Trump Mixes Economic and National Security, Plunging the U.S. into Multiple Fights

WASHINGTON — President Trump is increasingly blurring the line between America’s national and economic security, enabling him to harness powerful tools meant to punish the world’s worst global actors and redirect them at nearly every trading partner, including Mexico, Japan, China and Europe.

Over a few weeks, Mr. Trump has declared European and Japanese cars, Chinese telecom equipment and Mexican immigrants national security threats. Those declarations have given the president authority to use Cold War powers to inflict economic pain on countries through tariffs, government blacklists and other restrictions.

While previous administrations tried to deal with economic and security threats separately, Mr. Trump has deliberately mixed the two, viewing another country’s trade practices as dangerous to the United States as its military abilities.

It is a view he has espoused since the 2016 campaign trail, where he pushed his “America First” agenda and vowed to protect companies that he believed were on the losing end of global trade. Once in office, Mr. Trump immediately pulled the United States out of the multinational Trans-Pacific Partnership and initiated investigations into imported goods, like washing machines and solar panels, that he believed were flooding the American market.

His approach has grown more aggressive over the past two years, culminating in an expansive view of national security that has plunged the United States into an economic war with nearly every trading partner, including longtime allies.

Mr. Trump threatened to invoke emergency powers created in 1977 to impose tariffs on Mexico, making him the first president to aim at a close ally a law traditionally used to impose economic sanctions on foreign adversaries for terrorism and other wrongdoing.

He has made heavy use of a 1962 provision that allows him to clap tariffs on imports that are found to pose a national security threat, most recently declaring cars from Europe and Japan a risk to America.

And the administration has turned to a Cold War playbook with China, blacklisting companies like the telecom giant Huawei from buying American products and drawing up new restrictions on the types of technology — like biotech and high-performance computing — that can be exported overseas.

“To this administration, everything is about national security,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “Everything they can put their hands on falls under that framing. They use it as an excuse to impose tariffs in ways that would otherwise violate trade rules.”

Mr. Trump says the approach is a response to years of failed diplomacy that did nothing to stop jobs, manufacturing ability and innovation from leaving the United States. His administration argues that the erosion of American industries presents a direct threat to the United States’ future.

“We are reasserting these fundamental truths: A nation without borders is not a nation,” Mr. Trump said as he unveiled his national security plan in December 2017. “A nation that does not protect prosperity at home cannot protect its interests abroad.”

“Economic security is national security,” Peter Navarro, the White House trade adviser, said in November 2018 in a speech in Washington. “And if you think about everything the Trump administration has been doing in terms of economic and defense policy, you understand that this maxim really is the guiding principle.”

Critics say the strategy is allowing the Trump administration to make an end run around trade rules meant to prevent the United States and other countries from ratcheting up barriers and falling into endless trade wars. Rules set by Congress and the World Trade Organization carve out wide latitude for presidential action based on national security, letting the administration erect economic barriers that it would otherwise be restricted from building.

But equating economic security with national security carries risks, including straining relations with foreign governments and turning already contentious issues — like trade practices — into intractable disputes.

Republican lawmakers and business groups are increasingly warning about the administration’s approach, saying that lumping tough, disparate issues together will chill relations with other governments and put American companies at a disadvantage. While many lawmakers are generally supportive of Mr. Trump’s punishing approach to China, they have been outspoken against imposing penalties on allies like Japan, Canada, Mexico and Europe, saying it will hurt American companies — whose supply chains crisscross borders — and create bigger security problems down the road.

Earlier this year, Mr. Trump declared a state of emergency at the southern border with Mexico. And late last month, Mr. Trump seized threatened tariffs of up to 25 percent on all Mexican goods.

On Friday evening, Mr. Trump said on Twitter that his approach had worked and that the tariffs would be “indefinitely suspended” because Mexico had agreed to take steps to “stem the tide of Migration.”

The agreement, laid out in broad strokes in a one-page document from the State Department, said that Mexico had agreed to deploy its national guard throughout the country to stop migrants from reaching the United States and to expand a program that makes some migrants seeking asylum in the United States wait in Mexico while their claims are processed.

Mr. Trump was the first president to threaten tariffs using the emergency powers act and the first to invoke it to punish a close ally like Mexico. The law, an outgrowth of the Trading With the Enemy Act, was used during the Cold War to impose economic sanctions on the Soviet Union. Presidents have made increasingly broad interpretations of the act since the 1990s: George Bush declared an emergency on the proliferation of chemical weapons, while George W. Bush declared one because of the threat of terrorism. Barack Obama used the law to take on transnational criminal organizations and cybertheft.

A Huawei campus in Dongguan, China. Mr. Trump recently added Huawei, a telecom gear maker, to an Entity List.CreditJason Lee/Reuters

Mr. Trump’s use of its powers threatened to rupture the United States’ longstanding economic relationship with Mexico and destroy any chance to ratify the new United States-Mexico-Canada Agreement, or U.S.M.C.A. That pact, which already faced long odds of passage in the Democrat-controlled House, is critical to the economies of all three countries and to United States automakers, who have built supply chains across North America. Republican lawmakers said Mr. Trump’s tariffs would probably kill the U.S.M.C.A. because Mexico would be in no mood to approve the agreement.

Tensions over Mr. Trump’s approach are also rising with Europe, Japan, South Korea and other allies, whose exports of metals and cars into the United States have been labeled a national security threat. Mr. Trump has imposed or threatened tariffs using a Cold War law, Section 232 of the Trade Expansion Act of 1962, which was passed to give President John F. Kennedy the ability to impose tariffs to try to counter the economic threat of the Soviet Union.

Previous administrations have used the rule in a targeted way, like curbing petroleum shipments from Iran. But the Trump administration has used the law to put sweeping tariffs on steel and aluminum from dozens of countries worldwide and has threatened to do the same for other products, most notably imports of cars and car parts.

On May 17, Mr. Trump issued a proclamation saying auto imports threatened to impair the national security of the United States and would be subject to tariffs in six months if trade agreements could not be reached.

In language reminiscent of an era before globalization resulted in Americans driving Toyotas and Hondas as well as Fords and Chryslers, the proclamation declared that “American-owned” automotive research, development and manufacturing are “vital” to national security and that “domestic conditions of competition must be improved by reducing imports.”

The auto industry, foreign governments and lawmakers have criticized the linkage of cars with national security, arguing that it strains relations with allies who are important to the United States’ defense. Mexico, Japan, Canada, Germany and South Korea were responsible for more than 85 percent of all American automotive imports in 2018.

“In the past, we’ve used trade sanctions as a way of trying to punish or discipline other countries when they’ve violated a particular norm,” said Douglas Irwin, a trade historian at Dartmouth College. “But deliberately going after European allies over autos, where the domestic auto industry does not want protection, seems like a needless antagonization.”

While Mr. Trump may want to revive domestic manufacturing, the days of all-American cars are largely gone. About half of the cars sold in the United States are imports. Of those that are made in America, about 40 percent to 50 percent of their components are manufactured abroad, with about half of that total coming from Canada and Mexico, said Kristin Dziczek, a vice president at the Center for Automotive Research, an industry research group.

Big automakers now manufacture their cars around the world, regardless of where their brands originated. General Motors’s largest market for cars is China, while Toyota and BMW are major employers in America.

The Trump administration is facing challenges in court and at the World Trade Organization over its use of national security provisions. The Supreme Court will review a case challenging Section 232 authority this month.

Where Mr. Trump’s equating of national and economic security has provoked less concern is with China. While the president’s decision to slap tariffs on $250 billion worth of Chinese goods has created economic pain for American companies and consumers, lawmakers and many industry groups have gone along with the idea in the hopes that economic pressure would force China to change trade practices that have long disadvantaged American businesses.

But the president has continued to ratchet up the pain, using arcane measures generally reserved to combat terrorism and nuclear proliferation to punish Chinese companies. China, in turn, has threatened to do the same to American companies, deepening an economic war that shows no signs of abating. Talks between the two countries collapsed last month, and a deal to resolve what Mr. Trump calls “unfair” trade practices no longer seems within easy reach.

Last month, Mr. Trump added the telecom gear maker Huawei to what is known as an Entity List, which effectively cuts the company off from buying American technology. The president had previously placed two other big Chinese companies — the telecom giant ZTE and a memory chip maker, Fujian Jinhua Integrated Circuit — on the list and is now considering adding HikVision, a Chinese video surveillance giant.

Placement on that list can cripple a company given most rely on inputs from around the globe, including American technology. In 2018, just a month after being added to the list, ZTE was forced to cease major operations, while Fujian Jinhua Integrated Circuit shut down production.

“The Entity List is reserved for our most dangerous opponents,” said James Lewis, a senior fellow at the Center for Strategic and International Studies. “It used to be you had to be a terrorist supporting nation or a proliferator, so this is a new chapter.”

On Friday, the Chinese Commerce Ministry said it was putting together a list of foreign companies and individuals it considered “unreliable,” a response to the American move to blacklist Huawei. The Chinese government also summoned major tech companies from the United States and elsewhere to warn that they could face steep consequences if they cooperate with the ban, The New York Times reported on Saturday.

Huawei’s chief legal officer, Song Liuping, said Wednesday at a news conference that the move created a long-term risk for all companies.

“We believe this sets a dangerous precedent,” Mr. Song said. “Today it’s telecoms and Huawei. Tomorrow it could be your industry, your company, your consumers.”

So far, the Trump administration and its allies remain unfazed.

Stephen K. Bannon, the president’s former chief strategist, said that Mr. Trump had purposefully turned China’s reliance on the American market into a weapon in his trade war.

“The Trump administration has taken an aggressive approach to the economic war China has waged against America,” Mr. Bannon said. “He now has them staring up a double barreled shotgun. One barrel is technology, the other is our capital.”

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