President-elect Trump’s 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)
- Declared he would cause the US to withdraw from the Trans-Pacific Partnership Agreement
- Pledged to designate China a “currency manipulator” and use “every lawful presidential power” to get China to “stop its illegal activities, including its theft of American trade secrets"
- Called for more robust enforcement of trade remedies (anti-dumping and countervailing duties)
- Proposed reorganizing government agencies dealing with trade policy (the “America Desk” proposal)
- Criticized the Iran nuclear deal and the easing of Cuba sanctions
On December 2, 2016, the Presidential Transition Team issued a statement that the President-elect's choices of Steve Mnuchin for Treasury Secretary and Wilbur Ross for Commerce Secretary "signal a seismic and transformative shift in trade policy." The appointment of Peter Navarro (to lead a new team the President-elect named the National Economic Council) may be another indication of a significant transformation. Mr. Navarro has warned of the US's "economic death" due to China's unfair trade practices and lack of consumer safety mechanisms.
Planning for the future
It is difficult to predict concrete steps based on campaign 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.