“WE are in a trade war,” said Wilbur Ross, Donald Trump’s commerce secretary, on March 31st. That day Mr Trump duly loosed off a couple of warning shots, announcing two trade-related executive orders. (He forgot to sign them in the ceremony itself.) As tactics go, this was hardly shock and awe. Rather, it was supposed to suggest that nastier weaponry is on the way.
The first executive order was aimed at making trade rulebreakers “face the consequences”. Some bits were vague: officials have 90 days to develop and implement a plan to combat customs violations. Others seemed trivial. The government has lost $ 2.3bn of revenue over 14 years from importers going bankrupt before paying duties; almost half of this relates to imports of fresh garlic and preserved mushrooms.
The second executive order seemed more in keeping with Mr Trump’s (trade) warmongering. Officials have 90 days to produce an “omnibus” report, naming the trading partners with which America had a “significant” trade deficit in goods in 2016 and shaming them if the reasons for that deficit are “unfair”. Based on what it finds, Mr Trump promised to “take necessary and lawful action”.
Top of…
The Economist: Finance and economics
