Wilbur Ross One key member of Donald Trump’s economic team is cruising toward confirmation.
Trump’s nominee to be Secretary of Commerce, enjoyed a chummy confirmation hearing with the Senate Commerce Committee.
Trump has characterized Ross as his point man on trade, which puts much of Trump’s agenda on Ross’s shoulders. Trump campaigned heavily on promises to remake trade deals with countries such as China and Mexico, to make them more fair to American workers. During his confirmation hearing, Ross gave some important clues about how this is unlikely to unfold. Highlights.
Mexico will come first. Trump has promised to renegotiate the North American Free Trade Agreement, the 25-year-old pact that has led to booming growth in the Mexican manufacturing of automobiles and other products imported to the United States.
China is “raping our country” and “eating our lunch.” Instead, Ross demonstrated detailed knowledge of the Chinese economy and policies meant to give it a leg up, such as unprofitable “state-owned enterprises” that flood global markets with underpriced products such as steel and aluminum, undercutting US and European producers.
“China is the most protectionist country of very large countries,” Ross said. “They have very high tariff barriers and very large non-tariff trade barriers to commerce. They talk much more about free trade than they actually practice.”
Tariffs may turn out to be more of a threat than anything real. Ross is no fan of tariffs, which raise the price of imported goods and stoke inflation, which harms ordinary consumers. “
Tax cuts and deregulation will be a key part of trade policy. Trump wants to slash the US corporate tax rate, making it more competitive with rates in other developed countries. And he has big plans to reel in the federal red tape American businesses must contend with. This could boost hiring at American companies, by freeing up capital, but it could also lure more foreign companies that would then hire people here. “If we lower the corporate tax rate, it will be a further inducement for them to come,” Ross said. “Some degree of deregulation will also be very, very helpful.” China and Mexico, please come to America.
Boosting exports will be the first order of business. Ross believes that boosting US exports—without resorting to tariffs—is the best way to reduce the US trade deficit and create more US manufacturing jobs. This is tricky when the dollar is strong, as it is now, since American-made goods become more expensive overseas. But this is likely to be a key fulcrum of trade policy under Trump.