The first days of the Presidency of Donald J. Trump confirm the new Administration’s focus on international trade. Several trade-related developments initiated by the White House include the following:
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As promised on the campaign trail, President Trump has already taken steps to formally withdraw the United States from the Trans-Pacific Partnership (TPP). The President also has indicated a preference to “begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.”
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President Trump also has reaffirmed his desire to renegotiate the North American Free Trade Agreement (NAFTA), with a related promise that “if our partners refuse a renegotiation that gives American workers a fair deal, then the President will give notice of the United States’ intent to withdraw from NAFTA.”
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President Trump appointed two additional members to the National Trade Council (NTC) – Alexander Gray (Deputy Director for the Defense Industrial Base) and Rolf Lundberg (Deputy Director for “Buy American, Hire American”) – where they will join NTC Director Peter Navarro.
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President Trump’s inaugural speech laid down “two simple rules” for the United States: “Buy American and Hire American.”
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Consistent with that credo, President Trump signed a Presidential Memorandum Regarding Construction of American Pipelines, which directs the Secretary of Commerce to “develop a plan under which all new pipelines, as well as retrofitted, repaired, or expanded pipelines, inside the borders of the United States, including portions of pipelines, use materials and equipment produced in the United States, to the maximum extent possible and to the extent permitted by law.” Additional analysis regarding this pronouncement may be accessed below and here.
In other news, Stanley Black & Decker Inc. has announced plans to build a $35 million plant in the United States. The company indicated that this expansion is a part of its existing efforts to ramp up domestic production capabilities, which already include 3,000 employees at 11 plants. In a recent call regarding the company’s fourth quarter earnings, Stanley Black & Decker management explained that the new facility would be “a showcase plant” in connection with the company’s recent acquisition of the Craftsman brand, and creates “an excellent opportunity to re-Americanize and revitalize this legendary brand.” Company management explained that “whether or not any of the proposed concepts” announced by the Trump Administration (e.g., border tax), “are implemented or not, it’s making more sense to have that U.S. presence because…the end-users really like those tools that are made in the United States.”
Ongoing developments regarding tax reform proposals designed in part to reduce the trade deficit and to generate revenue to help pay for the construction of a wall on the Mexican border demonstrate that trade and manufacturing-related issues will remain front and center during the early phase of the Trump Administration.
