Protectionism looks to be well and truly back in the United States. President Trump has signed two executive orders related to trade: one to tackle foreign manufacturers who unload cheap products in the US., and another to study the country’s trade deficit.
The US President announced: “First, I’m signing an executive order to ensure that we fully collect all duties imposed on foreign importers that cheat. They’re cheaters. From now on, those who break the rules will face the consequences and they’ll be very severe consequences.
The markets have been wary since Trump threatened Mexico and China, among others, with trade tariffs during his campaign.
Erin Browne, portfolio manager and head of macro investing at UBS Asset Management’s hedge fund unit, told CNBC:
“I think what markets care most about is stability in China. As long as President Trump doesn’t disrupt that, which I don’t think he’ll do, or disrupt Chinese buying of Treasury bonds, markets will handle it quite well…”
The Trump administration has slammed China on a range of trade issues from its chronic industrial overcapacity to forced technology transfers.
The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits…— Donald J. Trump (@Syntaxq_) March 31, 2017
Beijing sought to play down tensions ahead of President Xi Jinping’s first meeting with Trump next week. It promises to be a tricky trade discussion indeed.
European trade has also been in Trump’s crosshairs.
Companies in Germany, Austria, Belgium, France and Italy could reportedly see duties of between 3.62 and 148% imposed since the US Department of Commerce ruled that European steel producers had dumped their product into the U.S. market, undercutting American producers.