Trump now promises to withdraw from the TPP on his first day in office. Great. This is the start of Protectionism Part II — Continuation from the Depression and Smoot-Hawley of the 1930s. This New Protectionism 2.0 is a disgrace for U.S. diplomacy and trade policy.
It’s contrary to U.S. national interests, geopolitical strategy in Asia, and global trade relations generally. It also raises serious national security considerations and those of global competitiveness of the U.S. and its firms. Of course fostering higher prices for goods purchased by every American.
Clearly this withdrawal plays into China’s hands. Helping them to trade more within their own region (the Regional Comprehensive Economic Partnership or the RCEP). Helping China to develop their own trading bloc with our friends. It also opens the gates to allowing China to write the new rules-of-the road for global trade and its newer issues.
What was Trump thinking? Really! Probably not much at all. Real estate deals are not the same as diplomacy. They are not zero sum games that maximizes profits and cash flow for one party and commissions to a third party. Obviously, withdrawal from TPP is throwing a bread crumb to the Rust Belt and to its unemployed workers with outdated skills.
The problem is not trade but technology and long-term demographic changes, among others.. It is also the failure of public and corporate policy to reinvest funds into infrastructure of all types and thus create widespread employment. This would help those suffering from the harshness of globalization, technological changes as well as demographic changes.
Withdrawal from TPP is not going to help anyone. It will only cause an avalanche of international political and economic tsunamis for the U.S. Just wait.
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- “Trump, Trade and the Rust Belt.” Law360 (November 10th, 2016).
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- “Retreat from TPP Empowers China.“ New York Times (Editorial) (Nov. 21, 2016).
- “Trump Says He Will Quit TPP First Day.” Reuters.” (Nov. 21, 2016).
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