Trade war, day 105: Trump looks for deals with Vietnam and Philippines


Over a year and a half ago, Donald Trump pulled the U.S. out of the Trans-Pacific Partnership, a 12-nation multilateral deal with many countries in China’s neighborhood that was specifically designed, in part, to provide an alternative market to China. The Trump administration promised an energetic bilateral approach to dealmaking instead, but for months and months, no news about bilateral trade deals being made across the Pacific emerged.

Now, quite belatedly, the bilateral outreach to at least one former TPP country, and potentially other Pacific countries, may be finally beginning. The New York Times says (porous paywall) that after “The White House gave formal notification to Congress this week that it would begin trade talks with Japan, the European Union and the United Kingdom,” it also “has its sights on free trade agreements with the Philippines and Vietnam, as part of its effort to fence in China with agreements in its backyard.”

The Philippines was “excluded from the Obama-era Trans-Pacific Partnership because its high tariffs and other trade barriers,” but Vietnam was party to the trade talks.

In other trade news, “China, the European Union, Russia and Norway joined ‘several other’ countries in asking the World Trade Organization to investigate the Trump administration’s decision to impose tariffs on metal imports,” Bloomberg reports (porous paywall). The reporter at Bloomberg who filed this story, Bryce Baschuk, explains its significance in a Twitter thread — a few excerpts:

This will be a watershed moment for the WTO dispute system

If the @WTO dispute settlement body determines that @realDonaldTrump’s national security tariffs aren’t permitted under the GATT’s Article 21 national security exemption it could force Trump to roll back a key tool in his “America First” trade arsenal.

Conversely, if the @wto agrees with the U.S. argument that the measures are exempt from WTO rules, it could encourage @realDonaldTrump to impose national security tariffs on cars & spur a proliferation of other trade restrictions authorized under the guise of national security.

More trade war news:

“While President Trump has threatened to label China a currency manipulator, the laws governing the report require countries to meet three thresholds to receive the designation: persistently intervening in currency markets; running a significant trade surplus with the U.S.; and running a large current-account surplus overall. No country currently meets all three criteria. China, for example, runs a modest overall trade surplus, even though it runs a large one with the U.S.”

Previously in SupChina’s trade war coverage:

Trade war, day 104: Talks on ‘hiatus’