Trump orders target trade abuses and evasion of import duties

© Reuters. US President Donald Trump reacts during a trade executive order signing ceremony in the Oval Office of the White House in Washington, USA.

By David Lawder

WASHINGTON (Reuters) – US President Donald Trump tried to get his quest for fair trade and more manufacturing jobs back at the top of his agenda on Friday by ordering a study on the causes of the trade deficit. of the United States and the repression of the evasion of import tariffs.

The executive orders came a week after Trump’s promise to replace Obamacare imploded in Congress and a week before he meets with Chinese President Xi Jinping in Florida, a summit that promises to be rife with trade tensions.

Trump said at a signing ceremony at the White House that he and Xi “were going to take care of some serious business” next week and promised that “the theft of American prosperity” by foreign countries would end.

One of the orders directed the Department of Commerce and the US trade representative to conduct a 90-day review of the causes of massive US trade deficits. It will study the effects of abuses such as dumping of products below of costs, unfair subsidies, “misaligned” currencies and “non-reciprocal” trade practices of other countries.

“We are going to investigate all business abuses and, based on those findings, we will take the necessary and legal steps to end those many abuses,” Trump said, adding that he was not in debt to any business.

Trump administration officials have said they plan to stricter enforcement of U.S. trade redress laws and will initiate more unilateral trade deals. In his 2016 White House bid, the New York businessman campaigned strongly against free trade agreements and accused China of cutting jobs from American industrial cities with cheap exports.

Chinese Vice Foreign Minister Zheng Zeguang said on Friday that the trade imbalance between the United States and China is mainly due to differences in the economic structures of the two countries, noting that China has a trade deficit in services.

“China is not deliberately seeking a trade surplus. Nor do we intend to conduct a competitive currency devaluation to stimulate exports.” Zheng told a briefing about the Xi-Trump meeting.

The trade abuse study appeared to be aimed at justifying U.S. unilateral retaliatory trade actions, said Matt Gold, a former deputy U.S. trade representative who is now an associate professor of trade law at Fordham University in New York.

“They probably think it will give them better political ammunition,” Gold said.

But he added that he would probably not reveal anything that is not already on the Office of the U.S. Trade Representative’s annual list of trade barriers, which was also released on Friday. The report criticized China’s industrial overcapacity and cybersecurity and technology transfer requirements, which it said are aimed at crowding out foreign products with domestic versions.

The study on trade abuses will focus on countries that have chronic trade surpluses in goods with the United States.

China tops the list, with a surplus of $ 347 billion last year, followed by Japan, with a surplus of $ 69 billion, Germany with $ 65 billion, Mexico with $ 63 billion, Ireland with $ 36 billion. and Vietnam with $ 32 billion.

The study will also examine past trade deals that have not produced anticipated benefits for the United States, as well as World Trade Organization rules that, according to U.S. Secretary of Commerce Wilbur Ross, do not treat countries for same, as in taxes.

The United States has long complained that WTO rules allow exports from other countries to be exempt from value added tax (VAT), but do not allow equivalent corporate income tax benefits to US exporters. .

The Trump administration is considering a border tax that would apply to imports and that would aim to put the United States on a trade tax base similar to that of countries that have VAT.

The second trade order will combat the non-payment and insufficient collection of the anti-dumping and anti-subsidy duties that the United States imposes on many foreign products.

The director of the White House National Council of Commerce, Peter Navarro, said that between 2001 and the end of 2016, about $ 2.8 billion in such rights were not collected from companies in about 40 countries.

Navarro said the order directs the Commerce and Homeland Security departments to close these gaps by imposing stricter bonding requirements to ensure tax collection and new legal requirements to assess risks associated with importers.