Pompeo Issues a Warning to the World on Trade
Posted June 18, 2018 8:19 p.m. EDT
Secretary of State Mike Pompeo went to the cradle of America’s car industry on Monday and issued a tough warning to allies and adversaries alike, saying that trading relationships with even close partners were “out of whack” and accusing China of engaging in an “unprecedented level of larceny.”
“It’s the most predatory economic government that operates against the rest of the world today,” Pompeo said of China during a speech in Detroit. “This is a problem that is long overdue in being tackled.”
The blistering remarks suggested that the Trump administration — now that the Singapore summit meeting with the North Korean leader, Kim Jong Un, is over — is further ramping up its efforts to push back against Chinese trade practices. On Friday, a day after Pompeo said he had “good and constructive discussions” on trade with top officials in Beijing, the administration moved ahead with tariffs on $50 billion of Chinese goods, which China immediately matched.
China was not Pompeo’s only target on Monday, and his decision to issue his global warning before the Detroit Economic Club suggested that a sweeping investigation into car imports could result in even more tariffs. The Trump administration has already imposed tariffs on steel and aluminum from its closest trading partners, and Pompeo said that “asymmetric trade relationships” with Canada, Europe, Japan and Mexico needed to change.
“It’s a simple moral principle, this idea of fairness,” Pompeo said.
But the idea of fairness in international trading relationships is exceedingly complex, which is why trade deals often take years to negotiate. The United States has its own list of protected industries — from sugar to peanuts, catfish farming to pharmaceuticals — whose high prices are safeguarded by lobbyists and sympathetic legislators. On average, the U.S. has trade barriers that are higher than Canada’s and Japan’s and about equal to those of its closest European allies.
But Pompeo said the United States would welcome an international trading system with no tariffs or other barriers.
“We are happy to eliminate all subsidies,” he said, a remark that comes as Congress is locked in a bitter fight over providing about $20 billion in annual subsidies to farmers. In 2013, as a Republican congressman from Kansas, Pompeo voted to support such subsidies.
Pompeo spoke to an audience filled with automotive executives uneasy about President Donald Trump’s threats to tear up the North American Free Trade Agreement, which has been the organizing principle of the industry since the pact came into force in 1994.
In the past, Pompeo had been reassuring about the United States’ relationships with its closest allies, saying at a news conference in Singapore last week that, despite a combative Group of 7 conference in Canada that ended in disarray and recriminations, he was “very confident the relationships between our countries — the United States and those G-7 countries — will continue to move forward on a strong basis.”
But on Monday, he said that 70 years after the United States used the Marshall Plan to help Europe recover from the economic devastation wrought by World War II, “we need to make sure that we re-evaluate each of those relationships.”
He later said ties with Canada, Europe and Mexico “are not solely defined by trade,” noting that the countries cooperate on issues such as Afghanistan, Ukraine and North Korea.
Pompeo’s predecessor, Rex W. Tillerson, often sought to moderate Trump’s more unconventional instincts, something that led to his abrupt firing. In his two months on the job, Pompeo has avoided such efforts.
When Trump quickly shifted U.S. policy on North Korea from perhaps the most threatening and hawkish stance in decades to the most accommodating and dovish one since the Korean War, Pompeo supported the change. He even became combative with reporters who asked the kind of questions about the North Korea deal that he as a congressman once asked about the Iran nuclear deal.
Similarly, Pompeo has done little to smooth over the extraordinary rifts Trump has opened up with America’s closest allies.
In a question-and-answer session after his speech, Pompeo reaffirmed that Kim had agreed to “fully denuclearize his country.” Since the summit meeting last week, the two sides’ interpretations of the vague joint statement signed in Singapore have diverged sharply.
“That’s everything, right? It’s not just the weapon systems, it’s everything,” Pompeo said in his only line that won enthusiastic applause.
Pompeo also said that South and Central American leaders were best able to lead the response against the anti-democratic actions of Nicolás Maduro, the president of Venezuela. And he said he had seen little change in Cuba since Miguel Díaz-Canel took over as president from Raúl Castro.
“It’s true his last name is not Castro, but you wouldn’t know it from looking at his policies and plans,” Pompeo said, adding, “We still have a lot of work to do.”