“American companies and politicians have long accused foreign counterparts of violating trade laws and securing illegal competitive advantages.”
2017 saw more lawsuits brought against foreign companies for allegedly violating international trade laws than any year in over a decade. Since January of 2017, 23 trade disputes have been filed against foreign companies operating in 29 different countries. White House officials have claimed that this spike in lawsuits is because the Trump administration is “enforcement-minded.”
Commerce Secretary Wilbur Ross is on record stating:
“At President Trump’s direction, we have told American businesses that we will be more enforcement-minded than any recent administration, while also remaining committed to a fair and transparent process that is professionally and impartially implemented.”
American companies and politicians have long accused foreign counterparts of violating trade laws and securing illegal competitive advantages. If companies and governments are actually doing so, they may be able to push American companies out of business through unfair advantages and market distortions.
Complaints have been common, but lawsuits less so. Trade laws are immensely complex; collecting reliable data can be difficult. Difficult legal cases are often expensive legal cases. Companies have been hesitant to pursue them owing to the costs and the uncertain rewards. Given this, it’d make sense for signals of support from the White House to spur lawsuits.
“They know we will stand with American workers in the face of unfair trade practices.” -Commerce Secretary Wilbur Ross
Many of the companies pursuing trade suits are struggling Rust Belt steel plants and American farmers. As these companies struggle, the blue collar workers they hire struggle as well. America has seen a dramatic decline in manufacturing sector employment since the turn of the century. In 2000, roughly 17 million Americans worked in manufacturing. By 2017, only 12.4 million were employed.
Most Americans unaware that as US manufacturing jobs have disappeared, output has grown
While outsourcing has certainly played a role in the dramatic decline of employment in manufacturing, automation is also playing a big (bigger?) role. The American manufacturing sector is now producing more than it has in many years. However, much of what’s being produced is being produced by robots.
Companies Want to Cash in on Hot Economy
Right now, the global economy is hot. We can debate whether that’s due to actions by President Trump, the previous Obama administration, or other factors. However, for companies the reality is simply: the iron is hot, now is the time to strike.
Business cycles are filled with booms and busts. The economy will suffer a downturn in the future. This is all but inevitable. Whether that means next year, 2020, or 2024, nobody actually knows. For companies, it’s important to cash in while the global economy is expanding.
However, market distortions and unfair trade advantages can bury would-be competitive companies even when the economy is hot. As such, many American business leaders are pushing for stronger enforcement of trade laws and regulations. Meanwhile, President Donald Trump made trade war rhetoric a main part of his campaign. So far, his administration has continued to pursue this more hard-lined stance.
We may see even more lawsuits. Currently, lawsuits are typically initiated by companies rather than the government. Once initiated, the United States International Trade Commission reviews cases and decides what to do. Some administration officials are pushing for unilateral lawsuits and more government initiative. This would shift the legal burden of such lawsuits from companies to the government.
