Wilbur Ross Is in the Driver's Seat on U.S. Trade Policy -- For Now
This piece was created in collaboration with Chatham House. Marianne Schneider-Petsinger is the U.S. geoeconomics fellow at Chatham House's U.S. and the Americas Programme. The views expressed are the author's own.
Now that Wilbur Ross has been confirmed as U.S. commerce secretary, he will likely emerge as the most important player on President Donald Trump’s trade team.
Peter Navarro, director of the newly formed National Trade Council, has held the reins until now, because he did not require confirmation by the U.S. Senate to take up his position. Moving forward, however, 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 to the Department of Commerce. The Office of the U.S. Trade Representative, which was regarded as the main trade architect and negotiator under former President Barack Obama, will probably be overshadowed as well. There is no date set yet for a confirmation hearing for Robert Lighthizer, Trump’s nominee for U.S. trade representative. And the president has already said that his commerce secretary would play a larger role on trade matters compared to previous secretaries.
U.S. trade policy has always been shaped by a wide range of agencies, and the Trump administration has further added to the organizational complexity. This raises the potential for infighting. 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," involves responsibilities similar to those held by the Office of the U.S. Trade Representative. Trump has also shown a tendency to try to centralize power in the West Wing. Trump’s son-in-law and senior adviser, Jared Kushner, and his new special representative for international negotiations, Jason Greenblatt, are likely to weigh in on trade policy as well.
Congress, which according to the U.S. 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 U.S. trade representative report to them. The commerce secretary, however, is accountable to different committees, which could spark a fight in 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 trade policy proposals.
But ultimately, Ross will rise and fall based 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 U.S. free trade agreement with Mexico and Canada will be the first thing Ross plans to address. On China, Ross and Trump share the view that the United States must confront Beijing on trade. 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 Ross 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 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 percent and 45 percent on Mexico and China respectively, Ross believes that stimulating exports is more important to spurring economic growth than is curtailing imports. According to Ross, the best way to address the U.S. 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 he may be willing to cave on this particular issue. But if not -- and with so many others competing for influence -- his leadership of U.S. trade policy could evaporate quickly.