President-elect Donald Trump's transition team announced Tuesday that Robert Lighthizer has been nominated as the next U.S. trade representative. Lighthizer served as deputy trade representative under Reagan, and helped in that administration’s efforts to impose tariffs on low-cost Japanese imports. His views on Chinese competition are in line with those of other Trump nominees, and his appointment is an indication that the president-elect will make good on his promise to revisit trade agreements.
"[Lighthizer] has extensive experience striking agreements that protect some of the most important sectors of our economy, and has repeatedly fought in the private sector to prevent bad deals from hurting Americans,” Trump said in a statement to Bloomberg News. “He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.”
Over the past decade and a half, America's manufacturing base shed five million jobs while increasing output by about 20 percent, largely through automation. Trump alleges that outsourcing and "totally one-sided trade" with China hurts American workers, and the appointment of Lighthizer (along with noted China critics Peter Navarro and Wilbur Ross) would appear to address these concerns.
Trump's transition team has already discussed plans to institute tariffs of up to 5-10 percent through an executive order. In addition, Trump said in December that he would impose a tariff of 35 percent on goods sold back into the U.S. market by American manufacturers that outsourced production. However, new tariffs could lead to conflict with the traditional wing of Trump's party, and the House Republican leadership has already expressed concern that Trump’s proposals could lead to a trade war.
If the new administration does enact tariffs and U.S. imports fall, it could affect trans-Pacific container volumes and Chinese manufacturers’ demand for bulk commodities, with implications for vessel operators and ports.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.