Every week the news cycle seems to deliver a brand new bombshell, followed by panic and endless commentary decrying a nationalist shift in U.S. policy positions. Trade policy provides a prominent example. Though it is exciting to see broader interest in the trade debate, the tendency to declare every little thought or action taken by the administration or by U.S. trade partners as a sign of a trade war is getting a little out of hand. Like the boy who cried “wolf,” the media’s incessant “trade war” refrains are losing credibility. Yes, there are trade disputes. There is trade conflict. And, perhaps, there are even trade skirmishes. But when every little administrative action or tweet is treated as part and parcel to “war,” it gets difficult to take the reporting seriously.
For instance, recent reports that the Canadian government thought the Trump administration was planning to withdraw from the North American Free Trade Agreement (NAFTA) caused immediate shock, riling North American markets, despite the fact that the reports were mere speculation. Moreover, the rumor was based on something President Trump has been saying all along: If a deal that favors the United States can’t be reached, he would withdraw from NAFTA. (That’s a position not too different from those mouthed by Barack Obama and Hillary Clinton on the campaign trail in 2008). Yes, it’s true that the 6th round of NAFTA talks is scheduled to begin January 21st, and many are nervous about its outcome. However, it is also true that every round has been touted as the “tipping point” in the negotiations. But just this week, President Trump suggested that he was open to continuing negotiations until after the elections in Mexico this summer. Those don’t sound like the words of someone preparing to kill NAFTA anytime soon.
In addition, there have been a number of needless alarm bells rung regarding a recent action by Canada at the World Trade Organization (WTO). On January 10, Canada requested consultations with the United States regarding certain aspects of U.S. trade remedy laws. U.S. Trade Representative Robert Lighthizer called the action, “a broad and ill-advised attack on the U.S. trade remedies system,” and others suggested that the action was an unnecessary provocation by Canada that could threaten to derail the NAFTA talks.