Marianne Schneider-Petsinger
Geoeconomics Fellow, US and the Americas Programme
But is a fallout between Donald Trump and the new commerce secretary inevitable?
Wilbur Ross at Trump Tower in November 2016. Photo: Getty Images.Wilbur Ross at Trump Tower in November 2016. Photo: Getty Images.

Now that Wilbur Ross has been confirmed as the US commerce secretary, he will likely emerge as the most important player on Donald Trump’s trade team.

Peter Navarro, director of the newly formed National Trade Council, had held the reins until now because he did not require Senate confirmation. But going forward, Navarro’s influence will likely be weaker, since the National Trade Council is still a novel entity and will not have the same resources available as the Commerce Department. Similarly, the Office of the US Trade Representative, which was regarded as the main trade architect and trade negotiator under Barack Obama, is likely to be overshadowed. No date has been set for a confirmation hearing for Trump’s nominee for US trade representative, Robert Lighthizer. And the president has already said that the commerce secretary would play a larger role on trade matters compared to previous secretaries.

US trade policy has always been made by a wide range of agencies, and the Trump administration has further added to the organizational complexity. This raises the potential for infighting, even though Trump’s trade team is mostly cut from the same cloth – with Ross, Lighthizer and Navarro viewing trade deficits with great suspicion, holding protectionist attitudes and sharing a critical view of China’s trade practices. But redundancies and competing policy processes might lead to rivalries.

The role of the National Trade Council, to ‘advise the president on innovative strategies in trade negotiations [and] coordinate with other agencies’, is very similar to some aspects of the responsibilities held by the Office of the US Trade Representative. Trump has also shown a tendency to try to centralize power in the West Wing – his son-in-law and senior adviser, Jared Kushner, and his new special representative for international negotiations, Jason Greenblatt, are likely to both weigh in on trade policy as well.

Congress, which according to the US Constitution has the power to regulate trade, might also become mired in these turf battles. Both congressional entities with jurisdiction on trade policy, the House Ways and Means Committee and the Senate Finance Committee, are used to having the US trade representative report to them. The commerce secretary, however, is accountable to different committees, which could spark a fight within Congress. There is also the open question of whether traditionally pro-free trade Congressional Republicans (such as House Speaker Paul Ryan) will go along with many of the Trump administration’s policy proposals for trade.

But ultimately, Ross will rise and fall on how much he sees eye-to-eye with the president.

During his confirmation hearing, Ross described himself as ‘not anti-trade’ but ‘pro sensible trade’. As part of this approach, and in line with Trump’s campaign promises on NAFTA, renegotiating the US free trade agreement with Mexico and Canada will be ‘the first thing’ to address. On China, Ross and Trump share the view that the US must confront the country on unfair trade practices. As commerce secretary, Ross will play a key role in cracking down on China’s alleged unfair trade practices – particularly in the steel sector, to which he has strong ties. During his Senate testimony, Ross indicated that under him, the Department of Commerce would self-initiate so-called anti-dumping and countervailing duty investigations more frequently – instead of mostly relying on businesses to file a petition first.

There is, however, one issue where Trump and Ross might find themselves opposed. While Trump has threatened to impose tariffs of up to 35% and 45% on Mexico and China respectively, Ross believes that stimulating exports is more important than curtailing imports to stimulate economic growth. According to Ross, the best way to address the US trade deficit is through increased exports, and thus ‘the number one objective will be expanding our exports’.

But this strategy of promoting exports instead of imposing across-the-board tariffs on imports  stands at odds with Trump’s rhetoric thus far. Ross may be able to persuade the president to reverse his stance – or Ross may be willing to cave on this particular issue. But if not – and with so many competing for influence – his leadership of US trade policy could evaporate quickly.

This article was also published on Real Clear World.

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