U.S. President Donald Trump directed his administration to review U.S. trade deficits and clamp down on countries that abuse trade rules. Fred Katayama reports.
President Trump signed two executive orders aimed at cracking down on trade abuses he says is behind the massive U.S. trade deficit. The first order calls for studying the causes of the U.S. trade deficit. Gary Hufbauer, a senior fellow at the Peterson Institute of International Economics, says China and Mexico are not the culprits. (SOUNDBITE) GARY HUFBAUER, SENIOR FELLOW, PETERSON INSTITUTE OF INTERNATIONAL ECONOMICS, (ENGLISH) SAYING: "We know why there is trade deficit. It's very simple. The dollar. The dollar is very strong. That explains 80 percent or 85 percent of the trade deficit. You got a super strong dollar, you're gonna get a trade deficit. Now, why you got a super strong dollar because we have fiscal deficit, as you know, and we don't save very much as a country." The second trade order calls for stepping up the collection of anti-dumping and countervailing duties from foreign governments that subsidize products so they can be sold below cost. (SOUNDBITE) GARY HUFBAUER, SENIOR FELLOW, PETERSON INSTITUTE OF INTERNATIONAL ECONOMICS, (ENGLISH) SAYING: "I think the reason for signing that executive order is to put other countries on notice that we might, the United Sates, might come knocking on their doors, add some provisions to our liking after we negotiate with Mexico and Canada." The orders come a week before the president will host Chinese President Xi Jinping for talks at his Mar-a-Lago estate in Florida. Trump tweeted Thursday evening "The meeting with China will be a very difficult one in that we can no longer have massive trade deficits and job losses. American companies must be prepared to look at other alternatives." Last year, the U.S. trade deficit widened to a four-year high exceeding $500 billion. The deficit from trade with China totalled $347 billion.