President Donald Trump’s trade pick promised to get tough on China just as Beijing warned that a trade war is not in the interests of either side.
Robert Lighthizer, the president’s choice for U.S. trade representative, said Tuesday at a Senate confirmation hearing that he supports an “America first trade policy” and will use a “multi-faceted approach” to crack down on China’s unfair trade practices, reports the Financial Times.
“If you look at our problems, China is right up there,” he said.
“We have to start thinking about some new remedies,” Lighthizer argued. “We have to think of more systemic approaches. Some of that may be going to the [World Trade Organization].”
Trump’s trade policy, however, appears to put little emphasis on the role of the WTO. Instead, Trump, unlike his predecessor, is likely to rely on American trade laws to punish troublesome trade partners.
“I don’t believe the WTO is set up to deal effectively with a country like China,” Lighthizer explained. He further commented that America needs to be “better in negotiating our trade agreements and stronger in enforcing our trade laws.”
“Derogation may be the only way to force change in the system, to prompt China to truly live up to the letter and the spirit of its WTO obligations, and to put in place a sustainable and mutually-beneficial trade relationship,” Lighthizer said in a 2010 testimony for a congressional commission.
During Tuesday’s hearing, he argued the U.S. should consider dismissing its WTO obligations when it comes to dealing with China’s unfair practices, which he believes harm U.S. companies.
Lighthizer has long argued against free trade, asserting that it offers rivals the opportunity to take advantage of the U.S.”Modern free traders … embrace unbridled free trade, even as it helps China become a superpower,” he wrote in The New York Times several years ago. “They see nothing but dogma – no matter how many jobs are lost, how high the trade deficit rises or how low the dollar falls.”
Trump has said numerous times that he wants fair trade, not free trade. For this reason, he withdrew from the Trans-Pacific Partnership and called for a renegotiation of NAFTA.
“I believe he’s going to change the paradigm on China,” Lighthizer said of the president during the confirmation hearing.
China is concerned that the U.S. intends to start a trade war.
Speaking to reporters at a press conference Wednesday, Chinese Premier Li Keqiang said China is uninterested in a trade war with the U.S., for a conflict would be highly detrimental for both sides.
“We don’t want to see a trade war,” Li said, arguing, “That will not make trade fairer.”
“This relationship is crucial not just for China and the U.S. but also for regional and global peace and security,” he explained. Li said that bilateral economic exchanges and Chinese investment in the U.S. created 1 million American jobs last year.
Despite his positive comments on the relationship, the premier asserted that if a trade war were to break out, foreign companies would suffer the most.
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