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Trade Nominee Says US Needs to Employ New Tools to Deal With China

The U.S. Trade Representative nominee said the U.S. must be more “imaginative” when dealing with trade issues related to China.

During his confirmation hearings on Tuesday Robert Lighthizer expressed his belief in President Trump’s America First agenda, which is designed to bring jobs back to the U.S. and boost the economy. Thus far, Trump’s plan has centered around reexamining trade agreements and possible tariffs on some foreign-made goods, especially those originating in China.

Asked about how he’d handle China, the former deputy U.S. Trade Representative said he thinks the U.S. needs to be more proactive and creative.

“I believe [the President] is going to change the paradigm on China and, if you look at our problems, China is right up there,” Lighthizer said.

Starting with the country’s handling of its currency, which Lighthizer, who headed up international trade at law firm Skadden, Arps, Slate, Meagher & Flom, said has historically been an issue.

“It is my judgement that China was a substantial currency manipulator, and I think we lost a lot of jobs because of it,” he said, while also noting that China isn’t the only culprit.

Ultimately though, Lighthizer said he’d leave it up to the treasury secretary to determine if the practice is still employed there.

Senators then asked what he would do with regards to China’s industrial policies, such as its over production in steel which U.S. firms claim depresses prices. To that, the nominee said the U.S. has to find ways to “encourage” Beijing to reduce capacity, which would include enforcing our trade laws and enlisting other countries to do the same. Ultimately, he said dealing with the problem will take “imaginative solutions” and a direct approach.

When asked how the World Trade Organization fits into Lighthizer’s arsenal, he said the trade body is one of many tools that could be employed.

“I don’t believe that the WTO is set up to deal with China and their industrial policy,” he said. “I just feel it was never really intended to deal with those kind of situations. So we have to use the tools we have and then I think we have to sit down with members and find a responsible way to deal with the problem by creating new tools.”