We’ll find out whether Trump is actually tough on trade this month

The Trump Administration is staring down a half-dozen deadlines on trade policy that will create a moment of truth for the White House, which has so far opted for long-term investigations and renegotiations over immediate challenges to the status quo.

January could change that.

The month is book-ended by contentious trade negotiations with South Korea, beginning Jan. 5 in Washington, and with Mexico and Canada, beginning Jan. 23 in Montreal. By mid-January, Pres. Trump must decide whether to punish exporters of cheap steel and aluminum that threaten American producers, the subject of a nine-month national security investigation. By late January, Pres. Trump must decide whether to levy fines on Chinese solar panel producers. A decision on washing machine tariffs is due early February.

A separate, draft report is circulating among agencies on Chinese violations of US intellectual property — an issue that figured prominently in the National Security Strategy — is said to contain “muscular” recommendations. An administration official tells CNBC the recommendations are still being discussed, but could be made public this month.

Strict enforcement actions against China and unpredictable negotiations on free-trade agreements may align with President Trump’s populist preferences on trade, but the business community and Republican lawmakers have warned of the economic consequences of letting the pendulum swing too far.

“To date, the Trump Presidency has been marked by strong growth and job creation and rising business confidence. Withdrawing from trade agreements or raising tariffs puts that momentum at risk,” said John Murphy, senior vice president for international policy at the U.S. Chamber of Commerce. “The White House has a choice here: Take aggressive action on longstanding trade concerns or double down on economic growth.”

A White House official pointed to trade as part of a “bigger picture” for the economy, with cabinet-level discussions described as “deliberative” and the President focused on doing right by American workers.

But as the White House considers its choices, battle lines have been forming on two fronts.

The first is between congressional Republicans who support free trade and the hawks advising the President to withdraw from multilateral trade agreements and instill tariffs. Such advisers had been pushing Trump to take action against China on steel or intellectual property before his November trip to Asia. Citing tax reform sensitivity, diplomatic efforts and national security, centrist aides moved to postpone any potential action, sources familiar with the matter said.

The White House moved to shelve its most rancorous trade rhetoric toward the end of the year in an effort to preserve GOP relationships as tax reform neared passage. Expecting the truce would be temporary, GOP senators and governors began seeking reassurances in December from the Administration that it would not withdraw from NAFTA as talks enter their final stretch in early 2018.

“The Montreal round has become make or break,” said Matt McAlvanah, principal at Monument Policy Group and former Assistant U.S Trade Representative. “If there is little or no progress made in Montreal it’s hard to see how a deal comes together by the administration’s March deadline.”

Withdrawal is not an outcome that fazes Amb. Robert Lighthizer, the top US trade official; at a briefing with reporters following the October round, Lighthizer said, “If we end up not having an agreement, my guess is all three countries will do just fine.”