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Westlake Legal Group > Posts tagged "Lighthizer, Robert E"

Trump Plans More Tariffs for China. You’ll Feel This Round.

Westlake Legal Group 02DC-CHINATARIFFS-01-facebookJumbo Trump Plans More Tariffs for China. You’ll Feel This Round. United States International Relations United States Economy Trump, Donald J Shoes and Boots Prices (Fares, Fees and Rates) Powell, Jerome H Office of the United States Trade Representative National Retail Federation Luxury Goods and Services Lighthizer, Robert E International Trade and World Market Inflation (Economics) Federal Reserve System Economic Conditions and Trends Customs (Tariff)

President Trump announced another wave of China tariffs this week, essentially saying he would impose a tax on nearly all $540 billion in Chinese goods that come into the United States in a year. And this batch could really bite.

The administration carefully tailored previous rounds of tariffs to pinch businesses in ways that most Americans might not notice. But the 10 percent levy on $300 billion of imports that Mr. Trump announced on Thursday, which would take effect Sept. 1, is expected to hit consumers where it hurts. From Apple’s iPhones to school supplies, a broad swath of everyday products are about to get more expensive.

The latest move is likely to prompt companies to submit exclusion requests to be spared from the tariffs, cause the Federal Reserve to rethink its plans for interest rates and inspire fresh retaliation from China that could compound Americans’ economic pain.

Here’s what to expect.

Until Sept. 1, the focus will be on the Office of the United States Trade Representative for a final list of the Chinese products subject to the new tariffs. The items will come from a 76-page list published in the Federal Register in May after Mr. Trump said that he wanted to have more potential tariffs in his quiver if the trade dispute dragged on.

Not every item on the May list will necessarily face tariffs. The trade representative’s office held a week of hearings about the proposed duties and has received comments from businesses around the country hoping for exemptions.

If the tariffs do take effect on Sept. 1, companies will have an opportunity to apply for exemptions. In previous instances, those seeking waivers had to explain why the tariffs would cause them “severe economic harm,” whether the product at issue or a comparable one was unavailable outside China and whether the item was “strategically important” to China’s industrial policy.

Earlier rounds of tariffs mostly focused on industrial goods, but the 10 percent levy announced Thursday is directed squarely at consumer items like clothes, toys and footwear.

That is bad news for, among others, shoemakers and the stores that sell their products, said Matt Priest, the chief executive of the Footwear Distributors and Retailers of America. Less than 1 percent of shoes are made domestically, and China is the source of 70 percent of the goods imported into the United States.

“We’re very concerned this will be a long-term cost baked into what consumers will pay,” Mr. Priest said, adding that he was not expecting exclusions to be made for footwear.

“Nearly every type of shoe is made in China, so there will be impact across the board,” he said. The only exceptions are some high-end leather shoes that are made in Europe.

With some consumer products, the supply comes almost entirely from China, said David French, senior vice president of government relations at the National Retail Federation. He cited umbrellas, electric blankets and toys.

“Trump is feeling very muscular right now,” Mr. French said. “But the next round of tariffs will hit the president’s base particularly hard. The people who voted for him in 2016 felt economically vulnerable. The tariffs will cause job losses and higher prices for everybody but especially his base.”

The most prominent American company bracing for the tariffs is Apple, which typically unveils new products every September.

In a letter in June, Apple urged Robert E. Lighthizer, Mr. Trump’s top trade adviser, not to proceed with any new tariffs. The company warned that such tariffs would hamper its global competitiveness and reduce its contribution to the United States economy. Apple also said that new tariffs would tilt the playing field in favor of its global rivals.

Thus far, Mr. Trump has shown little sympathy for Apple. Last month, after the company filed 15 tariff-exclusion requests, he said that they would be denied and that the company should make its products in the United States.

Should the new tariffs take effect on Sept. 1, they will hit Apple’s phones, watches, MacBooks, iMacs, iPads, AppleTV, keyboards and batteries. The company’s shares fell more than 2 percent on Thursday after Mr. Trump said the new tariffs were coming, and the stock price was still down in afternoon trading on Friday.

Throughout the trade conflict, Beijing has demonstrated a willingness to respond to the Trump administration’s tariffs as proportionately as possible.

On Friday, China’s foreign minister, Wang Yi, said that “adding tariffs is definitely not the correct way to resolve economic and trade frictions.” American officials were waiting to see how China planned to retaliate.

The trade imbalance between the two countries leaves China with limited options for imposing additional tariffs on imports from the United States. Beijing could introduce different kinds of barriers, including surprise inspections, license rejections for American companies or a broadening of China’s “unreliable entities” list.

Analysts have also suggested that China could consider curbing exports of so-called rare-earth minerals to the United States, reinstate a tariff on American cars or continue to shun soybeans from American farmers.

Throughout the yearlong dispute, China and the United States have continued to talk through their disagreements. China’s next move may be to give the silent treatment a try.

The Fed was already laser-focused on the trade war before Mr. Trump’s latest tariff announcement. Officials lowered interest rates this week for the first time in more than a decade, partly because of the uncertainty stoked by the tariffs and the risk that they pose to the economic outlook.

Fed officials do not believe that the tariffs already in place have by themselves hurt growth significantly. But policymakers worry that the extended fight is causing businesses to hold back on investment, which could ultimately hurt the broader economy.

Mr. Trump’s choice to escalate the fight with China puts Jerome H. Powell, the Fed chair, and his colleagues in a difficult position. Their job is to keep the economy operating at an even keel. But by lowering rates, which can help keep growth steady and buttress the stock market, the Fed may inadvertently give Mr. Trump the cover he needs to pursue his trade spats.

Mr. Powell has often said that the Fed would keep its focus on its two statutory responsibilities: sustaining maximum employment and stable inflation.

On the latter point, tariffs offer the Fed a surprise silver lining. They could drive inflation higher if companies raise prices on imported goods. The central bank has tried to coax prices up to, or even slightly above, its 2 percent inflation target — a goal it has undershot for years. Officials might seize on an opportunity to prove that they are ready to accept hotter price gains.

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Trump Sees a China Trade Deal Through a New Prism: The 2020 Election

Westlake Legal Group 10dc-trumpchina-sub-facebookJumbo Trump Sees a China Trade Deal Through a New Prism: The 2020 Election Xi Jinping United States Politics and Government United States Economy Trump, Donald J Sanders, Bernard Protectionism (Trade) Presidential Election of 2020 Navarro, Peter Mnuchin, Steven T Lighthizer, Robert E Kudlow, Lawrence A International Trade and World Market Buttigieg, Pete (1982- ) Biden, Joseph R Jr Bannon, Stephen K

WASHINGTON — When President Trump had finished mocking the field of Democratic presidential candidates at a rally in Florida this week (“Sleepy Joe,” “Crazy Bernie” and “Boot-edge-edge”), he pivoted abruptly to his intensifying trade war with China. The segue was no accident: Mr. Trump is determined to present himself as tougher on the Chinese than any of his potential challengers in 2020.

“Representing us against President Xi of China?” a sarcastic Mr. Trump said of Pete Buttigieg, the young mayor of South Bend, Ind. “That’d be great.” Taking aim at former Vice President Joseph R. Biden Jr. earlier in the day, he said that China had pulled back from a trade deal because it wanted to wait him out and negotiate with a President Biden or “one of the very weak Democrats, and thereby continue to rip off the United States.”

Election-year politics have crept into Mr. Trump’s trade policy.

For months, the prospect of a landmark trade agreement with China has tantalized Mr. Trump. But now, according to analysts and several former aides, his political calculus seems to have flipped. His recent statements suggest he now believes that demonstrating his toughness with the Chinese and walking away from a deal might well put him in a better position politically than signing one.

Imposing new tariffs on China is likely to hurt American farmers, rattle the stock market and possibly damage the economy. But signing an agreement could expose Mr. Trump to attacks by Democrats, particularly if it is perceived as weak. A hard line, on the other hand, would allow the president to cater to his political base while heading off any Democratic attempts to outflank him as the great protector of American workers.

“The days of being soft on China are over,” said Stephen K. Bannon, the former White House chief strategist for Mr. Trump, who shaped the economic message of his 2016 campaign and has warned repeatedly about the dangers posed by China. “Politics now drives the economics.”

Bashing China is a well-worn election-year tactic for both Democrats and Republicans. But Mr. Trump has upended the usual practice by pursuing actions against China that are every bit as aggressive as his campaign messaging. His protectionist instincts defy mainstream Republican orthodoxy and align him more with progressives like Senators Bernie Sanders, independent of Vermont, and Elizabeth Warren, Democrat of Massachusetts.

Mr. Sanders has vowed to label China a currency manipulator — something Mr. Trump had promised to do during his campaign but was talked out of by advisers. And he has criticized Mr. Biden for voting for permanent normal trade relations with China and for saying, during a recent campaign stop in Iowa: “China is going to eat our lunch? Come on, man.”

“It’s wrong to pretend that China isn’t one of our major economic competitors,” Mr. Sanders said in a tweet. “When we are in the White House, we will win that competition by fixing our trade policies.”

Several of Mr. Trump’s current and former aides — including Mr. Bannon and Peter Navarro, his trade adviser — have long argued that being tough with China and never accepting a deal is the right course. They were countered by more mainstream figures like Treasury Secretary Steven Mnuchin and Larry Kudlow, the president’s chief economic adviser, who warned Mr. Trump that a prolonged trade war would buffet both the economy and financial markets.

In recent weeks, however, Mr. Trump’s campaign advisers have also started to echo the no-compromise approach, according to a former official. That, combined with Mr. Biden’s potential political weakness on China, has shifted Mr. Trump’s thinking away from those who urged a deal.

At his rally this week in Panama City, Fla., Mr. Trump claimed that Mr. Biden was telling supporters that foreign leaders told him they hoped he would defeat Mr. Trump in 2020. “Of course they do,” the president told his crowd, “so they can continue to rip off the United States.”

For Mr. Trump, the decision on whether to abandon trade talks with China will hinge on more than politics. Trade is one of the few issues where he has deeply rooted ideological convictions, dating back to the 1980s. Mr. Trump views his aggressive tactics with Beijing as a way to break a pattern of Chinese dissembling that he contends has characterized China’s negotiations with the last three American presidents.

From the earliest days of Mr. Trump’s presidency, he has viewed a deal as a major political victory and made it one of his top priorities.

By the beginning of this year, he had grown impatient with the pace of negotiations and began pressing his advisers for a deal. In February, as negotiators were still early in the process of drawing up a text, he broached the idea of a “signing summit” with President Xi Jinping at Mar-a-Lago, his club in Palm Beach, Fla.

Mr. Trump’s eagerness for a deal encouraged Mr. Mnuchin and Robert Lighthizer, the United States trade representative, to give him overly optimistic reports about their progress, according to a person familiar with the talks, to avoid both his anger and an impulsive tweet or statement that might complicate the talks.

Last Friday evening, after yet another visit by Mr. Mnuchin and Mr. Lighthizer to Beijing, the Chinese sent the Americans a diplomatic cable containing a heavily redacted version of the text that the two sides had been working on, with modifications to all seven chapters of the 150-page document. Among other things, the changes walked back commitments to codify some parts of the agreement in Chinese law.

The administration’s hawks saw the changes as proof that China never intended to keep its promises, and the revisions seem to have given Mr. Trump a genuine change of heart that he expressed repeatedly this week.

On Sunday, Mr. Trump fired off a pair of tweets criticizing the Chinese and pledging to increase tariffs, and by Friday he had increased the tariff on $200 billion worth of Chinese imports to 25 percent from 10 percent. And he said he would start a process to levy a 25 percent tariff on virtually every other Chinese export.

It is not clear whether Mr. Trump has reverted from the eager deal maker to the anti-China hawkishness of the 2016 campaign. The risks of an all-out trade war are considerable. Political analysts said voters were likely to judge the president’s actions by how they affected their economic fortunes, not by whether he looked tougher than the Democrats. To some extent, that is true even of Mr. Trump’s supporters.

“They have been willing to give him the benefit of the doubt because he is addressing the issue,” said David Winston, a strategist who advises Republicans. “Their attitude is, ‘We’re with you in wanting to do this, but ultimately, it’s got to produce a positive impact for the country.’”

Yet there are also political risks for Mr. Trump in agreeing to a deal, particularly if he ends up with an agreement that has the same lack of teeth as those of his predecessors. Democratic candidates would most likely pounce on that as evidence that Mr. Trump’s blustering style does not produce results.

“A weak deal, including one that does not stop cybertheft by China, will be another proof point for Democrats to say that at the end of the day, Trump just doesn’t get the job done,” said Geoff Garin, a veteran Democratic pollster.

Mr. Garin said his firm had conducted research for Democrats that showed undecided and independent voters were troubled by the decline in the income of farmers because of Chinese retaliation for Mr. Trump’s tariffs.

“The China trade situation is particularly important because it ties his impulsive and erratic nature to real-world consequence for Americans, in terms of leaving many workers and farmers worse off than before,” he said.

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As China Trade Talks Stall, Xi Faces a Dilemma: Fold? Or Double Down?

Westlake Legal Group as-china-trade-talks-stall-xi-faces-a-dilemma-fold-or-double-down As China Trade Talks Stall, Xi Faces a Dilemma: Fold? Or Double Down? Xi Jinping United States International Relations United States Trump, Donald J Lighthizer, Robert E International Trade and World Market China

BEIJING — As Chinese and American officials try to reach a trade deal, Xi Jinping faces a painful, possibly damaging, choice: to try to protect his aura of indomitability or retreat after President Trump accused China of reneging on the terms of a draft agreement and threatened to raise tariffs.

The stakes rose sharply for the Chinese leader this week after Mr. Trump and his chief trade representative, Robert Lighthizer, publicly accused China of backing down on commitments. The sticking point appeared to be a late decision by Mr. Xi to reject American demands that China change laws constraining American businesses.

When Mr. Trump leapt onto Twitter to complain, it was a public rebuke that put Mr. Xi in a tight spot.

Mr. Xi is China’s most powerful leader in decades, and he guards his image as a visionary statesman guiding his country to greatness. But China’s relationship with the United State is its most important, and if ties between the countries are mismanaged, that could damage China’s economy and tarnish Mr. Xi’s authority.

Trade talks that just last week seemed close to fruition have abruptly become a flash point in the rocky relationship. Mr. Xi now faces questions at home over whether he miscalculated Mr. Trump’s resolve, and domestic rumblings could grow if the United States forces Mr. Xi to make concessions or if the talks break down.

“Xi is walking a tightrope,” said Paul Haenle, a former China director on the National Security Council who now runs the Carnegie-Tsinghua Center For Global Policy in Beijing. “He is going to be the one that has to make the most concessions, and that makes all this more difficult for him.”

But geopolitics could help China point to the many ways the sides need each other.

ImageWestlake Legal Group merlin_150664305_6ba73923-5941-40fe-b181-5bb0df1b9c86-articleLarge As China Trade Talks Stall, Xi Faces a Dilemma: Fold? Or Double Down? Xi Jinping United States International Relations United States Trump, Donald J Lighthizer, Robert E International Trade and World Market China

Stacked shipping containers at a port in Shanghai last year.CreditAssociated Press

On Thursday, shortly before the trade talks were set to resume, North Korea shot off short-range missiles. The United States has long pressed China, the North’s main political and economic supporter, to help rein in the country’s provocations.

Even if the timing of the launches is a coincidence, they could serve to remind the United States that it needs China’s help to maintain pressure on the North and keep its nuclear program in check.

Still, a resolution of the trade war during this week’s talks seems challenging.

China had been willing to protect intellectual property and open its markets to American business, but the Trump administration wanted the agreement to specify that some of those changes be made in Chinese law. For China, any legislative change or policy reversal could be a very public — and potentially humbling — reminder that it gave ground under pressure.

“That would bring back painful memories of the days of national humiliation in our history,” said Wang Yong, the director of the Center for International Political Economy at Peking University. “China has made too many concessions.”

The blaring nature of the Trump administration’s broadsides has sharpened the dilemma that Mr. Xi faces in the negotiations.

“To have Trump doing it so publicly is obviously very, very difficult for Xi Jinping,” said Susan L. Shirk, a professor at the University of California, San Diego, who worked as a deputy assistant secretary of state responsible for China under President Bill Clinton. “It makes it much more difficult for him to make the compromises needed.”

Yet if Mr. Xi holds to a tougher line, Mr. Trump could act on his threat to raise tariffs on $200 billion of Chinese goods as soon Friday. Such a step could shake confidence vital to keeping aloft economic growth in China and around the world, Tu Xinquan, a professor at the University of International Business and Economics in Beijing, said in an interview.

President Trump and Mr. Xi with Melania Trump and Mr. Xi’s wife, Peng Liyuan, arriving for a state dinner in Beijing in 2017.CreditDoug Mills/The New York Times

For the party, stable economic growth is fundamental to political legitimacy.

“Everyone may have greater doubts and uncertainty about the future of the Chinese economy, Chinese-U.S. relations or the global economy,” Professor Tu said. “This uncertainty will certainly affect production, investment, and consumption.”

At their first summit meeting just two years ago, Mr. Xi told Mr. Trump that China and the United States had “a thousand reasons” to work well together. But the slow pace of negotiations could tarnish in Mr. Xi’s carefully drawn image at home as a master strategist.

More than two years into the Trump presidency, Chinese officials still appear to struggle to understand the president, his temperament and his negotiating style. American politicians and experts say that Chinese counterparts often fail to grasp how far and fast wariness of China has hardened into hostility.

“There are a lot of voices in Washington that are either sharply or harshly critical of China’s actions in trade, in their military expansionism, in their actions in the South China Sea — fill in the blank,” Senator Chris Coons, a Democrat senator from Delaware, said in an interview in Beijing late last month after meeting Chinese officials.

Mr. Xi’s top economic official, Vice Premier Liu He, who leads the Chinese negotiators, could also suffer a setback in his standing if the latest talks falter.

“If, say, Liu He comes back to Beijing empty-handed, and there’s more tirades from Trump on his Twitter account, I think things could get really wild,” Zhang Jian, an associate professor of government at Peking University said in an interview. “It’s going to spill out of the economic waters.”

Just over a week ago, the outlook for the trade negotiations seemed rosier. Chinese and American officials met in Beijing then for a 10th round of talks aimed at easing trade and economic tensions that spiked after Mr. Trump progressively imposed tariffs on $250 billion worth of goods last year.

Workers assembling electronic connectors in Guangdong Province last year.CreditFreddy Chan/EPA, via Shutterstock

Shortly before the talks last week started, the United States Treasury secretarys Steven Mnuchins said the negotiations were in their “final laps.” After the talks ended, he said on Twitter that they had been “productive.”

But then Mr. Lighthizer and other Trump administration officials accused Chinese negotiators of trying to reverse concessions they had already made. The air of optimism evaporated.

The Trump officials said that China had retreated from draft agreements calling on its legislature to change laws that have threatened or constricted American trade and business. Two Chinese scholars in Beijing said they were told by well-placed officials that the changes in commitments appeared after Mr. Xi reviewed the draft deal. They spoke on condition of anonymity to discuss internal party matters.

The Chinese government disputed the claims of an underhanded rollback, saying Thursday it was normal for negotiating sides to disagree during talks. “China values trustworthiness and keeps its promises,” Gao Feng, a spokesman for the Ministry of Commerce, said at a briefing. “It has never changed.”

The Chinese have also complained about dealing with a mercurial president they say is apt to turn private disagreements into public brawls.

“Trump’s personality is different, we all know,” said Professor Tu. “He would take something that hasn’t been settled in negotiations and treat it as so-called backsliding by China, or whatever, and then announce it.

“An ordinary president,” he said, “wouldn’t act this way.”

Negotiations with the United States have always been fraught for Chinese officials. Memories of bad blood linger.

In 1999, Zhu Rongji, then the vice premier, went to Washington hoping to reach a breakthrough deal that would open China’s way to joining the World Trade Organization — only to have President Clinton balk.

President Bill Clinton and Premier Zhu Rongji at the White House in 1999.CreditPaul Hosefros/The New York Times

Mr. Zhu returned to Beijing with his reputation damaged. A month later, the United States accidentally bombed China’s embassy in Belgrade during NATO’s war over Kosovo, igniting bitter protests against Washington across China. It took almost three more years before China joined the W.T.O.

Now Mr. Xi must find a way to satisfy the Trump administration without appearing to give away too much. That could be more difficult if Mr. Trump continues to pelt Mr. Xi with demands on Twitter.

“I think the Chinese side is in an uncomfortable position, as they are reactive instead of controlling the situation as they are accustomed,” said James L. McGregor, a consultant in Shanghai and former chairman of the American Chamber of Commerce in China.

There are grave risks for both sides if the trade talks collapse entirely, many economists say.

Some Chinese academics and business executives have already argued privately and online that Mr. Xi misjudged how far he could push Mr. Trump and promote China as a potential rival to the United States’ dominance.

Mr. Trump, too, would not walk away unscathed. A breakdown in negotiations could weigh down American stock prices, which Mr. Trump invokes as an measure of his policy successes.

Even if the talks in Washington end with handshakes and a new agreement, the past week has laid bare a lack of trust between China and the United States. Tensions over technology competition, spying, Taiwan, the South China Sea and other trouble spots could well up, said Professor Zhang, the Peking University academic.

“The more important thing is not whether there’s a deal or no deal,” he said. “It’s the consensus in the American political class about China as a threat.”

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Fear of Intensifying Trade War Ricochets Through Economy

Westlake Legal Group merlin_154531287_ee046e78-4b80-4119-9d5f-e42068aec726-facebookJumbo Fear of Intensifying Trade War Ricochets Through Economy Stocks and Bonds Standard&Poor's 500-Stock Index Mnuchin, Steven T Lighthizer, Robert E International Trade and World Market

Fears of an escalating trade war between the United States and China ricocheted through the American economy on Tuesday, sending stocks down sharply and prompting businesses large and small to brace for fallout.

For months, investors and companies had been lulled into a sense of security that the world’s two largest economies appeared to be getting closer to a deal to resolve their battle. That calm was shattered this week when the Trump administration threatened to impose a new round of tariffs on hundreds of billions of dollars of Chinese products.

A delegation of Chinese leaders is preparing to travel to Washington for talks later this week, and Trump administration officials pledged to try to get trade negotiations back on track. But it is unclear whether the two sides can defuse the newest tensions.

After financial markets closed on Monday, Treasury Secretary Steven Mnuchin and Robert Lighthizer, the United States trade representative, emphasized that President Trump’s threats were not idle.

The market reaction was swift. On Tuesday, the S&P 500 index dropped 1.65 percent, its second straight daily decline.

That spoiled what had been a jubilant mood in the markets. In the first four months of 2019, the S&P 500 soared 17.5 percent, the index’s best start to a year since 1987. Investors shook off concerns that the global economy was slowing, that the Federal Reserve would raise interest rates and that the trade battle between the United States and China would drag on.

“We had all of those more or less resolved,” said Evan Brown, a markets strategist at UBS Asset Management. “We had the Fed become a lot more dovish. We had growth stabilize. And we had what everyone thought was the trade war moving toward a healing phase.”

Some experts said the market’s hot streak this year, along with consistently robust data about the health of the United States economy, might be emboldening Mr. Trump to ratchet up the trade dispute with China.

“He’s never had better cards dealt to him to push China hard than right now,” said Michael Purves, chief global strategist at brokerage firm Weeden & Company. “There’s clearly the risk that he’s going to push this into Friday and beyond.”

Talks are racing against a deadline. The Trump administration is threatening to raise the tariff on roughly $200 billion of Chinese imports to 25 percent, from 10 percent, on Friday.

The administration doubled down after Chinese negotiators walked back commitments, including how the deal would be enforced. They particularly objected to how Mr. Trump’s advisers wanted to codify it, people familiar with the talks said.

The administration wanted the text of the agreement to specify that some of changes that China had promised would be made in Chinese law. But Chinese negotiators insisted that the changes would be carried out through regulatory and administrative actions by the Chinese government, and not cemented in place through legislation in the National People’s Congress.

In a briefing on Tuesday, a Chinese government spokesman did not directly address the American accusations, but said that raising tariffs would not resolve any problems and that China was continuing to negotiate in good faith.

The growing friction led investors and business owners to steel themselves for greater turbulence. On Tuesday, investors battered shares of companies that rely directly or indirectly on international trade and the Chinese economy.

Caterpillar and Deere, industrial equipment makers with large markets in China, dropped 2.3 percent and 1.5 percent. Boeing, one of the United States’ largest exporters, dropped about 4 percent. Shares of semiconductor companies sank more than 2 percent.

In China, share prices plunged as much as 6 percent on Monday after Mr. Trump’s initial threat. They recovered only a small part of those losses on Tuesday.

Brock Silvers, the chief executive of Kaiyuan Capital, an investment management and advisory firm in Shanghai, said there was little optimism that Vice Premier Liu He, who will lead China’s delegation to the United States this week, could persuade the Trump administration to delay the latest increase in tariffs, at least initially.

“Markets had expected a quick agreement, and now seem shocked by the possibility of a prolonged economic conflict,” Mr. Silvers said.

A parade of United States trade associations sounded alarm bells this week that a new round of tariffs risked disrupting their industries, harming the economy and raising prices for consumers.

The auto industry, for example, is worried that tariffs will make imported car parts more expensive, and that China will put retaliatory tariffs on American-made cars sold in China, said John Bozzella, the president of Global Automakers, which represents international car companies.

“Our concern is, as we go back into a phase of tit-for-tat tariffs, that the auto industry would face some significant pain,” Mr. Bozzella said.

Tariffs would also hurt the chemicals industry, which depends on China for several chemicals that are not available anywhere else and are critical to American manufacturing, said Cal Dooley, the president of the American Chemistry Council.

“The risks of continuing to use tariffs as a negotiating tactic with China are simply too high — and any potential benefits still unclear,” Mr. Dooley said.

Stephen K. Bannon, Mr. Trump’s former chief strategist, praised the president on Tuesday for daring to anger big companies by standing up to China.

“This is the biggest move of his presidency — to break ranks with other administrations and confront China’s economic war with America,” Mr. Bannon said.

But not just giant industries could be walloped by a new round of tariffs on Chinese products.

Tiffany Williams, owner of the Luggage Shop of Lubbock in Texas, was already hurting this year from the first phase of duties. They led to a roughly 10 percent increase in the price of the travel bags and accessories that her store sells. Ms. Williams had responded by raising her prices. That, she said, led some customers to shy away from buying high-end bags — which now cost more than $400 each, up from about $370 — and instead buy cheaper luggage.

This week, Ms. Williams said, she started getting calls from wholesalers warning that prices will go up again if Mr. Trump makes good on his threat to increase tariffs on Chinese imports.

“It’s very concerning,” said Ms. Williams, whose grandfather opened the shop in 1951. “It will change what consumers are ready to buy from us.” As she waits to assess the damage, she said, she is holding off on hiring more workers.

Delta Children in New York, which sells cribs that it imports from China, swallowed most of the costs stemming from the first round of tariffs, the company’s president, Joe Shamie, said. He said he had increased prices to retailers by only about 3 percent.

A new round of tariffs? “We can’t absorb them,” said Mr. Shamie, who described his company as the world’s largest seller of cribs. “Our prices will go up drastically.”

The average price of a crib is between $200 and $250, but prices will top $300 if the higher tariffs are enacted, most likely leading some families to forgo buying a new crib, he said.

Delta Children employs 350 workers. If crib sales decline because of the tariffs, Mr. Shamie said, he will have to consider layoffs.

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Stocks Sink as New Tariff Threat Hangs Over China Trade Talks

Westlake Legal Group 07Markets-1-facebookJumbo-v6 Stocks Sink as New Tariff Threat Hangs Over China Trade Talks Stocks and Bonds Standard&Poor's 500-Stock Index Mnuchin, Steven T Lighthizer, Robert E International Trade and World Market

Stocks slid on Tuesday, falling for a second straight day, after comments from President Trump and his advisers dashed hopes that a trade deal between China and the United States could be reached this week.

The S&P 500 fell 1.7 percent, one of its sharpest single-day declines this year with heavy losses in shares of companies most exposed to trade.

Late Monday, the trade representative, Robert Lighthizer, and Treasury Secretary Steven Mnuchin said that new tariffs would be imposed on imports from China starting on Friday. They cited what they saw as Chinese backpedaling on commitments.

The comments came just a day after the president tweeted about the new tariffs and reinforced concerns that the trade talks, which are set to resume Thursday, had hit a serious snag. The S&P 500 had dropped half a percent on Monday.

The two-day drop is a sharp turn for a market that hit a record high just last month. Through end of April, the S&P 500 was up 17.5 percent, powered by the Federal Reserve’s abrupt pivot away from its previous focus on raising interest rates.

Some now think those gains could be emboldening the administration to ratchet up its trade dispute with China. And that has them preparing for another period of market volatility in the coming weeks.

“He’s never had better cards dealt to him to push China hard than right now,” said Michael Purves, chief global strategist at brokerage firm Weeden & Company. “There’s clearly the risk that he’s going to push this into Friday and beyond.”

The talks are still expected to be held as planned. China’s Commerce Ministry said on Tuesday that Liu He, the vice premier and one of the country’s leading economic policymakers, would join the Chinese delegation. Mr. Liu is a close adviser and confidant of President Xi Jinping, China’s top leader, and his participation could improve the chances of striking a deal.

Still, the statements from Mr. Lighthizer and Mr. Mnuchin were taken as a sign that the administration was gearing up for another period of contentious negotiations that could whipsaw markets.

Among trade-sensitive stocks, shares of Caterpillar and Deere, industrial equipment makers with large markets in China, tumbled. Boeing, one of the United States’ large exporters, dropped more than 4 percent.

Semiconductor companies, which are heavily reliant on production networks centered in Asia, and tech shares also dropped sharply.

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Trump Advisers Accuse China of Reneging on Trade Commitments

Westlake Legal Group trump-advisers-accuse-china-of-reneging-on-trade-commitments Trump Advisers Accuse China of Reneging on Trade Commitments United States Politics and Government United States Economy Trump, Donald J Politics and Government Liu He (1952- ) Lighthizer, Robert E Economic Conditions and Trends
Westlake Legal Group 06DC-CHINATRADE-01-facebookJumbo-v3 Trump Advisers Accuse China of Reneging on Trade Commitments United States Politics and Government United States Economy Trump, Donald J Politics and Government Liu He (1952- ) Lighthizer, Robert E Economic Conditions and Trends

WASHINGTON — President Trump’s top economic advisers on Monday accused China of reneging on previous commitments to resolve a monthslong trade war and said Mr. Trump was prepared to prolong the standoff to force more significant concessions from Beijing.

Mr. Trump, angry that China is retreating from its commitments as the sides appeared to be nearing a deal and confident the American economy can handle a continuation of the trade war, will increase tariffs on $200 billion worth of Chinese goods on Friday morning, his top advisers said.

“We’re moving backwards instead of forwards, and in the president’s view that’s not acceptable,” his top trade adviser, Robert Lighthizer, told reporters on Monday. “Over the last week or so, we have seen an erosion in commitments by China.”

Mr. Trump’s last-minute escalation highlights his administration’s difficult political position as it tries to fend off criticism that he has not been sufficiently tough on China. The president is facing pressure to show that the pain of his trade war will be worth it for the companies, farmers and consumers caught in the middle. Mr. Trump’s decision to potentially upend an agreement that many expected to be finalized this week in Washington appears to be a political calculation that staying tough on China will be a better proposition in the 2020 campaign.

Fueling that decision is the president’s growing confidence that his trade policies are bolstering the American economy, without any downside. Mr. Trump and his advisers have seized on strong first-quarter growth in the gross domestic product as vindication that their tough approach to trade is accelerating the economy, and putting the United States in a stronger position than China to withstand any blowback from higher tariffs. Gross domestic product surged past forecasts in the first quarter, rising 3.2 percent on an annual basis in part because of a sharp slowdown in imports.

Steven Mnuchin, the Treasury secretary, attributed the strong growth to Mr. Trump’s economic policies, including on trade.

“There’s no question that some of the trade policies helped in the G.D.P. number,” Mr. Mnuchin said.

While the president and his advisers have interpreted the figures as evidence that his tariffs are reducing the trade deficit and boosting growth, economists have been more skeptical.

“If you look at imports and exports, it jumps around a lot,” said Torsten Slok, the chief economist at Deutsche Bank Securities. “The recent changes we’ve seen in net exports, it’s probably premature to claim credit for that.”

American investors seemed to back Mr. Trump’s position on Monday, as markets opened lower but then largely shrugged off Mr. Trump’s threat to raise tariffs on $200 billion worth of goods to 25 percent on Friday and eventually tax an additional $325 billion worth of Chinese products.

A final trade agreement could still be reached. Mr. Lighthizer and Mr. Mnuchin said on Monday that the Chinese delegation had not canceled travel plans to come to Washington on Thursday and Friday for negotiations.

“We’re not breaking up talks at this point,” Mr. Lighthizer said.

Mr. Mnuchin said the United States would reconsider imposing higher tariffs on China if the negotiations got “back on track.” He added that negotiators had been optimistic in the past about the prospects for a deal and had been planning for a summit meeting between Mr. Trump and President Xi Jinping of China to finalize the deal.

But Mr. Mnuchin said it became “particularly clear over the weekend” that the Chinese had moved negotiations “substantially backwards.”

China, which depends on the United States economy for trade, said on Monday that it still planned to send a delegation to the United States this week for talks, though a spokesman for the Chinese Foreign Ministry declined to specify whether it would include Vice Premier Liu He, who has led the talks for the Chinese.

The threat of additional tariffs poses a major problem for Mr. Xi, who had been counting on a trade deal to keep China’s growth engine humming.

China’s economic growth began to slow last year as Beijing tried to tame the country’s overreliance on lending. Mr. Trump’s initial tariffs last year hurt Chinese manufacturers and consumer confidence, worsening the slowdown. China’s economic slowdown limited Mr. Xi’s options to retaliate against American tariffs and put pressure on him to reach a deal.

In recent months, thanks in part to new lending, China’s slowdown appeared to stabilize. The prospect of a trade deal also increased consumer and investor confidence and led many economists to project that China’s growth would improve.

New tariffs could derail that progress.

“If tariffs are hiked this Friday and new tariffs come soon after that, the biggest negative impact will likely occur in the next few months,” Tao Wang, an economist specializing in China at UBS, said in a research note.

She estimated that a full-blown trade war with the United States could cut China’s economic growth rate by 1.6 to 2 percentage points over the next 12 months. That would be a considerable cut: Last year, China’s economy grew 6.6 percent, according to official figures, and the government has set an official target of 6 to 6.5 percent this year.

On Monday, Mr. Trump repeated his insistence that China rebalance its economic relationship with the United States and end its role as a net exporter of goods.

The decision to up the ante came after Mr. Trump’s trade advisers made a short trip to Beijing last week. Mr. Lighthizer returned from that visit dismayed by China’s refusal to mention commitments it had made to update various Chinese laws in the final text of the trade agreement, people familiar with the situation said. Even Mr. Mnuchin, who has been more optimistic about the prospects of a deal, was dismayed that the Chinese were not doing more to reach an agreement.

Instead, Chinese negotiators had insisted that any concessions would need to be achieved through regulatory and administrative actions, not changes to Chinese law passed through its legislature. The provisions included the forced transfer of technology from American companies to Chinese firms, the people familiar with the negotiations said.

Chinese negotiators have also continued to insist that Mr. Trump lift the tariffs he has placed on $250 billion worth of goods more quickly than the administration wants. With the two sides still disagreeing over issues including how China subsidizes its companies, its restrictions on data transfers, its approvals of genetically modified seeds and rules for foreign cloud computing companies, the president concluded late last week that China’s offers were not good enough.

On Sunday, Mr. Trump’s tariff threats sparked concern among business and industry groups, but drew praise from both sides of the political aisle.

“Hang tough on China, President @realDonaldTrump,” Senator Chuck Schumer of New York, the Democratic leader, said on Twitter.

“Excellent decision by @realDonaldTrump!” Laura Ingraham, a Fox News host, tweeted, which the president retweeted onto his feed. “No other president has had the guts to take on the China challenge.”

Mr. Lighthizer said on Monday that the United States was targeting some “very pernicious actions” by the Chinese, and that reversing them would have an enormous benefit for the American economy and the world. He also pushed back against reports that the evolving agreement would do little to address China’s subsidization of key industries.

Analysts have questioned whether volatility in the stock markets could change the president’s mind. Mr. Trump’s tariff threats caused markets in Asia to plummet Monday morning, but in the United States, the S&P 500 index closed down 0.45 percent, while the Dow Industrial was down just 0.25 percent.

It was unclear whether markets viewed Mr. Trump’s tariff threat merely as a negotiating tactic. The president has turned to tariffs as a source of leverage to bring other negotiations to the close. In talks last year over the North American Free Trade Agreement, Mr. Trump threatened to leave Canada out of the deal entirely and strike a deal with Mexico, a gambit that brought negotiations to a rapid conclusion.

In a note on Monday, Joshua Shapiro, the chief United States economist for MFR, an economic research firm, said his forecast and most others assumed that the United States-China trade talks resulted in no further damage, at a minimum. “Given expectations of an agreement, failure to achieve one would be a serious blow to markets and the economy,” he wrote.

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Trump Prepared to Hit China With More Tariffs

Westlake Legal Group 06DC-CHINATRADE-01-facebookJumbo-v3 Trump Prepared to Hit China With More Tariffs United States Politics and Government United States Economy Trump, Donald J Politics and Government Liu He (1952- ) Lighthizer, Robert E Economic Conditions and Trends

WASHINGTON — President Trump, emboldened by ongoing strength in the American economy and angered by China’s attempts to renege on previous commitments, is prepared to prolong his monthslong trade war rather than settle for a weak agreement, his top advisers said Monday.

Mr. Trump’s threat to increase tariffs on $200 billion worth of Chinese goods on Friday morning followed a visit last week by his top advisers to Beijing, in which the Chinese “retreated” on parts of the deal, the advisers said.

“We’re moving backwards instead of forwards, and in the president’s view that’s not acceptable,” Robert Lighthizer, the president’s top trade negotiator, told reporters on Monday.

Mr. Trump on Sunday threatened to hit nearly all of China’s exports to the United States with tariffs. The president was angered by China’s attempt to reverse commitments to essentially codify an agreement to provide American companies with more equal treatment, according to people familiar with the negotiations. The president was also irked by China’s insistence that the United States quickly lift all of the tariffs Mr. Trump had placed on $250 billion worth of imports.

A final trade agreement could still be reached, and China, which depends on the United States economy for trade, said on Monday that it still planned to send a delegation to the United States this week for talks. However, a spokesman for the Chinese Foreign Ministry declined to specify on Monday whether Vice Premier Liu He, who has led the talks for the Chinese, would still travel to the United States for scheduled meetings, instead saying that “the Chinese team is preparing to go to the U.S. for consultations.”

Steven Mnuchin, the Treasury Secretary, said the United States would reconsider imposing higher tariffs on China if the negotiations got “back on track.” He added that negotiators had been optimistic in the past about the prospects for a deal, but that recent interactions with the Chinese had moved negotiations “substantially backwards.”

Mr. Trump’s last-minute warning highlights the difficult political position facing his administration as it tries to convince businesses, lawmakers and consumers that the deal it strikes with China will truly level the playing field and put the United States in a better economic position. He is also facing pressure to show that the pain of his trade war will be worth it for the companies, farmers and consumers caught in the middle.

On Monday, Mr. Trump repeated his insistence that China rebalance its economic relationship with the United States and end its role as a net exporter of goods.

The president’s promise to raise tariffs to 25 percent on Friday and eventually tax another $325 billion worth of Chinese goods sent global markets down on Monday, as investors worried that the trade war could be prolonged indefinitely. Stocks fell sharply after trading opened, with the S&P 500 starting down more than 1 percent. But the market gained ground throughout the trading day. Shortly before 3 p.m., the S&P 500 was down a bit less than 0.5 percent.

The decision to up the ante came after Mr. Trump’s trade advisers returned dismayed by China’s refusal to mention commitments it had made to update various Chinese laws in the final text of the trade agreement.

Instead, Chinese negotiators had insisted that any concessions would need to be achieved through regulatory and administrative actions, not through changes made to Chinese law through its legislature. The provisions included, but were not limited to, the forced transfer of technology from American companies to Chinese firms, the people familiar with the negotiations said.

Chinese negotiators have also continued to insist that Mr. Trump lift the tariffs he has placed on $250 billion worth of goods more quickly than the administration wants. With the two sides still disagreeing over issues including how China subsidizes its companies, its restrictions on data transfers, rules for foreign cloud computing companies and its approvals of genetically modified seeds, the president concluded that China’s offers were not good enough.

Late last week, Mr. Trump and a small circle of advisers decided the United States was in a strong enough economic position to ramp up tariffs on $200 billion worth of Chinese exports. People familiar with the president’s thinking said that he believed that a strong American economy would enable the United States to withstand any blowback from those higher tariffs — including Chinese retaliation — until China was ready to come back to the negotiating table.

His unconventional approach drew accolades from both sides of the political aisle.

“Hang tough on China, President @realDonaldTrump,” Senator Chuck Schumer, the Democratic leader, said on Twitter.

“Excellent decision by @realDonaldTrump!” Laura Ingraham, a Fox News host, tweeted, which the president retweeted onto his feed. “No other president has had the guts to take on the China challenge.”

Advisers to Mr. Trump say he has felt vindicated by a string of positive economic data, in particular the first-quarter gross domestic product, which increased partly as a result of rising exports. While economists have attributed economic growth in the first quarter to a variety of factors, the president and his advisers interpreted the figures as evidence that his tariffs are reducing the trade deficit and boosting growth.

Mr. Trump’s belief that his trade war is not having an economic downside is fueling his insistence that some of the tariffs on China remain in place. But China has insisted that all of the tariffs must come off as part of the deal.

The president has turned to tariffs as a source of leverage to bring other negotiations to the close. In talks last year over the North American Free Trade Agreement, Mr. Trump threatened to leave Canada out of the deal entirely and strike a deal with Mexico, a gambit that brought negotiations to a rapid conclusion.

Yet analysts have questioned whether volatility in the stock markets could change the president’s mind. He has repeatedly referred to stock markets as a kind of scoreboard for his presidency.

In a note on Monday, Joshua Shapiro, the chief United States economist for MFR, an economic research firm, said that his forecast and most others assumed that the United States-China trade talks resulted in no further damage, at a minimum. “Given expectations of an agreement, failure to achieve one would be a serious blow to markets and the economy,” he wrote.

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Trump’s Tariff Threat Stemmed From Concerns U.S. Is Losing in Trade Deal

Westlake Legal Group 06DC-CHINATRADE-01-facebookJumbo-v3 Trump’s Tariff Threat Stemmed From Concerns U.S. Is Losing in Trade Deal United States Politics and Government United States Economy Trump, Donald J Politics and Government Liu He (1952- ) Lighthizer, Robert E Economic Conditions and Trends

WASHINGTON — President Trump’s threat to impose more tariffs on China before this week’s final round of trade talks stemmed from his concerns that the United States was about to be on the losing end of a historic trade deal.

Mr. Trump, whose Sunday threat could derail efforts to end a monthslong trade war, was angered by China’s attempt to reverse commitments to essentially codify an agreement to provide American companies with more equal treatment, according to people familiar with the negotiations. The president was also irked by China’s insistence that the United States quickly lift all of the tariffs Mr. Trump had placed on $250 billion worth of imports.

A final trade agreement could still be reached, and China, which depends on the United States economy for trade, said on Monday that it still planned to send a delegation to the United States this week for talks. However, a spokesman for the Chinese Foreign Ministry declined to specify on Monday whether Vice Premier Liu He, who has led the talks for the Chinese, would still travel to the United States for scheduled meetings, instead saying that “the Chinese team is preparing to go to the U.S. for consultations.”

Mr. Trump’s last-minute warning highlights the difficult political position facing his administration as it tries to convince businesses, lawmakers and consumers that the deal it strikes with China will truly level the playing field and put the United States in a better economic position. He is also facing pressure to show that the pain of his trade war will be worth it for the companies, farmers and consumers caught in the middle.

On Monday, Mr. Trump repeated his insistence that China rebalance its economic relationship with the United States and end its role as a net exporter of goods.

The president’s promise to raise tariffs to 25 percent on Friday and eventually tax another $325 billion worth of Chinese goods sent global markets down on Monday, as investors worried that the trade war could be prolonged indefinitely. Stocks fell sharply after trading opened, with the S&P 500 starting down more than 1 percent. But the market gained ground throughout the trading day. Shortly before 3 p.m., the S&P 500 was down a bit less than 0.5 percent.

The decision to up the ante came after Mr. Trump’s trade advisers made a short trip to Beijing last week. Robert Lighthizer, the United States trade representative, returned from that visit dismayed by China’s refusal to mention commitments it had made to update various Chinese laws in the final text of the trade agreement.

Instead, Chinese negotiators had insisted that any concessions would need to be achieved through regulatory and administrative actions, not through changes made to Chinese law through its legislature. The provisions included, but were not limited to, the forced transfer of technology from American companies to Chinese firms, the people familiar with the negotiations said.

Chinese negotiators have also continued to insist that Mr. Trump lift the tariffs he has placed on $250 billion worth of goods more quickly than the administration wants. With the two sides still disagreeing over issues including how China subsidizes its companies, its restrictions on data transfers, rules for foreign cloud computing companies and its approvals of genetically modified seeds, the president concluded that China’s offers were not good enough.

Late last week, Mr. Trump and a small circle of advisers decided the United States was in a strong enough economic position to ramp up tariffs on $200 billion worth of Chinese exports. People familiar with the president’s thinking said that he believed that a strong American economy would enable the United States to withstand any blowback from those higher tariffs — including Chinese retaliation — until China was ready to come back to the negotiating table.

His unconventional approach drew accolades from both sides of the political aisle.

“Hang tough on China, President @realDonaldTrump,” Senator Chuck Schumer, the Democratic leader, said on Twitter.

“Excellent decision by @realDonaldTrump!” Laura Ingraham, a Fox News host, tweeted, which the president retweeted onto his feed. “No other president has had the guts to take on the China challenge.”

Advisers to Mr. Trump say he has felt vindicated by a string of positive economic data, in particular the first-quarter gross domestic product, which increased partly as a result of rising exports. While economists have attributed economic growth in the first quarter to a variety of factors, the president and his advisers interpreted the figures as evidence that his tariffs are reducing the trade deficit and boosting growth.

Mr. Trump’s belief that his trade war is not having an economic downside is fueling his insistence that some of the tariffs on China remain in place. But China has insisted that all of the tariffs must come off as part of the deal.

The president has turned to tariffs as a source of leverage to bring other negotiations to the close. In talks last year over the North American Free Trade Agreement, Mr. Trump threatened to leave Canada out of the deal entirely and strike a deal with Mexico, a gambit that brought negotiations to a rapid conclusion.

Yet analysts have questioned whether volatility in the stock markets could change the president’s mind. He has repeatedly referred to stock markets as a kind of scoreboard for his presidency.

In a note on Monday, Joshua Shapiro, the chief United States economist for MFR, an economic research firm, said that his forecast and most others assumed that the United States-China trade talks resulted in no further damage, at a minimum. “Given expectations of an agreement, failure to achieve one would be a serious blow to markets and the economy,” he wrote.

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Trump’s Nafta Revisions Offer Modest Economic Benefits, Report Finds

Westlake Legal Group 18DC-USMCA-2-facebookJumbo Trump’s Nafta Revisions Offer Modest Economic Benefits, Report Finds United States Politics and Government United States International Trade Commission United States Economy Trump, Donald J North American Free Trade Agreement North America Mexico Lighthizer, Robert E International Trade and World Market Canada

WASHINGTON — A government report has concluded that the Trump administration’s revised North American trade agreement would offer modest benefits to the economy, challenging the president’s claims that the accord would make far-reaching changes.

Mr. Trump has reviled the quarter-century-old North American Free Trade Agreement as the worst trade pact in existence and blamed it for pushing up the trade deficit, or the gap between what the country imports and what it exports. Over the past year and a half, he gave his administration a mandate to improve the pact. In November, Canada, Mexico and the United States signed an updated accord, which the president rebranded as the United States-Mexico-Canada Agreement, and the new deal is awaiting ratification from legislators in all three countries.

On Thursday, the United States International Trade Commission, a government body, released an independent analysis of the accord’s potential effects on the country’s economy, a report required by law before Congress votes on the deal.

The report found that the agreement would increase gross domestic product by 0.35 percent after inflation, or $68.2 billion, and create 175,700 jobs — fewer than the economy has recently produced in a single month, on average. It would increase United States trade with Canada and Mexico by about 5 percent, as well as provide a modest lift to agriculture, services and manufacturing activity.

“In light of the size of the U.S. economy relative to the size of the Mexican and Canadian economies, as well as the reduction in tariff and nontariff barriers that has already taken place among the three countries under Nafta, the impact of the agreement on the U.S. economy is likely to be moderate,” the commission said.

Critics of the accord seized on the findings. “This report confirms what has been clear since this deal was announced — Donald Trump’s Nafta represents at best a minor update to Nafta, which will offer only limited benefits to U.S. workers,” said Senator Ron Wyden, Democrat of Oregon.

The administration, however, saw the report as evidence of the pact’s strengths, noting that the commission typically projects only modest benefits from trade agreements.

Robert Lighthizer, the United States trade representative, said the commission’s estimates of the deal’s contribution to economic growth were twice as large as its estimates for the effects of the Trans-Pacific Partnership, a 12-nation deal negotiated by the Obama administration. The commission has significantly updated its methodology, however, making comparisons difficult.

“There can be no doubt that the U.S.M.C.A. is a big win for America’s economy,” Mr. Lighthizer said.

Kevin Hassett, the chairman of the president’s Council of Economic Advisers, said he believed that the report had underestimated some of the deal’s economic benefits, including provisions on intellectual property. But he said he was encouraged.

“I think that should be reassuring to anyone who is on the fence on this bill,” he said.

Since negotiations began in August 2017, the administration has secured some substantive changes to Nafta, including modernizing protections on digital trade, adding labor and environmental protections, opening up the Canadian dairy market and adding rules to restrict governments from manipulating their currency.

Many of the changes have been updates to Nafta’s existing framework. Other improvements were drawn from the Trans-Pacific Partnership. Mr. Trump withdrew the United States from that agreement days after taking office, before Congress could act on it.

The Trump administration has also tightened regulations on how cars are manufactured — for example, raising the percentage of a vehicle that needs to be made in North America for it to be tariff-free — to encourage automaking in the United States.

The commission’s report projected that rule changes in the automotive sector would result in many of the largest economic changes from the pact. It estimated that rules meant to bolster American automotive manufacturing would add more than 28,000 jobs and increase investment by $683 million per year.

But by raising the cost of producing cars, the auto provisions would actually reduce American car exports and weigh on the economy over all, the report said.

Those figures clashed with a rosier analysis of the automotive effects of the deal released by the Trump administration. Based on information provided by North American automotive manufacturers, Mr. Lighthizer’s office estimated Thursday that the rule changes would result in $34 billion in investments in the United States, as well as $23 billion in annual purchases of American-made parts and 76,000 American jobs, all within five years.

A senior official in the trade representative’s office said Thursday that the deal’s auto provisions were “a substantial factor” in investments announced by Ford, General Motors, Toyota, Volkswagen and others. He said the updates to the agreement would close loopholes allowing companies to use more parts from countries like China and would help build an industry for autonomous and alternative-energy vehicles.

The trade commission’s model essentially simulates what the United States economy of 2017 would have looked like had the new agreement been in place then. It makes several assumptions that could affect the economic impact, including the premise that there is little room for the economy to add additional jobs without also driving up wage growth for workers.

Perhaps most notably for Mr. Trump, who views America’s trade deficit as a measure of economic success, the model assumes no change in the balance of trade between the United States, Mexico and Canada.

Some of the largest economic benefits of the pact, according to the trade commission, would come from the parts of the deal that codify the free flow of data across borders — measures that have been supported by technology companies.

Industry groups called for the pact’s quick passage into law. Linda Dempsey, the vice president for international economic affairs at the National Association of Manufacturers, said that the deal was “a win for manufacturers.”

Jordan Haas, the director of trade policy at the Internet Association, said the report underlined that the deal’s digital trade provisions were “critical to America’s future economic success” and “mean jobs and opportunities in every state.”

Still, the trade commission’s report is likely to add fuel to criticisms of the agreement, especially among some Democrats, who have criticized the deal’s environmental, labor and pharmaceutical provisions.

The Trump administration began the trade negotiations with the aim of appealing to more populist Democrats, who have long criticized Nafta for sending jobs out of the country. That support is more critical than ever for the administration, since the pact will probably need at least two dozen Democratic votes to pass the House of Representatives if every Republican votes for it, an outcome that is not guaranteed.

The revised deal includes changes meant to court labor unions and liberal politicians, including a minimum-wage requirement for the auto industry and the end of a special system of arbitration for corporations.

But as a vote in Congress approaches, opposition on the left appears to be hardening. Democrats say they are concerned that the agreement won’t adequately protect the environment and labor rights, and that its intellectual-property protections for the pharmaceutical industry could undermine legislative efforts to make health care more affordable.

While some Republican lawmakers objected to the Trump administration’s negotiating goals during the talks, most now appear to support the deal’s passage, in part to provide more certainty to companies in their districts.

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