Trump’s 2018 trade deals might bring reverberations, good and bad, to the West Coast

For all the bluster and fulminating on the campaign trail and through the first year of the new administration about trade deals, imports and the state of the American economy, 2017 played out in fairly conventional terms.

In other words, a lot of bluster and fulminating and a few cases resulting in imposition of duties but no huge trade-war-triggering decisions and no significant movement on negotiating or renegotiating big trade deals.

But this is 2018, and things might look, and sound, a little different.

It might not have looked like an uneventful year here in the Northwest, which found itself ensnared in multiple trade disputes involving Northwest products, companies and industries: Softwood lumber. Newsprint and office paper. Solar-energy panels. Passenger jets.

Two of the disputes of regional interest spilled into 2018 with decisions of note. First, North Pacific Paper Co. in Longview won a preliminary ruling from the U.S. Department of Commerce that Canadian producers of uncoated, groundwood paper received subsidies. The government imposed countervailing duties averaging 6.53 percent.

Norpac, which has 400 employees, said in a statement that the decision could eventually lead to a restart of idled paper-making capacity in the United States. But the case still has to wend its way through the trade-case review process, and there is opposition to the ruling and the duties, from some U.S. newspaper publishers who have objected to increased prices for newsprint.

Meanwhile, the Trump administration approved a recommendation from the U.S. Trade Representative to impose tariffs on imports of solar cells and modules, mainly from China. Those tariffs begin at 30 percent in the first year, declining to 15 percent in the fourth year.

That’s a decision to be welcomed by the U.S. solar-panel manufacturing industry — or what’s left of it.

Because of a flood of imports and a sharp decline in prices, “The U.S. solar industry had almost disappeared, with 25 companies closing since 2012,” the trade representative’s office said. “Only two producers of both solar cells and modules, and eight firms that produced modules using imported cells, remained viable. In 2017, one of the two remaining U.S. producers of solar cells and modules declared bankruptcy and ceased production.”

Here again, the decision to slap tariffs on solar-panel imports isn’t being met with universal acclaim. Installers of solar-energy systems like the lower prices for panels because it makes the financial calculations for consumers and businesses more attractive, thus driving business.

The outcome of the case has ramifications for Washington, which has several manufacturers of solar-system components and electronics, as well as a huge chemical refinery in Moses Lake that makes a raw material — polysilicon — used in the manufacturing of solar cells.

REC Silicon’s prime market is China, and, when the United States clamped down on imports of solar cells in a previous case, China retaliated with restrictions on imports of polysilicon. That led to layoffs and production cuts at the Moses Lake plant.

Employees at REC Silicon recently signed a letter asking the Trump administration to negotiate some sort of comprehensive deal with China that settles all parts of the solar cell-polysilicon dispute.

But doing so will be a tricky proposition because any dealing with China involves so many economic and geopolitical elements. Will China continue to buy U.S. debt? Can China be persuaded to rein in North Korea or play nice with other Asian countries? Will China be allowed to buy American companies, especially those with national-security implications?

The Trump administration has to balance those considerations with its own domestic political concerns.

Impatience is growing among those who backed Trump for the promise of a more aggressive trade policy. They particularly want to see some action on steel (not a huge presence in the Northwest, but we have some) and aluminum (Washington has two smelters, one operating, one idled). With congressional elections looming later this year and its political support tenuous at the moment, the administration may feel compelled to fulfill the rhetoric with specific trade measures, including duties and tariffs (mindful, of course, that every trade case, however it’s resolved or isn’t, creates winners and losers in the domestic economy).

But trade, by its very nature, is not a unilateral deal. Those pushed may push back, as the Canadians did when Boeing got the federal government to slap duties on Bombardier planes sold in the United States. Canada and Mexico seem disinclined at the moment to rework NAFTA, nor does China feel the need to agree with whatever the United States asks for.

Meanwhile, 2018 could be a prime year for other countries and trade blocs such as Europe to take a whack at U.S. tech companies like Google, Facebook and Amazon, which are seen as too big, too powerful and too American.

All that promises to make 2018 a busy, and noisy, year for trade disputes. We may be way out here on the opposite coast from where those decisions will be made, but given our ports and our globally influential companies and products, whatever the dispute, we’re likely to be right in the thick of the consequences.

This story was originally published January 27, 2018 at 8:00 AM with the headline "Trump’s 2018 trade deals might bring reverberations, good and bad, to the West Coast."