Trump, Lighthizer, Ford and Free Trade
His trade representative and dealings with U.S. automakers in the spotlight.
Donald Trump announced Robert Lighthizer as his pick to fill the U.S. trade representative position, stating, “Ambassador Lighthizer is going to do an outstanding job representing the United States as we fight for good trade deals that put the American worker first. He will do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.” Lighthizer has experience in government, having served in Ronald Reagan’s administration and as chief of staff for the Senate Finance Committee. Lighthizer is a lawyer by trade and has a long-running relationship with U.S. Steel, the nation’s largest domestic steel manufacturer, as both a litigator and lobbyist. He has been a critic of NAFTA, which has put him at odds with fellow Republicans and more in line with Trump’s views on trade.
Speaking of American business, in what is being described as the “Trump effect,” Ford Motor has canceled plans to build a $1.6 billion plant in Mexico and instead invest $700 million in Flat Rock, Michigan. It will produce the Ford Mustang and Lincoln Continental at the Michigan plant, as well as high-tech electric and autonomous vehicles. Ford’s CEO insists the market, not Trump, was the catalyst, but it’s hard to separate the two given the timing. Trump had earlier sent a negative tweet regarding General Motors’ plan to produce the Chevy Cruze in Mexico, saying, “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers — tax free across border. Make in U.S.A. or pay big border tax!” He similarly hammered Ford during the campaign.
House Speaker Paul Ryan (R-WI) countered Trump’s threat of raising tariffs, stating in an interview with Hugh Hewitt, “No, we’re not going to be raising tariffs. We think tax reform is the better way of addressing imbalances, leveling the playing field without starting trade wars, without having the adverse effects that you get with protectionism or trade wars. We think leveling the playing field on taxes, reducing the cost on American businesses by reducing regulatory costs, health care costs — that’s the secret to making American businesses more competitive — not raising prices or raising tariffs, but lowering the costs and leveling the playing field.”
There’s no question Americans generally favor — at least in theory — having their stuff made right here in America, so Trump’s playing smart politics at a minimum. Trump’s position on trade may best be described as an American cronyism, favoring companies that domestically manufacture their goods over and against companies using foreign production. It remains to be seen, however, if Trump’s approach to trade solutions will constitute more carrot or stick. So far it seems the latter may be the case.
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