There is no doubt about the big question that looms now for the international trade, the officials.
Is: what do you expect from the United States, under the presidency of Trump?
For decades after the Second World War, THERE was probably the biggest cheerleader for the progressive liberalization of trade that took place.
Now, the US is the main cause of anxiety among the supporters of this process.
President Trump’s approach to international trade is assertive, confrontational, and driven by an agenda that is described as economic nationalism.
It is a central element behind the escalation of tension in the business this week.
Some fear that this approach may compromise the system that has evolved in the last three quarters of a century.Ambivalent
It is a complex system, largely based on rules managed through the World Trade Organization (WTO), supplemented with agreements between groups of countries that still offer deeper trade integration.
President Trump has shown little enthusiasm for those deep agreements. He pulled out one which was implemented as soon as he took office – the Trans-Pacific Partnership, and has threatened to divorce the other, the North American Free Trade Agreement.
On the WTO, the Trump administration has been ambivalent.
Some of the recent steps that have received WTO justification. The controversial tariffs on steel and aluminium followed an investigation by the Department of Commerce concluded that imports of metals were a threat to national security.
In substance, the argument is that the US military needs a more reliable source of supply of the country, its industry.
WTO rules do not permit countries to impose trade barriers to protect national security that would not otherwise be allowed.
Another question, if national security was really the motivation, and many critics, including the European Commission and China, I do not think that it was.
Tariffs on the import of washing machines and solar panels safeguard measures, the actions that are allowed in response to surges in imports, provided that they are done in a way that is consistent with the rules of the WTO.
More difficult is the proposal, not yet implemented, to target Chinese goods with tariffs because of the country’s alleged misappropriation of intellectual property, such as patents, drawings and models of American companies.
It is certainly true that the protection of the trading partners of intellectual property rights is required by the rules of the WTO and US concern about China is shared by others, including the EU.
But the countries are in most of the cases it should use the procedures of the WTO before retaliating on the basis of a dispute panel of the authorization of the action. The US has made an official complaint to the WTO, but only that it happened last week.
It will be for many months, until there is a judgment, and even if China loses and fails to comply there will be a further delay before WE are given the authority to retaliate. It will be the President’s Trump be willing to wait so long? Unilateral action
So it is certainly possible that the US will jump the gun and decide to go ahead, while the WTO process of rumbles. That would be difficult to reconcile with the norms of the organization.
In the meeting of the WTO last week, Chinese officials warned that a unilateral action from the US, undermines the multilateral trading system, and it sets a bad precedent.
China, Ambassador Zhang Xiangchen said at the meeting that the member countries must act together to “block this beast in the cage of the WTO rules”.
Still, the fact that the UNITED states have begun the process of dispute resolution can be seen as a sign that the Trump administration sees the OMC as a useful.
It is worth noting that China is also impressive in his first retaliatory shots without a decision of the WTO, even if there is a way that sometimes can be done according to the rules. However, it is debateable if such a provision really applies in this case.
Still, the Trump Administration has a strikingly different tone of the market after its predecessor.
The economic nationalism that motivates the President, the Trump and some of his team is willing to see in other countries, such as trading unfairly. It sees trade deficit as a sign of weakness, as an indication that the trade agreements are faulty and unfair.
It is true that the President, Trump has fired the most influential voice by pressing this approach, his former chief strategist, Steve with the mother. But the disagreements that have led to that non-commercial.
And there are others of similar points of view are still in key positions for the business policy. His Commerce Secretary Wilbur Ross, the US Trade Representative Robert Lighthizer (who is in charge of negotiating trade agreements) and the president of the trading advisor, Peter Navarro, director of the National Trade Council, are all from that mould. The Global Trade
More from the BBC series taking an international perspective on the trade:
Markets edgy on US-China trade war fears
Trump announces the rates to $60 billion dollars in Chinese imports
Brexit boost for consumers short-term, says IFS
US retail giant to ask for the Trump to reconsider China rates
UNITED kingdom to seek to be exempted from US steel tariffs
Mr Bannon’s departure did not reflect a disagreement on economic nationalism the order of the day. But the resignation of Gary Cohn, as head of the National Economic Council has done.
Daniel Cohn was someone seen as resisting the agenda of the administration. The cooking of the Secretary of State, Rex Tillerson reflects a series of disagreements with the President, including the steel and aluminium prices.
Of the President Trump the central, view on trade is that other countries take advantage of US. It is certainly true that trade barriers are among the lowest. Tariffs taxes on imports – are the easiest barrier to measurement and average levels in the USA are low. Not the lowest in the world as Mr. Navarro claimed.
Hong Kong does not have any at all and depending on how you calculate the average of the rates many others are inferior to US. But certainly American tariffs are relatively low.
There are some goods where American tariffs are of the highest known in the commercial world as “tariff peaks”. There are a few in excess of 100% for agricultural products and there is a service of 25% on light trucks.
This means that other countries are taking advantage of US? It is debateable. The mainstream view among trade economists is that the biggest losers are the rates buyers interested in goods in the country that requires them. The main beneficiary
Have to pay more, why not purchase imports from a supplier who has to recover the cost of fees or from a supplier at the national level that is able to increase their prices as a result of the protection afforded by the tariffs.
And sometimes the buyers of the defective goods are the enterprises that use them as input. Steel and aluminium are the cases in point.
There is therefore a case that might be supported by many trade economists that the main beneficiary of low US rates, is the same, in particular the American consumer.
But the President, Trump focuses on producers, companies, and employees – who see themselves as being affected by a low-cost, and which claim, unfair foreign competition, particularly from China.