Robert Lighthizer Named Chief Trade Negotiator; Trade Policy Changes on Horizon

Yesterday, President-elect Trump named veteran Washington trade lawyer Robert Lighthizer as his chief trade negotiator in a move that confirms Mr. Trump’s intention to get tough with China, Mexico and other trade partners.

Lighthizer, who is with the firm Skadden, Arps, Slate, Meagher and Flom and was deputy trade representative during the Reagan administration, would replace Michael Froman, the Obama administration’s representative who led negotiations on a Pacific trade pact that would have covered nearly 40 percent of the global economy and was seen as a counterpoint to China’s rising clout.

Trump, however, argues that deals such as the North American Free Trade Agreement and the Trans-Pacific Partnership kill American jobs. He has vowed to make smarter deals and has signaled a tough stance on trade with China, including levying a hefty tariff on Chinese imports.

Lighthizer has previously accused China of unfair trade policies and has long advocated protectionist trade policies. In his role during the Reagan administration, he helped to stem the tide of imports from Japan in the 1980’s with threats of quotas and punitive tariffs. In public testimony in 2001, Lighthizer argued that China has failed to live up to commitments made in 2001 when it joined the Word Trade Organization and that more aggressive tactics are needed to “force change in the system.”

The Wall Street Journal’s William Maudlin writes that the choice of Lighthizer as U.S. trade representative signals a sharp shift in trade strategy that “will include a move away from multilateral deals, a tougher approach to China and Mexico and the threat of duties to impose higher costs on imports”. Mainstream economists warn that protectionist policies like import taxes could impose higher prices on consumers and slow economic growth.

Sources: Wall Street Journal, Bloomberg, Rueters