Trump's 'bark has been worse than his bite' on trade
He argued in favor of ripping up trade deals, focusing his ire on China and Mexico, and said NAFTA was "the worst trade deal in the history of the country."
Since his inauguration, he has maintained strong rhetoric against "very unfair" trade practices. However, the Trump administration's actions against trading partners have not yet been as extreme.
"Trump's bark has been worse than his bite," said Neil Shearing, the chief emerging markets economist at Capital Economics, at the firm's Annual Conference in New York on Wednesday.
Trump originally pledged to label China a currency manipulator on his first day in office - he did not. Neither did the Treasury Department in its semi-annual report on currency practices of major trading partners, which was published in April 2017.
It's likely that Trump pulled back on calling China a currency manipulator given the delicate situation with North Korea, which he implied in an interview with The Economist published in May:
Moreover, although the Trump administration formally launched NAFTA negotiations last month, it seems that the focus will be more on smaller tweaks than a massive overhaul.
US Trade Representative Robert Lighthizer said in his letter to US lawmakers triggering the negotiations that NAFTA needed modernization for digital trade; intellectual-property rights; labor, environmental, and food-safety standards; and rules for state-owned enterprises.
And more recently, Trump shifted his anti-trade rhetoric towards South Korea and Canada, instead.
As you can see in the dotted bubble, although the survey data is down in recession levels, there hasn't been a corresponding drop in economic growth.
Of course, none of this means that the president's anti-trade agenda is over, especially given that some American workers have been hurt by trade deals.
"Trump needs to win on trade to satisfy his base," Shearing added at the end of his presentation.
"And the fact that a nationalist-populist [appears to be] the favorite to win the presidential election in Mexico next year could further complicate the process of renegotiation."