White House Council of Economic Directors chairman Christopher Phelan suggested Thursday that the Trump administration needs additional levers to pull, beyond tariffs, to ensure that other countries stick to bilateral trade agreements.
Phelan, who rarely speaks in public, took part in an event on Thursday hosted by the US-Asia Fair Market Alliance ahead of next week’s United Nations General Assembly and Chinese President Xi Jinping’s state visit to Washington.
He told Thursday’s crowd that he didn’t like using the word “fair” to describe trade relationships.
“Countries should act in their self-interest. I don’t begrudge the government of Japan for worrying about the people of Japan — that’s their job. That’s what they were elected to do. But likewise, the government officials, the elected government officials in the United States, were elected to serve the interests of the people of the United States,” he said. “So I see these trade negotiations as exactly that … two groups of democratically elected peoples or their underlings simultaneously negotiating, each having the objective the well-being of their own people. That may sound obvious, but it’s not.”
Still, Phelan conceded that, when it comes to President Donald Trump’s bilateral trade agreements, “just because something is agreed to doesn’t mean that the other side is going to conduct the future based on what you thought they were going to conduct based on the agreement.”
Phelan, when prompted by the moderator, gave tacit approval of the “No Racketeers on Our Shores Act,” Republican legislation taken up by the House Judiciary Committee that would allow the United States to deport or deny visas for foreign government officials or regulators who target U.S. companies.
“I see this as — the term I will use — as an enforcement mechanism. If we agree to something and we come to the conclusion that we don’t think that the agreement is being held. We get to make our move in the game as well,” Phelan stated.
Except for the tariffs, the broader points of Trump’s trade agenda poll remarkably well.
A survey commissioned by the US-Asia Fair Market Alliance and conducted last month found that 88% of the more than 1,300 respondents, voters and trade policy wonks alike, agreed that “U.S. allies should provide American companies the same fair market access the U.S. provides to their companies.”
An additional 83% of respondents believed that “the U.S. government has a responsibility to work to ensure fair treatment of American companies abroad,” with 65% supporting “U.S. government action when American companies receive unequal treatment in international markets.”
Next week, Trump will host the Chinese president for a two-day trip to the White House. Top administration aides have broadly previewed some advancements on the initial trade framework Trump negotiated with Beijing last summer, but declined to characterize any movement in the ongoing talks. The leaders, in May of this past year, agreed to resume face-to-face talks in September on a plan to reduce reciprocal tariffs for some $30 billion worth of goods.
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Still, China maintains a massive real-world trade advantage over the U.S., with roughly 75% of the roughly $400 billion annual exchange consisting of Chinese exports to America.
Furthermore, to Phelan’s point, Beijing is lagging behind schedule on its annual U.S. soybean commitments, negotiated with the Trump White House last year. China will head into the Trump-Xi meeting purchasing roughly 13 million metric tons of American soybeans, just over half of the annual commitment.