Negotiating Tactics Will Result in Better Trade Deals for the U.S.
A shift toward more bilateral global trade agreements between the U.S. and other countries will benefit the U.S., according to CEOs who attended KeyBanc Capital Markets’ Industrials & Basic Materials Conference.
Section 232, a mechanism under the Trade Expansion Act of 1962 that allows the U.S. government to evaluate the effect of steel and aluminum imports on national security, is vital to the defense of the country, according to David Burritt, CEO of U.S. Steel.
“232 is going to be important to us to make sure we enforce the rule of the law and keep us safe and secure,” he says. “Every country should think about this.”
Burritt believes that if countries want to be safe and secure, they need to have a strong manufacturing base and a commodities industry so they can protect their populace through military equipment.
“I like to refer to Maslow’s hierarchy of needs,” he says. “You have the safety and security across the bottom, and if that falls apart, things get more difficult. We’ve seen that happen with the U.K., Greece and Puerto Rico.”
Burritt is optimistic the right decisions about global trade will be made, even if they take a little longer.
“Global trade has been unfair for a long time,” he says. “We need to make sure we’re playing the same game. You can’t give the Chinese or Russians four or five strikes and the U.S. one or two.”
Using the U.S.’s economic power to negotiate deals one-on-one makes sense, according to Stuart Bradie, another guest panelist and CEO of KBR, an engineering, procurement and construction company.
“You can understand why the U.S. would do that so they can get better deals,” he says. “But at the end of the day, saner heads will prevail. The positioning and muscle flexing are negotiating tactics, and the U.S. will get better deals, but it won’t be all one-sided. There’ll be a balance.”