When Trump administration first became rigid with global trade including imposing of tariffs on Chinese products, many believed the president had no strategy, but lately things are taking shape with a more coherent approach and it is being said the deals would work.
Trump has beaten up traditional allies including Mexico, Canada, South Korea, Japan and the European Union. Tariffs have been placed on aluminum and steel. It is threatened the automobiles sector too will be taxed. It is all for the interests of American. Last weekend a new Nafta tri-lateral deal was struck with, calling it with a new name – United States-Mexico-Canada Agreement (U.S.M.C.A.). Late last month a trade deal was achieved with South Korea too.
Now it is assumed similarly patterned deal may also be agreed with Japan and Europe soon. This mean China will be isolated. The country will be compelled to make major changes in their trade practices.
Amid all these the ultimate goal is to reset the economic relationship with allies, China and rest of the world too. Initially it may cause pain and achieving all the deals may take some time, but the idea is to leverage force to made countries allow American products to be sold freely.
Vice president Pence lately said the new Nafta deal with Mexico and Canada will make the two countries negotiate a trade deal with nonmarket economy like China without risking access to the U.S. market, which is real huge.
White House economic adviser Larry Kudlow outlined a strategy called “China is first and foremost.” He said, “There’s a lot of unfair trading practices, and the biggest culprit is China.”
He added that talks are being held with the European Union and Japan, and U.S. is moving towards a trade coalition with them to confront China.
Now, as the new Nafta deal has been signed, it is to see how the elements of Trump trade fit together. Syracuse University professor Mary E. Lovely said strategy is being seen but it does not be taken as granted to be a good strategy and it is not yet known what could be the endgame.