Trump on Trade: What it Means for Your Business
Donald Trump’s pre- and post-election statements on international trade and investment issues call into question the legal framework on which businesses and investors have relied in developing their global supply chains and businesses more generally. Mr. Trump has, for example:
- Called for a renegotiation of and potential withdrawal from NAFTA, pledged to impose tariffs on Mexican products, and criticized US manufactures for their Mexican investments and operations (see NAFTA In Play Alert)
- Withdrawn the US from further participation in the Trans-Pacific Partnership
- Pledged to "pull out" of the WTO if it is not renegotiated so as to permit higher US tariffs on Chinese products
- Launched investigations under the rarely-used Section 232(b) of the Trade Expansion Act, to determine whether to levy tariffs on steel and aluminum on national security grounds
- Called for more robust enforcement of trade remedies (anti-dumping and countervailing duties)
- Issued an Executive Order instructing his Administration to establish new restrictions on business transactions with, and travel to, Cuba
The Presidential Transition Team announced that Treasury Secretary Mnuchin and Commerce Secretary Ross for Commerce Secretary would bring "a seismic and transformative shift in trade policy." The Trade and Manufacturing Policy Director is Peter Navarro, who warned of the US's "economic death" due to China's unfair trade practices and lack of consumer safety mechanisms, and claimed that NAFTA has caused the loss of 700,000 US jobs.
Planning for the future
It is difficult to predict concrete steps based on campaign (or post-election) rhetoric. Nevertheless, in the short-term companies should begin asking questions designed to identify the potential risks - and opportunities - presented by the incoming administration's international trade and investment agenda.
We have a dedicated team of international trade and commercial experts who are able to help companies navigate their future. If you would like to discuss the implications of the Trump administration's trade policies for your company, please get in touch with your usual Baker McKenzie contact or, alternatively, Paul Burns, Raymundo Enriquez, Rod Hunter, Janet Kim, Amy de la Lama, Ted Murphy, Miguel Noyola or James Small.
For media enquiries, contact Stephen Stewart.