First, buy American. According to the American Recovery and Reinvestment Act of 2009 signed by President Obama, any public works project funded by the new stimulus package must use steel and other manufactured goods produced in the US, with a few exceptions. Due to the provision’s obvious violation of the WTO rules, the US later added that it must be applied in a manner consistent with US obligations under international agreements, which many states have failed to follow in actual implementation.
Second, unilateral tariff barriers. According to the WTO provisions on anti-dumping and countervailing, when an imported product is ruled to be dumping or subsidized for lower-than-normal prices, the importing country can charge anti-dumping or countervailing duties on the particular product. However, the US hasn’t complied with the rule when imposing unilateral tariffs on steel and aluminum products from abroad. With no evidence that imported steel and aluminum products were subsidized or constituted dumping, the US government imposed tariffs to raise costs for imported products in order to protect local businesses. The unilateral tariffs imposed by the Trump administration on $250 billion of Chinese products are an example of government interference in competition, because Washington has no evidence of Chinese products being dumped or subsidized. The US government artificially increased the costs of Chinese products by 10 to 25 percent to weaken their competitiveness in the US market.
Third, agricultural subsidies. While the US often accuses other governments of subsidizing companies, its own practice in the agricultural sector shows what subsidies really are. The US Department of Agriculture usually determines the target prices of agricultural products prior to the actual harvest. When market prices are higher than the target levels, farmers take the revenue. When market prices are lower than the target levels, the agricultural department pays subsidies to make up for the price difference. Therefore, US agricultural products are very competitive in the international market.
During the 10th WTO ministerial conference held in Nairobi, Kenya in December 2015, ministers committed to abolishing export subsidies for farm exports. The move was considered a historic achievement as it ended the biggest distortion in the market. However, the Trump administration didn’t actually execute it, so the competition in the international agricultural market is still not equal and the US government has failed to maintain a neutral position.
Fourth, direct administrative restrictions. According to the US-Mexico-Canada trade agreement, by 2023, 40 to 45 percent of work on automobiles must be completed by workers earning at least $16 an hour as a measure to shift auto production away from Mexico. Cars are international trade commodities and their trade should be determined by competition, with the government maintaining neutral, but apparently, the US government doesn’t think so. After the renegotiation of the original North American Free Trade Agreement, the phrase “free trade” was noticeably absent from the name of the new pact.