Since his days campaigning for the presidency, President Trump has been a vehement critic of free trade and past American trade policies in general. Expressing contempt for how other countries take advantage of American workers by utilizing tariffs, President Trump has worked to abruptly shift American policy from one advocating free trade to one extolling protectionism. This protectionism has taken aim both at the institutions the United States has led the way in building since the end of World War II and our closest allies.
To begin, one must observe how much of an aberration in post-war American policy the current administration’s policies are. Following World War II, the United States took a leading role in fostering relatively uninhibited international trade. Taking upon themselves the role as the spokesperson for open trade, the U.S. often lectured other nations on the importance of economic interdependence and set up such institutions as the World Trade Organization, the World Bank, and the International Monetary Fund.
In this spirit of free trade, the United States also negotiated several series of multilateral talks with other nations for the purpose of lowering trade barriers including, most notably, the Kennedy Round under the Johnson Administration and the Uruguay Round negotiated under the Reagan Administration. Open trade and a scorn for protectionism, both in the United States and across the world, was the standard view in the U.S. for over fifty years following the end of World War II to the beginning of the twenty-first century, holding strong albeit with shrinking support up until the 2016 election.
The Trump Administration began their aggressively protectionist policies by withdrawing the U.S. from the Trans-Pacific Partnership (TPP) negotiated by President Obama, which sought to bind 12 Western Hemisphere and Asian countries close together through mutually beneficial trade ties. The Administration has threatened repeatedly to leave the North American Free Trade Agreement (NAFTA).
To break down the trade war, the Administration is currently caught in major trade disagreements with Canada, Mexico, the European Union and, most seriously, China. The disagreement with America’s neighbors primarily focuses on NAFTA and how President Trump views it as unfair to Americans.
While recently the administration has had a breakthrough in bilateral talks with Mexico, trade relations between the US and Canada remain mired in acrimony. In trade negotiations with the EU, the president has recently expressed frustration that they cannot make bilateral trade agreements with the independent states but must act through the European Union as a whole.
The issue that is receiving the most media attention and has the most weighty possible implications is the issue of a growing trade war with China. China is a major trade partner of the United States and widely recognized as one of the leading economic powers, further signifying the dangers of a trade war between the U.S. and China.
President Trump originally imposed tariffs on Chinese steel and aluminum. The Chinese responded with tariffs on US agricultural products. The trade war escalated from there, to the point that China has recently filed a complaint over the US tariffs with the World Trade Organization. This places the United States in the incongruous position of founder of an organization that it spent decades building, that may now become its opposition.
The Administration’s aggressive and hostile trade policies represent reckless and harmful risks to the United States in the short- and long-term futures. President Trump’s combantancy towards countries usually considered among the US’s greatest allies are corrosive in the immediate future and will have ripple effects that will impact a generation of international relations – relations that have been built up over decades by a series of presidents from both parties are being strained by President Trump’s trade policies.
These tensions bleed into other spheres and overall have an eroding effect on US credibility and standing on the world stage. Combining trade with the general retreat from the world that this administration has pursued, as well as its increasing tendency to not honor US obligations such as by withdrawing from TPP, the JCPOA and the Paris Climate Accords, the sovereign word of the United States has been cast into doubt.
If other countries perceive that the United States is overall too unreliable to maintain the traditional role it has played in the postwar world, then they will begin turning to other nations and organizations for leadership. The nations of the world will no longer turn to Washington D.C. for guidance and will no longer trust the US to uphold its obligations.
Trade is one of the most complex issues there is, and nobody is advocating that the model used in the 1960s, 1970s or even the 1980s fits perfectly today. Automation, and a surge in multinational companies are evidence that tinkering must be done in American trade relations. However, blatantly reversing every trade position the US has held since World War II offers a far greater danger. It damages American prestige and credibility abroad, fosters discord between the US and their greatest allies, and aligns the US against the system of trade policies it helped make the norm. It invokes the specter of a time when protectionism across the world helped precipitate and worsen the Great Depression.
Image courtesy of wccftech.