposed process looks likely to take a long time. Over a hundred US companies (including most apparel retailers and Walmart) have formed a lobbying group to oppose the idea.

There has been little opposition to Trump’s call to “buy American.” But there is little evidence either that Trump’s team have a serious programme for steering their anti-import plans through the thicket of competing interests even among those who essentially agree with them.  Trump urgently needs a complete team of Commerce Secretary, Secretary of the Treasury and US Trade Representative – and until they, colleagues elsewhere in government (such as the new Secretary of State)  and their support staff are up to speed, progress will be slow.

Immediate action clarifying the constraints apparel buyers and sellers will be working under looks unlikely


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