Trump to Punish China Outside WTO

By Charles Wallace

U.S. Trade Representative Robert Lighthizer said Monday that the Trump Administration is drawing up plans to punish China outside the World Trade Organization.
Speaking at the Center for Strategic and International Studies in Washington, Lighthizer said the government is looking for “other ways” to defend American companies and workers from the effects of China’s subsidized trade.
“The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented,” he said.
But he gave no hint what those weapons might be beyond punitive tariffs on Chinese exports, which the US already uses to some extent.
The World Trade Organization was established in 1995 and China joined the organization five years later, agreeing not to permit government subsidies of state enterprises, a problem China continues to violate with impunity.
Lighthizer also said he supported President Trump’s idea that trade deficits matter despite widespread criticism from economists who argued that bilateral trade deficits were unimportant as long as the country’s overall trade was in relative balance.
“I think it is reasonable to ask, when faced with decades of large deficits globally and with most countries in the world, whether the rules of trade are causing part of the problem,” the US trade representative said.

He asked how trade rules could be considered fair when some countries charge 10 percent tariffs on cars while the US charges 2.5 percent or when some countries “continuously undervalue their currencies.”
Trump has repeatedly charged that China and Germany have undervalued currencies, but only the Chinese currency’s exchange rate with the US dollar is determined by the government. 

Germany uses the euro which is freely traded.
Lighthizer also said the government was looking at all previously negotiated trade agreements to see if they were fair. 

He said one measure of fairness would be one country had a persistent trade deficit.
“It is reasonable to ask after a period of time whether what we received and what we paid were roughly equivalent,” he said.