US business hands Trump his tariff moment

Donald Trump
Saul Loeb | AFP | Getty Images
Donald Trump

Donald Trump has become increasingly frustrated with his administration's inability to deliver the nationalist trade agenda — and bold tariffs — he promised during his campaign. Now some US companies may be about to rescue him from that frustration.

Trade cases involving Chinese solar cells, South Korean washing machines and Canadian jets are expected to land on the president's desk in the coming weeks. Each has its own complexities, and each faces opposition both at home and abroad. Yet they may prove hard to resist for a president eager to wield his protectionist pen.

The cases and the tariffs that seem likely to emerge from them also illustrate the duelling personalities that corporate America is now displaying on trade.

Receive 4 weeks of unlimited digital access to the Financial Times for just $1.

Much of the US business community has been working furiously to convince the White House to preserve pacts like the North American Free Trade Agreement that Mr Trump has in his sights. Yet major companies like Boeing and Whirlpool are also finding much to like in the administration's muscular approach to enforcing anti-dumping and other less-used trade laws.

The first of those decisions came on Friday when the International Trade Commission ruled that US-based solar cell makers Suniva and Solarworld had suffered "injury" from cheap imports. The finding sets the stage for the ITC to recommend by November that the president order "safeguards" — or broad-based tariffs — on all imports of solar cells, giving Mr Trump the tariff moment he is said to crave.

Similarly, Whirlpool is turning to the administration to restrict imports of washing machines made by South Korean competitors LG and Samsung, which the US company accuses of waging "a relentless assault on US manufacturers . . . and the thousands of American workers they employ". Like the solar companies, Whirlpool argues that traditional anti-dumping measures targeting specific products from individual countries have failed to stop cheap imports as the South Korean manufacturers have moved production around the world to avoid US duties.

Boeing, meanwhile, has drawn the ire of Britain's Theresa May and Canada's Justin Trudeau over a more traditional anti-dumping case it has brought against Canadian rival Bombardier. Many experts expect that case to be given the green light by Mr Trump's commerce department on Monday despite lobbying and threats from the two US allies.

All three cases have prompted a question: would they have happened if Mr Trump was not president?

Trade lawyers in Washington say his administration has been good for business and invited a flurry of inquiries from US companies which see an opening to bring complaints that other administrations might have viewed with scepticism. But other experts are more cautious.

"These are not cases that are out of the blue. They have been trying to stop these imports for years," says Chad Bown of the Peterson Institute for International Economics. "But would we have seen them under previous administrations? Maybe not."

The question is particularly pertinent for the "safeguards" cases launched by the solar companies and Whirlpool.

Such cases are rare though not without precedent. President George W Bush in 2002 used the same "safeguards" law to impose temporary tariffs on steel imports. The Obama administration in 2009 employed a similar manoeuvre to restrict imports of Chinese tyres.

Past administrations have also soured on such trade actions. Beyond drawing the ire of trading partners, studies have shown both the Bush and Obama decisions caused more job losses than gains. One study found the Bush administration's steel move led to 200,000 Americans — more than were employed in the entire US steel industry — losing their jobs due to higher steel prices.

In opposing the solar case, other parts of the solar industry — from home panel installers to companies such as Elon Musk's Tesla — have argued that tariffs would raise costs and threaten more jobs than they would save.

Supporters of Mr Trump's tough approach counter that protecting "upstream" manufacturing jobs and industries is more important to the US's long-run economic health than "downstream" jobs.

"America cannot afford to lose another manufacturing industry to imports, particularly one that combines high-tech and renewable energy like the solar industry," the Coalition for a Prosperous America, a group of manufacturers which back Mr Trump, wrote to the ITC this month.

Yet the battle over jobs is also more complex than that.

On the face of it Boeing's case against Bombardier pits a US industrial giant against a Canadian competitor. But the opposition of the UK prime minister, which is based on 3,000 Bombardier jobs in Northern Ireland she is eager to protect, points to the company's global operations, and her concerns are shared by some in the US.

In a letter to the Trump administration last month, members of Congress from Kansas and West Virginia complained that 2,000 Bombardier jobs in their own states were at risk. They pointed out that more than half of the parts in the Bombardier C series aircraft Boeing is trying to keep out are US-made.

Likewise, Whirlpool's petition has been opposed by officials from South Carolina, where Samsung in June broke ground on a home appliance factory in a move that drew praise from the Trump administration.

"Samsung's investment is great news for South Carolina and the United States," Wilbur Ross, Mr Trump's commerce secretary, said at the time. "And it is a direct reflection of the fact that America is becoming an even stronger destination for global businesses looking to grow."

More from the Financial Times:
Why America's tax and trade debate is wrong
Future of US solar industry placed in Trump's hands
Millennial coffee drinkers want farmers appropriately rewarded