EnU.S. President Trump’s address to Congress did not include firm new trade policies, according to the New York Times’s transcript of the speech. However it did appear to strike a supportive tone for the border-adjustable tax as part of a broader tax reform. Following a reference to a corporate tax cut: “when we ship products out of America, many other countries make us pay very high tariffs and taxes, but when foreign companies ship their products into America, we charge them nothing or almost nothing.”
This may mark a significant slowing of bilateral trade negotiations with other countries, given that it seems unlikely that countries will want to finalize a deal before seeing the final form of the border-adjustable tax. Other areas that may slow negotiations include: details of the U.S. position on currency manipulation will not become clear until at least April, as discussed in Panjiva research of February; ways to operate outside WTO rules are being investigated; and the 90 day NAFTA consultation has not yet started, which Canada and Mexico want to be bilateral talks.
The latest trade deficit for January including services is not due until March 8, though the advanced goods deficit expanded to $69.2 billion compared to economists’ expectations of $66.0 billion. Imports of goods have contributed to an expanding deficit in nine of the past 12 months, adding fuel to Trump administration’s aims to clamp down on them.
Source: Panjiva
