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Trump boasts of 'great new trade deals,' but he hasn't finalized any

The Washington Post

August 15. 2018 10:10PM
A detail of a “Made in U.S.A.” Fender Telecaster model electric guitar is pictured in Rome, Italy, on Wednesday. (MAX ROSSI/REUTERS)

President Donald Trump touted his trade agenda Wednesday, writing in a Twitter post that his tariffs are “leading to great new trade deals.”

But so far, he has yet to finalize any trade deals.

Trump has put hefty extra taxes on certain imports coming from China, Canada, Mexico, Japan, South Korean, Turkey, the United Kingdom and the European Union.

Most of these nations were outraged by the tariffs, and their leaders called or met with Trump to express their frustration. Nearly all of the foreign leaders then proceeded to hit back at Trump by putting tariffs on some U.S. products such as soybeans, Harley motorcycles and whiskey.

The result is that just over a year and a half into his presidency, Trump has achieved an escalating trade war and some heated conversations about trade, but no actual deals have been signed. The Trump team argues the tariffs are giving them leverage in trade negotiations and any short-term pain from the tariffs will eventually be worth it, but they are yet to see results.

“President Trump has only imposed tariffs. He has yet to get any other countries to remove their tariffs or to remove his own tariffs,” Chad Bown, a trade expert at the Peterson Institute for International Economics, wrote on Twitter. “There are not yet any trade deals. None.”

The closest Trump has come to a genuine deal is with South Korea and the European Union, long-time political, military and economic allies of the United States.

The Trump Administration put out an announcement in March saying an agreement with South Korea had been reached “in principle.” In July, the White House said the United States and European Union would “work together toward zero tariffs” and start an “executive working group” to hopefully reach a deal. Neither deal has been finalized on paper yet, let alone signed by both sides. Trade experts say a sweeping agreement with the European Union could take years.

South Korea was supposed to be the model trade deal. The Trump Administration hinted nearly a year ago that it would withdraw from the free trade deal with South Korea, known as KORUS, if Korean leaders didn’t agree to concessions.

On March 23, Trump hit several nations with a 25 percent tariff on steel and a 10 percent tariff on aluminum sent to the United States. South Korea was initially exempted because the White House said the trade negotiation was progressing well, but the threat was there that the tariffs could go into effect.

The South Korean government seemed eager to negotiate and put this behind them. By March 27, the White House and South Korea announced the framework of a deal where South Korea would lower barriers so more U.S. cars could be sold there. South Korea also agreed to reduce its sales of steel to the United States by 30 percent in exchange for Trump removing the tariff.

Top White House officials such as Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer made the television rounds to herald the deal as proof the Trump trade agenda was working, calling it “historic” and an “absolute win-win.” Trump tweeted it was a “great deal.”

Yet nearly five months later, the deal has not been finalized, a time frame trade experts say is getting long for what appeared to be a straightforward tweak to an existing deal. The hold up, according to South Korean lawmakers and former U.S. trade officials, is Trump’s new threat to put tariffs on foreign-made cars and trucks. South Korean companies like Hyundai and Kia sell a lot of cars in the United States, and South Korean leaders thought their country would be excluded from any further tariffs if they signed a revised KORUS with the Trump Administration.

“The Koreans learned that even if you reach an agreement with the Trump Administration, they might hit you again with something later to get more,” said Troy Stangarone of the Korea Economic Institute.

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