U.S. Trade Representative Robert Lighthizer told senators on Thursday that “hopefully, we are in the finishing stages” of negotiating the new NAFTA. At the same time, he said that Japan is balking at writing a trade agreement with the United States, and that the administration, despite intentions of speedy action, has yet to start talks with other Pacific Rim nations as an alternative to the abandoned Trans-Pacific Partnership (TPP) trade pact.
As for the U.S.-China war of tariffs, “The reality is, it’s going to take time,” Lighthizer replied when New Hampshire Sen. Jeanne Shaheen asked when to expect victory. The White House hit China with two rounds of tariffs to protect the U.S. steel and aluminum industry and as punishment for piracy of intellectual property. China retaliated with duties on U.S. products.
“A lot of people across the economy are being affected,” acknowledged Lighthizer. The administration offered aid of up to $12 billion to the farm sector because it was heavily targeted by China. He told Shaheen that an aid package for small businesses was not planned. “Not at this time, no,” he said.
During a Senate Appropriations subcommittee hearing, senators from New England and Alaska said fisheries deserved consideration as “farmers of the sea.”
Subcommittee chairman Jerry Moran of Kansas said that $361 million worth of exports from his state, a leader in wheat and aircraft, were jeopardized by various tariffs. The Trump tariffs “appear to have gotten China’s attention. More tariffs cannot be the ultimate answer,” said Moran.
Lighthizer described President Trump’s trade policy of confrontation, backed by tariffs, as a vigorous response to lopsided trade relations that would improve U.S. standing in the world and bring prosperity at home. “You’ve got to do it globally,” he told Rhode Island Sen. Jack Reed, who asked why Canada was hit with tariffs if the U.S. target was China. Hawaii Sen. Brian Schatz said the administration risked the long-term loss of export markets with its use of tariffs. “We are doing it badly right now. That’s what’s going on.”
During a visit to Iowa, Trump said negotiators were “getting close on that [NAFTA].”
When he took office, Trump pulled the United States out of the TPP and declared an era of bilateral trade negotiations, in which, he said, the United States, as the world’s largest economy, would have the upper hand. “That process was delayed,” said Lighthizer, as the administration slowly built up its trade staff. The trade representative’s office is selecting countries in East Asia and sub-Saharan Africa for bilateral negotiations that would serve as a model for other pacts in the region. The Philippines is the likely partner in Asia, he said.
Japan signed a free-trade agreement with the European Union in mid-July and was also part of a successor agreement to the TPP earlier this year. Lighthizer said he expected a U.S.-Japan meeting in the next 30 days. At the moment, Japan’s position is that it is not ready for another trade agreement, but Lighthizer said he was hopeful about persuading Japan to consider a comprehensive pact.
To watch a video of the hearing or to read Lighthizer’s written statement, click here.