US to get tougher on China, unfair trade, Commerce Department secretary says

Speaking to the 2018 National Competitiveness Forum in Washington, Ross signaled that the US intends to pressure China on behalf of the interests of the United States and its private-sector innovators. There had been talk of a truce between the two nations in advance of this weekend’s G-20 meeting in Argentina. 

The commerce secretary on Wednesday accused China of the “institutionalization of cyber theft” and “infiltration of universities and national laboratories.” He said Trump is working on leveling the playing field on trade, stating that “there are subsidies and literally hundreds of trade access barriers” facing US exports.

Ross said the Trump administration is working on new federal investments for research in outer space and in other publicly funded development that benefits the nation’s private sector. He said next week at the White House “Ivanka and I” – referring to Trump’s daughter – will announce a new initiative on workforce development. 

“It’s essential for the United States to maintain technological leadership,” Ross said. 

Ross spoke for about 15 minutes without once mentioning Section 232 or any US tariffs or quotas on imports. Earlier in the day, other speakers did mention tariffs, noting that they are an impediment to competitiveness.

Harley-Davidson president and chief executive officer Matthew Levatich said his company faces “high tariffs,” and inputs, and downstream products instead should be free to “compete on their merits and not on artificially imposed barriers.”

In auto production, “what’s poison for us is tariffs and trade barriers,” said Knudt Flor, president and CEO of BMW Manufacturing. “We need to get the best part that’s available in the world, and we need to get our product out to market” [without the] artificial cost [of cross-border duties]. 

Section 232 caused prices for steel to increase in the first half of 2018. Fastmarkets AMM’s hot-rolled coil index hit a multiyear peak of $45.84 per hundredweight ($916.80 per ton) in July but has declined to $38.59 per cwt ($771.80 per ton) since then. 

Fluor chairman and CEO David Seaton also stated a preference for free trade but noted that “at least the tariff situation is creating a dialogue.”

Ross also did not mention a need for public infrastructure investment. Other speakers emphasized the point.

“We need infrastructure!” said Deere chairman and CEO Samuel Allen, chairman of the Council on Competitiveness, which hosted the conference. 

“We’re living off Eisenhower,” Allen said, referring to President Dwight Eisenhower’s spearheading of the interstate highway system and the failure of recent presidential administrations to enact a similarly bold federal infrastructure initiative.

Seaton said the next infrastructure plan needs to confront the needs of “2060, 2080” – broadband, for example – and not just fixing “potholes” and nonessential pork barrel projects. 

“We will have an infrastructure bill next year, and it will disappoint every one of us here today,” Seaton said. “There’s going to be a lot of things the local politicians need to get reelected – a lot of projects that do not push us toward the future of infrastructure.”