Recently, President elect Donald Trump announced his choice to be the nations new US Trade negotiator. I dont think it was an accident that he also put GM on notice (via Twitter) for importing Mexican made cars the same day.
To paraphrase Eddie Murphy in 48 hours, theres a new sheriff in town, and his name is ….Robert Lighthizer
If Lighthizer is confirmed by the Senate, this will be a critical position for people to watch in the Supply Chain industry, and the trickle down effect of trade deals.
The days of free trade with China without some sort of taxation or tariffs are over.
Mr Lighthizer has been a long time advocate for increasing tariffs from anyone outside of the United States, and he will be able to weild a very mighty sword in negotiatons with countries that move alot of goods into the United States (China being by far the #1 on the list).
What does this mean for John Q Public?
My guess is that the goods of goods will go up (marginally), and the HOPE is that more jobs come back to the US.
More likely than not, there will be some concessions made from the Chinese as they cannot afford to lose the manufacturing volume, and more importantly their biggest customer.
The volumes of import containers from China to the US I think will go down slightly, but they will still be the biggest exporter into the US for the forseeable future.
The interaction with the Chinese right out of the chute in the opening 100 days will set the tone on how the relationship will evolve.
Mr Lighthizer is a lawyer, and cut his teeth with the Reagan administration back in the 80’s, so he knows how the game is played.
The game of chess between China and the US starts soon, so watch the opening gambit of the TRUMP/LIGHTHIZER team – will be very very interesting!