![\"Image](\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2017\/04\/3673922879_dd765d15a1_z.jpg\")
<\/p>\n<\/p>\n
When I was ambassador to the United States, I used to say that Australia was allied to the US\u2014minus one building in Washington. That building housed the\u00a0United States Trade Representative<\/a>\u00a0(USTR). Along with the Department of Commerce and the relevant section of the National Security Council, USTR runs US trade policy. The building was once the headquarters of the\u00a0Grand Army of the Republic<\/a>, a veterans\u2019 lobby organisation formed in 1866 after the American Civil War.<\/p>\n That spirit of a hard war still haunts the current occupants. Their concern for the American interest overshadows those of friends and enemies. \u2018Win\u2013win\u2019 outcomes are slow to emerge and any retreat is glacial. DFAT sends hardened officers to staff our trade policy branch, but they bond with USTR staff in their adversarial relationship. Staff farewells with their American counterparts are tearful, sometimes fraught. My last social function with USTR had a winter frost around it as they thought we had forced a TPP package on them.<\/p>\n That\u2019s a long way of saying that Trump, despite being the least prepared president in living memory, has tools to hand in the form of his departmental public servants as he prepares for hard bargaining with Xi Jinping. Last week USTR broke out the ammunition in its annual\u00a0trade barriers report<\/a>. For fair trade advocates, it\u2019s a table of grievances. In recent years, it has informed speeches more than policies, though it has produced occasional hard anti-dumping measures.<\/p>\n This year the timing is impeccable for Trump, and it accompanied two presidential executive orders on trade issues, including the ordering of a new report on the cause of America\u2019s trade deficits. Hilariously, Trump\u00a0walked out of the signing ceremony<\/a>\u00a0in high dudgeon, pursued by his vice president waving the unsigned documents, after a press question. This year\u2019s USTR report has a sharp focus on China for its catalogue of most notable offences. They cover alleged excess steel and aluminium production capacity, excess restrictions through its cybersecurity regime, forced technology transfers, online piracy, delayed approvals for agricultural biotechnology products, continuing bans on US beef imports, and obstacles facing US providers of electronic payment services.<\/p>\n Peter Navarro, head of Trump\u2019s newly created National Trade Council, claimed Trump\u2019s latest executive orders weren\u2019t directed squarely at China, but rather were \u2018a story about trade abuses<\/a>\u2019. Indeed, the focus was on uncollected anti-dumping duties of $2.8 billion since 2001 and measures to improve collection. Further, the US trade argument to this point has produced the most spectacular clash with Germany, rather than China. Germany is the real competitor of the US in high-end manufacturing. US trade officials could point to Germany, Japan and Mexico as similar targets to China. \u2018You have to think about it this way: we are in a trade war \u2026 have been for decades\u2019, Commerce Secretary Wilbur Ross\u00a0said on CNBC\u2019s Squawk Box<\/em><\/a>\u00a0last week.<\/p>\n On a recent visit to DC, I was asked by an official in the Executive Office Building what I thought of \u2018the policy\u2019. My response was that I couldn\u2019t discern a policy. There were \u2018attitudes and reactions\u2019 and that dynamic might produce a policy. In trade policy, that process is now evident. Spokesmen like Navarro were at pains to point out the careful deliberation being put into developing the framework of the Trump executive orders. The National Security Council is learning from the experience of the failed immigration executive orders. Policy will be hardened 90 days from now, as the trade study is completed.<\/p>\n Accompanying Navarro\u2019s broadening of the pain in the USTR report was Secretary of State Rex Tillerson\u2019s\u00a0extraordinary assurances in Beijing<\/a>\u00a0that Washington would be guided by the Chinese formula of \u2018nonconflict, nonconfrontation, mutual respect and win\u2013win cooperation\u2019. The Chinese shouldn\u2019t be fooled: Trump will come after the trade balance very hard with a reciprocity formula. Mercantilist Xi meet Nationalist Trump.<\/p>\n Trump will be looking for early steps to redress the trade imbalance\u2014the merchandise trade deficit with China was\u00a0close to $350 billion last year<\/a>. Autos are a poster child for Trump. China levies a 27% tariff on US-origin vehicles and limits investment ownership in production plants in China to no more than 50%. That will not persist. The range of offences identified in the USTR report will be canvassed. Along with trade, US anger at what it sees as weak Chinese efforts in preventing North Korea\u2019s nuclear developments will form the nub of the\u00a0conversation in Mar-a-Lago<\/a>\u00a0this week. But US hardness will be checked by Trump\u2019s desire to establish a personal relationship with Xi and the sense that trade policy is evolving.<\/p>\n On trade, Trump doesn\u2019t lead a united Republican front. Kevin Brady, chairman of the powerful House Ways and Means Committee,\u00a0criticised notions<\/a>\u00a0that the US trade picture was solely dominated by bad trading behaviour by partners, observing that \u2018in fact our trade agreements have been successful in making it easier to sell \u201dMade in America\u201d products and services, lowering and even eliminating our trade deficits in manufacturing and services and frequently resulting in a trade surplus\u2019. The Republican congressional delegation, including the far right\u00a0Freedom Caucus<\/a>, is overwhelmingly pro-free trade. Attitudinally, Trump is their polar opposite.<\/p>\n Trade policy isn\u2019t an area in which a quiet adjustment to current practice will evolve. Detail and knowledge will aid the development of a disruptive agenda. Regardless of whether there are fireworks at the Trump compound, the Chinese will have laid before them a determination to rebalance the stark bilateral trade deficit. Being well aware of that, Xi will bring a package. It will barely foreshadow a start on this road.<\/p>\n","protected":false},"excerpt":{"rendered":" When I was ambassador to the United States, I used to say that Australia was allied to the US\u2014minus one building in Washington. That building housed the\u00a0United States Trade Representative\u00a0(USTR). Along with the Department of …<\/p>\n","protected":false},"author":481,"featured_media":31208,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[1056,1428,365,31],"class_list":["post-31207","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bilateral-relations","tag-donald-trump","tag-trade","tag-united-states"],"acf":[],"yoast_head":"\n