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Jay’s Blog: The Cavalry Has Arrived

By appointing Robert Lighthizer the U.S. trade representative, President Trump confirmed what many expected: that his administration will take a hard pro-American line on trade issues.
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Author: Jay McAninch

Our industry’s manufacturers have suffered frustrating financial losses for several years because of sales lost to knock-offs, near-perfect copies and counterfeits of their products. Losses to the archery industry are in the millions, while estimated losses across all industries exceed $1 trillion, cost about 2.5 million jobs (750,000-plus in the United States), and amount to 5 to 7 percent of all world trade.

As we’ve often discussed, presidents and their administrations set the tone for how American businesses fare when competing or working with foreign companies. The president’s point person on such issues is the U.S. trade representative, a cabinet-level appointee who leads the U.S. Trade Authority. That’s the agency that develops and recommends trade policies to the president, conducts trade negotiations, and coordinates trade policy within the government through the interagency Trade Policy Staff Committee and Trade Policy Review Group.

Trade languished under the Obama administration, as noted by Gary Hufbauer, senior fellow at the Peterson Institute for International Economics. “This has been one of the quietest presidencies for trade policy in the post- [World War II] period,” Hufbauer said. Many believe the past administration’s leadership traded away income and job security for American businesses in exchange for promoting the interests of American investors while also increasing the complexity of trade deals by prioritizing environmental concerns like climate change and human-rights issues. Balanced trade deals help countries benefit economically while collectively moving toward safer environmental standards and humane working conditions.

President Trump named Robert Lighthizer the U.S. trade representative in early January. Lighthizer is a former deputy U.S. trade representative under former President Ronald Reagan.

By appointing Robert Lighthizer the U.S. trade representative, President Trump confirmed what many expected: that his administration will take a hard pro-American line on trade issues. Bringing jobs back to America, creating trade policies that are at worst balanced and at best tilted toward American business, and protecting American manufacturing and intellectual property represent major shifts from the Obama administration.

Several facets of the Trump administration’s approach will be instrumental in leveling the playing field for U.S. companies. Here are some reasons for optimism:

  • Trump favors bilateral negotiations with strong economic countries, especially China. Multilateral negotiations with many trade partners can work, but get complicated as every country works to secure its priorities. One factor lost in multilateral negotiations is the United States’ significant leverage as the world’s strongest economy. Securing a balanced deal with countries like China can be difficult because it’s so difficult to protect vital rights like intellectual property. I don’t see how anything except one-on-one negotiations can work.
  • Trump also sent China strong messages that the United States will no longer do “business as usual,” a stance many trade experts believe is overdue. Lighthizer has urged more aggressive U.S. positions with China, while the U.S. ambassador to China, former Iowa Gov. Terry Branstad, will “focus on negotiations and not ultimatums.” Others on Trump’s foreign policy team include Peter Navarro, author of “The Coming China Wars” and “Death by China,” who will head the National Trade Council; and Wilbur Ross, Trump’s Commerce secretary nominee. Ross is expected to be confirmed, drawing support from both sides of the political aisle for being a strong America-first trade strategist.
  • The Trump administration’s America-first policy has about 170 of the 500-member Chamber of Commerce companies expecting U.S.-China relations to deteriorate this year, while 250 expect things to be the same. Over 40 percent said they will slow their investments in China because of market access barriers and uncertainty. The administration’s call for greater protectionism and trade barriers, as well as a call for manufacturers to return to America, threatens a Chinese economy that depends on exports.

Companies in the archery industry, of course, know they can’t rely on the U.S. government alone to carry the ball for them on international business issues. After all, archery and bowhunting are a small sector in outdoor recreation’s economy, which is dwarfed by consumer electronics, the technology giants, and the automotive industry – all of whom also struggle with China on intellectual property and other issues.

It’s imperative that companies in our industry contact the offices of their House representative(s) and both U.S. senators, and meet with them to discuss issues they face.

Unfortunately, too many companies in the archery industry don’t work with our government and, worse, don’t engage with the individuals most willing to advocate for their interests. These potential advocates are each company’s Congressional delegation. It’s imperative that companies in our industry contact the offices of their House representative(s) and both U.S. senators, and meet with them to discuss issues they face. Members of Congress all like being re-elected, and the best way to do that is to help ensure companies and businesses in their district and/or state remain profitable. If you arm them with information, they will vote to support your needs, they will contact government officials on your behalf, and they’ll ensure your interests are represented.

Clearly, we have an opportunity to regain some of the losses our industry has endured internationally. And despite the new administration’s pro-business signals, we must take on the responsibility of ensuring our Congressional delegations understand our needs. After that, we must remain cautious and persevere. As we know, actions speak louder than words in business.

We can’t take anything for granted, but at a minimum, expect to see greater support the next four years from the U.S. government in foreign business relations.

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