US President Donald Trump’s prospective chief trade negotiator Jamieson Greer at his confirmation hearing in Washington on Feb 6. - Bloomberg
WASHINGTON: Trade winds have blown a certain way for decades: Asia has mostly been the exporter and the US the biggest importer. Asia is also the producer, while the US is the consumer with an enormous appetite.
That may be about to change, as the White House, under new management, looks for ways to cut the largest trade deficit in the world, amounting to more than a trillion dollars.
Most nations run huge trade surpluses with the world’s largest economy, which buys more goods from the rest of the world than it sells.
At a congressional confirmation hearing for US President Donald Trump’s prospective chief trade negotiator Jamieson Greer, senator after senator had the same demand: Amp up the market for America’s wares – from apples and whiskey to energy, digital goods and services.
The Feb 6 hearing, held days after the White House fired the opening shots of a trade war, also made clear that US political elites are worried about the fallout of Trump’s tariff threats on a country where millions hold trade-related jobs.
The other source of unhappiness was Trump’s push for universal tariffs, a campaign promise that he would impose at least 10 per cent on all goods from all countries.
There was no sufficient rationale or precedence for such sweeping measures, the senators said.
Such tariffs would also impact Singapore, which is among a few countries to have a trade deficit with the US.
Greer, 44, who played a key role in negotiating the US-Mexico-Canada Agreement and the phase one trade deal with China during Trump’s first term, was rarely on the back foot during the three-hour hearing.
Unlike Trump’s more controversial nominees, such as Robert F. Kennedy Jr for health secretary, Kash Patel for chief of the Federal Bureau of Investigation and Tulsi Gabbard for director of national intelligence, Greer’s candidature faced hardly any resistance.
The clamour for market access was the loudest from senators hailing from states producing agricultural goods. These states, which export significant amounts of soya bean and corn to China, fear retaliatory tariffs.
A 10 per cent tariff on all Chinese goods went into effect on Feb 4, a day after Trump paused for 30 days his planned 25 per cent tariffs on goods from Canada and Mexico.
In return, Beijing said it would implement from Feb 10 a 15 per cent tariff on coal and liquefied natural gas products as well as a 10 per cent tariff on crude oil, agricultural machinery and large-engine cars imported from the US.
It also placed curbs on exports of minerals and began an anti-monopoly investigation into Google.
“We have not opened up any new markets for our farmers in the last four years. Farmers are also concerned that they may become the target of retaliation if we use tariffs to pressure other countries to change their ways,” said Republican Senator Mike Crapo, chairman of the Senate Finance Committee, which convened the hearing. His state Idaho is a leading producer of potatoes, barley and milk and cheese products.
Greer promised to shake things up. “For many decades, we have had a trading system where the United States opens its market over and over again, and others do not. In India, for example, their average tariff rate on agricultural products is 39 per cent,” he said.
Democratic Senator Maria Cantwell from Washington state suggested that a “tariff first” approach was misplaced.
“The biggest task at hand is to get more free trade agreements, to get US products into more places,” she said.
Apples are her state’s No. 1 export item, with most sold in Canada.
Before the tariffs were suspended, Canada had vowed to match Trump’s threat of a 25 per cent tariff on most imports from the northern neighbour.
New Hampshire’s Democratic Senator Maggie Hassan warned that if tariffs on Canadian fuel imports – proposed at 10 per cent by Trump – were to go ahead, they could raise home heating oil bills at a time of freezing temperatures.
Around 80 per cent of New England’s fuel comes from Canada, she pointed out. Before Trump delayed tariffs, some New Hampshire customers were told they would pay a 10 per cent surcharge on their bill, adding more than US$100 to fill a 1,041-litre tank, she said.
She asked: “How would you track the impact of the President’s tariffs on New Hampshire’s families and small businesses, and what actions would you take to address increased prices caused by these tariffs?”
She proposed Greer create a hotline at his office for small businesses to call to help navigate increased prices from tariffs. He agreed.
Her fellow Democrat Senator Catherine Cortez Masto from Nevada said a small business in her state had complained about losing tens of thousands of dollars because of the trade tensions.
“I just have to tell (the businesses), ‘You are just going to be, unfortunately, a victim of the trade war. Suck it up. It’s better for the country.’”
She added that workers could end up as “collateral damages”.
For Republican Senator Steve Daines from Montana, the concern was small ranchers and farmers, who were paying for the previous round of tariffs on aluminium and steel. That had pushed prices up 15 per cent, which came to bite them when they bought large farming equipment, he said.
“Farmers and ranchers are facing razor-thin margins, in many cases now negative margins,” he said, asking for swift action to secure new markets for Montana’s producers of wheat, barley and pulses.
That idea of imposing universal tariffs drew the ire of the top Democrat on the panel, Senator Ron Wyden of Oregon.
“My view is that a smart approach in trade is to dig in, in a targeted kind of way,” he said.
“The Trump approach is to apply universal tariffs across the board... that’s a prescription for hitting our citizens, small businesses and individuals... and also raising inflationary pressures.”
But Greer defended Trump’s way, saying it makes sense in the context of the US trade deficit in goods, which hit a record US$1.2 trillion in 2024. The year saw a record rise in both the imports of goods and services, which grew to US$4.1 trillion, while exports hit US$3.2 trillion.
“How large of a trade deficit do we want? Because the trade deficit represents, in large part, manufacturing jobs that have gone overseas,” Greer said.
A universal tariff should be considered to see if it can reverse the direction of the deficit and the offshoring, he said, adding that the US had only a “short window” to restructure the international trading system.
Senator Tina Smith, a Democrat from Minnesota, zeroed in on a key issue that might hobble the administration’s search for new deals and markets.
Trump’s “erratic and chaotic” trade policy made the US seem like an unreliable negotiator and trading partner, she noted.
“Greer, how do you go in and try to negotiate in good faith with potential trading partners when we have a President who appears willing to tear up agreements on a whim, on an issue that might be completely unrelated to trade?”
Greer said that even if it was disruptive, Trump’s threat to impose tariffs on Canada, Mexico and China was intended to protect the US against drugs such as fentanyl and illegal immigrants. As the US trade representative, he would try to find a balance between securing more markets for US goods, protecting US workers and safeguarding national security. - The Straits Times/ANN
