Lighthizer
US President-elect Trump has asked Robert Lighthizer to run trade policy once again, according to the FT.
The report says Lighthizer had been asked to return to the top trade role even though he had lobbied for a different position, including commerce secretary and Treasury secretary. It’s not clear if he’s accepted the offer but the news shouldn’t come as a surprise as he is tightly aligned with Trump and he was one of the few high-ranking officials that didn’t have friction with Trump.
The report also says Linda McMahon will likely be offered the job of commerce secretary.
The market might take this as a sign of ‘business as usual’ for a second Trump term, though Lighthizer and Trump are both inclined to ramping up leverage even higher on trading partners.
Here is what Lighthizer wrote in his book:
Finally, we could achieve balanced trade by imposing tariffs on imports. We could put tariffs on all imports at a progressively higher rate year after year until we achieve balance. Once we have balance, we could lower the tariffs down to the lowest level that maintains that balance. This approach would effectively offset the overvaluation of the dollar and other systemic unfairness abroad. Personally, I would accept any of these three options, but I have a preference for tariffs because they’re simple to implement, it’s easier to predict what will happen, and the mechanism is already in place to collect the duties. Tariffs also would help reduce our chronic fiscal deficit by raising government customs revenue.
The policy agenda I have set forth above is, admittedly, quite ambitious. And I do not propose that Congress implement it immediately. It will have to be done carefully over a period of time. The most urgent priority should be strategic decoupling from China.
The market continues to shrug off the threat of tariffs, including on China, which I find unwise.