President Donald Trump repeated his threats to punish trade partners in his State of the Union address Tuesday and echoed his World Economic Forum message that his administration will battle other partners it thinks are using predatory trade practices against U.S. companies and the American economy.
In brief comments about trade, Trump offered a little red meat to voters who backed him largely because of his “America First” push and mistrust of international trade deals.
“America has finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs and our wealth,” Trump said. “The era of economic surrender is totally over.”
He drew applause when he said, “From now on, we expect trading relationships to be fair and reciprocal.”
Watch: The State of the Union in 3 Minutes
In his first year in office, the president pulled out of the Trans-Pacific Partnership agreement, started to renegotiate the 1994 North American Free Trade Agreement, or NAFTA, which he has derided as “the worst deal ever signed,” and is in talks to modify the 2012 Korea-U.S., or KORUS, trade agreement.
However, Trump has yet to take a hard line with China or reduce the U.S. trade deficit, as he promised on the campaign trail.
The 2017 U.S. global trade deficit is on track to exceed that of President Barack Obama’s last year in office, according to the U.S. Census Bureau. The 2016 deficit for goods and services was $504.8 billion, while the January 2017 through November 2017 goods and services deficit hit $513.6 billion. The 2017 December trade figures are not in yet.
Trump did seem to put China on notice that his administration will punish it for practices U.S. companies have long complained about, such as forcing companies to share technology as a condition for doing business and lax protection of intellectual property rights.
“We will protect American workers and American intellectual property, through strong enforcement of our trade rules,” Trump said, apparently alluding to Beijing.
He did not say when he will take action, but the U.S. Trade Representative’s Office is conducting a review of Chinese trade practices under an Aug. 14, 2017, executive memorandum that calls for wrapping up the review by August 2018.
Watch: Members of Congress Arrive With Guests for State of the Union
Although Trump made no direct comments about NAFTA, he did say that “we will work to fix bad trade deals and negotiate new ones.” The sixth round of NAFTA talks between the U.S., Canada and Mexico ended Monday with some agreement reached on less contentious issues, while the more difficult agenda items may be tackled in the next round, in Mexico City at the end of February.
The progress in negotiations comes amid ongoing concerns that Trump will make good on threats to withdraw the United States from the trade agreement. Republican lawmakers, in particular, are working to block Trump should he pull out of NAFTA, which a wide variety of U.S. industries rely on.
Hours before the speech, Colorado GOP Sen. Cory Gardner urged Trump in a letter to stay in NAFTA and suggested an update to the deal that would expand U.S. energy exports.
“Canadians and Mexicans buy nearly $500 billion worth of U.S. manufactured goods each year, translating to $37,000 in export revenue for every American factory worker,″ said the letter, signed by 35 other Senate Republicans, including Majority Leader Mitch McConnell. “U.S. agricultural exports to the two countries have quadrupled under the agreement from $8.9 billion in 1993 to $38.1 billion in 2016.″
Participation by McConnell, who seldom signs on to group letters, underscores the Republican pro-trade message.
Surprisingly, Trump did not mention one of his most controversial trade decisions to date — the multiyear tariffs his administration imposed earlier this month on imported solar panels and washing machines — as an example of his efforts to protect U.S. manufacturers from a surge of foreign-made, low-cost products. The solar decision alarmed several Republicans, who worry about job losses in the growing industry.