After several months of tough talk and even tougher tariffs, President Donald Trump may be pulling some punches in his “America First” global trade offensive.
The president has deferred until next year a decision on imposing 25 percent tariffs on imported automobiles and is considered likely to hold off on new trade restraints on Chinese imports when he meets China’s President Xi Jinping later this month at the Group of 20 summit — refraining for now from moves that would mean higher prices for American consumers.
Larry Kudlow, the director of the National Economic Council, this week also publicly rebuked a prominent advocate of hard-line trade measures, White House adviser Peter Navarro, saying he was “way off base” with recent remarks assailing Wall Street supporters of a compromise with China.
“The recent market turmoil, House election result and angst in farm states has the Trump team rattled on trade,” said one multinational executive, who asked not to be named to speak freely about White House deliberations. “The president still wants to pull the trigger on crazy stuff like an autos tariff, but he’s lost some of his swagger, and a lot of people around him are saying he needs to back away from extreme action.”
Still, Trump often tacks between assertive acts and dealmaking talk. So any pause in his campaign is likely to be temporary, according to several former government officials and trade analysts.
“The president may do a deal on tariffs or a pause,” said one trade attorney who worked in the White House for former president George W. Bush, alluding to the G-20 summit in Buenos Aires that runs Nov. 30 to Dec. 1. “But the president really likes tariffs. His idea of a deal is the standstill agreement he did with the EU, which didn’t really solve anything.”
The attorney was referring to the outcome of European Commission President Jean-Claude Juncker’s visit to Washington, D.C., in July, which resulted in a deal for Europe and the United States in seeking the elimination of tariffs on all industrial-goods trade except for automobiles.
More than four months later, the two sides have made limited progress identifying areas in which regulations and commercial standards could be harmonized. They have yet to begin formal negotiations over tariffs and are unlikely to do so for months, Cecilia Malmstrom, the European Union’s trade negotiator, told reporters Wednesday during a visit to Washington.
“We are willing to negotiate a smaller agreement focused on industrial goods . . . but we haven’t started negotiating anything,” said Malmstrom, who reiterated that the EU would retaliate with its own tariffs on American products if Trump imposed levies on European cars.
Under the July agreement, the two sides agreed not to “go against the spirit of this agreement” — language the Europeans say precludes Trump’s proposed auto tariffs.
