Foreign Policy Blogs

Robert Lighthizer on Trade with China

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Robert Lighthizer said President Donald Trump had picked him for the job “in part because of my enforcement background.” (Associated Press)

The new pick for U.S. trade representative (USTR), Robert Lighthizer, recently signaled the new administration’s get-tough approach to China over trade issues. Lighthizer is currently a trade lawyer for the law firm of Skadden, Arps, Slate, Meagher & Flom, and has represented U.S. industries, such as steel, who lobby for higher tariffs on Chinese imports. He previously served as deputy U.S. trade representative under president Ronald Reagan in the 1980s.

At a Senate confirmation hearing on Tuesday, Lighthizer did not stray far from the views of his president, vowing to crack down on unfair trade practices by China and suggesting the U.S. needs “imaginative” solutions and a “multi-faceted approach” on trade litigation. The USTR, was mandated in 1962 to “negotiate directly with foreign governments to create trade agreements, to resolve disputes, and to participate in global trade policy organizations.”

Lighthizer has suggested the World Trade Organization (WTO) is poorly-equipped to deal with “troubling” Chinese overproduction of steel and other exports, arguing, “I don’t believe that the WTO was set up to deal effectively for a country like China and their industrial policy.” 

He also penned an op-ed in the Washington Times in 2011 defending Trump’s criticism of Chinese trade, “How does allowing China to constantly rig trade in its favor advance the core conservative goal of making markets more efficient? Markets do not run better when manufacturing shifts to China largely because of the actions of its government. Nor do they become more efficient when Chinese companies are given special privileges in global markets, while American companies must struggle to compete with unfairly traded goods.”

Lighthizer is also on record declaring the trade deficit with China as “widely recognized as a major threat to our economy.” He has also come out strong against Chinese attempts to keep its exchange rate competitive by keeping the yuan artificially weak, arguing “In the past, it is my judgment that China was a substantial currency manipulator,” Lighthizer said. “Whether China is manipulating the currency right now is another question. That’s up to the Treasury secretary.”

Lighthizer is the latest among several Trump appointees who have argued for a tougher approach to Chinese trade. Peter Navarro, an economist and author of “Death by China” was recently selected to head the newly-formed White House National Trade Council.

With such vocal critics of Chinese trade emerging in the new administration, senior government officials in China are no doubt worried over how trade policy will play out. But some U.S. economists argue that a trade war started by the U.S. may in fact lead to higher prices for consumer goods, such as Americans now enjoy at Walmart, as high tariffs are added to the price of goods. Analysts at the investment firm of Goldman Sachs, whose alumni feature prominently in the Trump administration, also predict a trade war will lead to falling GDP growth in both countries, as well as those countries such as South Korea and Taiwan which are in the supply chain.
With so much heated rhetoric from both sides, finding a solution mutually acceptable to both Washington and Beijing is far from certain.

 

Author

Gary Sands
Gary Sands

Gary Sands is a Senior Analyst at Wikistrat, a crowdsourced consultancy, and a Director at Highway West Capital Advisors, a venture capital, project finance and political risk advisory. He has contributed a number of op-eds for Forbes, U.S. News and World Report, Newsweek, Washington Times, The Diplomat, The National Interest, International Policy Digest, Asia Times, EurasiaNet, Eurasia Review, Indo-Pacific Review, the South China Morning Post, and the Global Times. He was previously employed in lending and advisory roles at Shell Capital, ABB Structured Finance, and the U.S. Overseas Private Investment Corporation. He earned his Masters of Business Administration in International Business from the George Washington University in Washington, D.C. and a Bachelor of Science in Finance at the University of Connecticut in Storrs, Connecticut. He spent six years in Shanghai from 2006-2012, four years in Rio de Janeiro, and is currently based in Ho Chi Minh City, Vietnam. [email protected]

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