Donald Trump’s administration is prepared to abandon many of the “fundamental World Trade Organization rules” that are currently in place, according to a leaked document obtained by Axios.
While the bill is still in draft format, it highlights the extremes Trump is willing to take in dealing with what the President considers an unfair trade balance between the United States and the rest of the world.
The “United States Fair and Reciprocal Tariff Act,” would allow Trump to consolidate his power and negotiate one-on-one with any country of his choosing.
Axios highlights two parts of the current agreement Trump wants to destroy:
- The “Most Favored Nation” (MFN) principle that countries can’t set different tariff rates for different countries outside of free trade agreements;
- “Bound tariff rates” — the tariff ceilings that each WTO country has already agreed to in previous negotiations.
This news isn’t exactly surprising. Trump has already attacked individual countries, raising 25% steel and 10% aluminum tariffs on Canada, Mexico, the EU, and China. Trump’s early moves have led to a trade war that has severely diminished the market price of soybeans while simultaneously increasing production costs for thousands of U.S. produced goods.
Trump’s attempts to negotiate directly with countries have also fallen on deaf ears. Canada over the weekend (on Canada Day), issued $13 billion in tariffs on product categories that mostly target souther Trump-supporting states. China has also issued $50 billion in tariffs on 545 product categories.
President Trump is now attempting to renegotiate the North American Free Trade Agreement (NAFTA) and has promised to come down on vehicle manufacturers doing business across both U.S. borders. In response to his attacks, GM has already announced plans to possibly layoff workers while moving facilities overseas.
We’ve already started to see the fallout of Trump’s policies with Harley Davidson announcing plans to move at least part of its Wisconsin production to an overseas facility.
Axio has published the full draft of Trump’s WTO plan which you can read HERE.