Trump could change trade stance, says former Bush adviser

Donald Trump

Donald Trump may make new US policy on trade more “nuanced” than his tough campaign pledges suggested, a former adviser to George W. Bush has said.

Mr Trump has vowed to renegotiate trade deals, including with China, to benefit the US.

But Pippa Malmgren told the BBC he may not be able to implement protectionist policies without damaging the US economy.

While campaigning, Mr Trump proposed heavy tariffs on Chinese goods.

He has said he wants China to reform trade relations with the US, and has floated the idea of a 45% tariff on Chinese imports if this does not happen.

But Ms Malmgren said: “Bottom line is, he wants America to be open for business, and he knows there are no votes in being ‘pro-trade’ on trade deals.

“But frankly, being pro-business is kind of the same thing, so it may be more of a rhetoric change, more nuanced.”

Port of Los AngelesImage copyrightGETTY IMAGES
Image captionChina, Canada and Mexico are very important trading partners for the US

China is the US’s top trading partner in goods, according to US government figures. In September 2016, China and the US had $416.3bn (£330bn) worth of trade between the two, which was 15.4% of total US trade for the month.

Canada and Mexico are also important US trading partners, with 15.1% and 14.5% of trade in September respectively.

By contrast, the UK was ranked at number seven, with $81.9bn worth of trade, or 3% of the total.

On the campaign trail Mr Trump vowed to target Nafta – the US trade pact with Canada and Mexico.

But he was particularly scathing about the trade relationship the US has with China, even though the US levies relatively high import duties on goods such as steel imports.

However, China has dismissed Mr Trump’s campaign pronouncements as posturing.

Shi Yaobin, China’s vice-minister of finance, told BBC economics editor Kamal Ahmed: “I think he said those words in order to boost his chances of being elected.

“Economic co-operation and exchanges have yielded tangible benefits. These benefits should be recognised by the president-elect.”

UK and China

The UK, by contrast, has made extensive efforts to encourage Chinese trade and investment.

On Thursday, Chancellor Philip Hammond welcomed a Chinese government delegation to the London Stock Exchange as part of a countdown for new deals for banking and house-building.

He said: “We believe that free trade and open markets are good for prosperity, good for the protection of jobs in this economy, but we do also recognise the concerns that there are around dumping and unfair practices.”

The UK’s Brexit vote found favour with Mr Trump’s trade adviser Dan DiMicco.

Before the US election, Mr DiMicco told the BBC: “They [the UK] are leaving the EU, in our estimation, for the right reasons. They’ve lost control of their economy, the job-creation engine, so why shouldn’t we be working with like-minded people?”

Can Trump afford it?

Philip Hammond has made it clear that Mr Trump has only been president-elect for a few days, and may need some time to consider his approach.

And Mr Trump may have a personal motivation for not implementing policies which may damage the US economy, according to Richard Painter, a professor at University of Minisota.

He told the BBC that Mr Trump has a personal interest in not bringing in protectionist trade policies or restrictions on US immigration.

Mr Trump has an extensive stable of more than 500 businesses, including glitzy hotels and casinos.

“His having a financial empire ironically could be what saves us from disaster,” Prof Painter said. “[Policies] that would destroy trade would destroy his businesses.”

He said Mr Trump’s campaign trail pronouncements should be taken with a pinch of salt, and were aimed at appealing to the US electorate.

[Source:- BBC]