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Lighthizer Appointment as USTR Confirms US Trade Policy Shift
Global Trade Review AMERICAS / 04-01-17 / by Melodie Michel
US president elect Donald Trump has nominated Robert Lighthizer, a famously protectionist lawyer, as US trade representative (USTR), confirming his intention to fulfil his campaign's anti-trade promises.

This is the last appointment in Trump's trade team, after Jason Greenblatt was named special representative for international negotiations, Peter Navarro as head of the newly-created National Trade Council, and Wilbur Ross as commerce secretary. Several members of this team have led anti-China and anti-trade efforts in the past: Lighthizer was involved in hiking tariffs against Japan as deputy USTR under Ronald Reagan, and Navarro has penned a book called Death by China.

A political analyst who preferred to remain unnamed tells GTR: "You're starting to see a real tendency here. Ross is the only one that we've seen so far that is a moderate on trade and even he shifted in the last two years, getting closer to Trump's policy. The big question is, how does this protectionist policy get implemented?" With each trade appointment, the likelihood of trade tariffs being imposed on China has grown, and today this is a very probable scenario.

"Companies should begin to look at hedging: how easy would it be to move facilities away from China, not back to the US, but maybe to Indonesia, Vietnam, Thailand or Malaysia etc. It's not easy because of the supply chain but at least you have to have a contingency plan in place. Things could start to get substantially more expensive," GTR's source says.

As the possibility of tariffs against China grows, so does the idea that the US could withdraw from the World Trade Organization (WTO) - one of Trump's more far-fetched threats during the presidential campaign. "The odds of tariffs against Chinese goods are especially high now. The problem is that these directly contradict WTO commitments. One point I'm starting to raise with clients is that there's the potential here that he?s going to pull the US out of the WTO. It's unlikely but it's starting to grow in likelihood," the analyst adds, placing the odds of it happening at 20%.

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Related News: Trump confirms TPP withdrawal as top priority
HSBC: protectionism will hit trade with US$1.2tn loss; Trump braces WTO for new era of trade war

Trump's Deportation Vow Spurs California Farmers into Action
Sacramento Bee - January 4, 2017 - by Scott Smith, Associated Press, Fresno, California
Days after Donald Trump won the White House vowing to deport millions of people in the country illegally and fortify the Mexican border, California farmer Kevin Herman ordered nearly $600,000 in new equipment, cutting the number of workers he'll need starting with the next harvest. Herman, who grows figs, persimmons and almonds in the nation's most productive farming state, said Trump's comments pushed him to make the purchase, larger than he would have otherwise.

A California farmer says Donald Trump's campaign vow to deport millions of immigrants who are in the country illegally pushed him into buying more equipment, cutting the number of workers he'll need during the next harvest. Others in California's farming industry say Trump's tough campaign talk targeting immigrants in the country illegally, including a vast number of farmworkers, spurred them into action, too. "No doubt about it," Herman said. "I probably wouldn't have spent as much or bought as much machinery as I did."

Others in California's farming industry say Trump's tough campaign talk targeting immigrants in the country illegally - including a vast number of farmworkers - spurred them into action, too. They're calling on congressional representatives to educate the incoming president on the workforce it takes to feed the country, and they're assuring workers they'll protect them. San Joaquin Valley farmer Joe Del Bosque recently gathered about 20 year-round employees at a Los Banos steakhouse for their annual holiday lunch.

The festivities began in a serious tone. The topic of immigration took a bigger part of the conversation this year because of Trump, he said. Del Bosque told his crew he'll make sure the new administration knows their vital role in the farming industry. It's a message Del Bosque wants his managers to spread to another 300 seasonal workers needed at the harvest's peak.

Leticia Alfaro, a food-safety supervisor at the farm, said in an interview that many of her friends who work in the fields don't have proper documentation like her, and they take Trump's threats seriously. "They're terrified by his comments," Alfaro, 53, said in Spanish. They fear being deported and torn from their children who were born here, she said. After Trump takes office, they wonder if it will be safe to make a simple trip to the grocery store, fearing checkpoints where they'll be pulled over and have to show their documentation.

Trump's remarks were felt sharply in California, which produces nearly half the country's fruits, vegetables and nuts valued of $47 billion annually. Experts say his words resonate nationwide. Texas, Florida and Georgia are examples of states with large migrant communities dominating home construction, health care, food service industries, said David Zonderman, a labor historian at North Carolina State University. "California might be ground zero," he said of immigrant families living in the shadows. "But it's not a unique California issue."

The fear stems from Trump's campaign rallies, where he received a rousing response each time he vowed to deport people who are in the country illegally - up to 11 million. That position softened after Trump won the election, when he said he'd start with 3 million with criminal records. Some farmers point to Trump's postelection shift as a sign his campaign bluster won't become reality. He is, after all, a businessman like them, they say. But others believe this shift underscores the president-elect's unpredictable nature.

"Our workers are scared," said Joe Garcia, a farm labor contractor who hires up to 4,000 people each year to pick grapes from Napa to Bakersfield and along the Central Coast. "If they're concerned, we're concerned."
Since Election Day, Garcia's crews throughout the state have been asking what will happen to them when Trump takes office. Farmers also are calling to see if they'll need to pay more to attract people to prune the vines, he said. Garcia tells farmers not to panic. They'll learn how many return from Mexico after the holidays. "We'll plan around what we have," he tells them. "That's all we can do."

Roughly 325,000 workers in California do the back-breaking jobs that farmers say nobody else will do, according to the U.S. Bureau of Labor Statistics. Manuel Cunha Jr., president of the Nisei Farmers League farming association, estimates 85 percent of California farmworkers live in the United States illegally. Farmers for years have scrambled under a shrinking labor pool. Mexico's improving economy has slowed the flow of migrant workers. The dangerous border, controlled by drug cartels and human traffickers, keeps away others.

Herman said Trump influenced him on top of California's rising minimum wage and a new law giving farm laborers overtime rights that are equal to workers in other industries. Plus, Herman said, he's heard too many workers question whether they'll return from their holiday trips to Mexico. "It's stories like that that have motivated me to become efficient and upgrade my equipment," Herman said.

Tom Nassif, a Trump adviser and president of the powerful trade association Western Growers, said farmers shouldn't fear the president-elect. Trump isn't interested in deporting their workers, he said. Nassif said he isn't privy to the details of Trump's immigration policy. He's recommended that Trump allow farmworkers to stay by putting immigrants in the country illegally who are otherwise law-abiding residents on a period of probation under conditions that they pay taxes, learn English and obey all laws. "I think he's looking at people who have committed more serious crimes and start with them first - and rightly so," said Nassif, picked by Trump's campaign team to serve on an agriculture advisory committee.
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Asian Nations Attempt to Assess the Implications of President-elect Trump
U.S. Dairy Export Council - by Margaret Speich, January 3, 2017
Uncertainty and instability continues as Asian nations attempt to assess the implications of President-elect Trump's victory and every appointment to his administration. His recent appointment of China hawk Peter Navarro to run a new White House trade policy office has alarmed Beijing, especially when combined with Trump's recent rhetoric about Chia.

Since his phone call with Taiwan's President Tsai Ing-wen, Trump has publicly criticized China's currency policies and island fortifications in the South China Sea. He also has questioned Washington's commitment to the One China policy, and angered Beijing by alleging that a Chinese warship had "stolen" a US Navy submarine drone, which was later returned.

EXIM Bank Releases its FY 2016 Annual Report
Export-Import Bank of the US, Washington, DC - January 6, 2017
Today the Export-Import Bank of the United States (EXIM Bank) released its Fiscal Year 2016 Annual Report highlighting its support of more than $8 billion in US exports and an estimated 52,000 US jobs. It also announced it has transferred $284 million in deficit-reducing receipts to the US Treasury's General Fund for fiscal year 2016.

EXIM Bank is a self-sustaining federal agency and operates at no cost to the taxpayers. Since 2009, EXIM has sent nearly $3.8 billion of surplus to the US Treasury for deficit reduction. In the last decade, EXIM has supported more than 1.7 million jobs in all 50 states. "The Bank is proud of its 2016 performance in leveling the playing field for US exporters who must compete with foreign state-backed companies around the globe for important sales," said Fred P. Hochberg, EXIM chairman and president. "It is now more crucial than ever to leverage EXIM's capabilities to stimulate US exports abroad and bolster US jobs at home."

Among the highlights in the 2016 Annual Report are the following:
* EXIM authorized $5 billion supported $8 billion in exports at no cost to American taxpayers.
* EXIM supported 52,000 American jobs.
* Small business authorizations continued to represent nearly 90 percent of all EXIM authorizations.
* EXIM sent $284 million to the U.S. Treasury for debt reduction.
* EXIM Bank had a default rate of 0.266 percent as of September 30, 2016

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tradeinfocus is a summary of news and events on the trade policy front for clients, trade & legislative colleagues, and professional friends of W.J. Byrnes & Co.