By Chris Adams
President Donald Trump has said that trade wars are “good” and “easy to win.”
But what does that exactly mean?
The process for limiting imports coming onto U.S. shores is complicated, time-consuming and baked into U.S. laws and international agreements. But understanding how it works is key to understanding how goods that will be sold in the U.S. are impacted.
In a National Press Foundation session, Scott Paul, president of the Alliance for American Manufacturing, gave an overview on the nation’s complicated trade enforcement processes, and the ways American companies and the government itself seek relief from low-priced imports.
When companies ship their goods to the United States, it’s possible they might have gotten some unfair help. They might be selling their products at bargin-basement prices – in fact, less than it costs to make them. Or they might benefit from heavy subsidies from their home countries, making the competition with U.S. firms unfair.
Scott described the differences between the “dumping” cases that involve shipping underpriced products to the U.S. and “countervailing duty” cases that involve subsidies by foreign governments. Companies seeking to pursue a case of such unfair competition go through regulators at the U.S. International Trade Commission and Department of Commerce.
The standards for taking a case are straightforward. Among anti-dumping cases, for example: If foreign exporters sell to U.S. at “less than fair value” and those sales cause or threaten material injury to the U.S. industry producing the “like product,” then the U.S. will impose anti-dumping duties.
Scott also described the ratonale behind the push to impose tariffs on imported steel – one of the highest-profile actions by the Trump administration. Paul’s group represents the United Steelworkers union and manufacturers often hurt by imports. The rationale includes the fact that certain kinds of steel are vital to national security.
“It’s the core material in every defense application we have,” he said. “There are few materials that are more militarily sensitive than steel and aluminum.”