TRUMP & TRADE — Does his business background lead to bad trade policy?




    Trade is about the only international issue Trump has really cared about consistently since his Japan bashing of the 1980s. His business school background at Wharton and then his experience running the Trump Organization have informed his view of trade as a zero-sum transaction. There are only winners and losers.

     Now Trump has appointed the little-known business school professor Peter Navarro as his alt- ego on China bashing. What is this all about? How do these two seminal events, the Wharton School and his real estate experience, lead to this devastating appointment and Trump’s mindset?

     Once you pose the question like this the answer is simple.

     Business schools then and now rarely teach much about global trade. What they do is discuss international business. And this is discussed as transactions from the corporate perspective. That is the bottom line. Do you make money or don’t you.

     Business school courses may be called multinational business, corporate strategy or the like. But business schools do not teach trade in a contextual situation. This is not within their core agenda. They never discuss trade in the context of foreign policy, national interest, national security, or geopolitics.

     What about Trump’s global business experience?

    Well that just enforces his worldview of trade as being a bottom line business transaction. Do you make money or not. How do you negotiate? Well, there is simply no real difference between real  estate negotiations from diplomatic negotiations. Just bluster and bully. That’s all you need to do. Well that just won’t work very well in a multipolar world where there are a world of variables at work and many powerful players.

     So what’s the bottom line for US trade relations under Trump? Not good.

    China, the EU, Japan, Korea, India or even Russia are not buying or selling real estate, cross-licensing trademarks or refinancing hotels and casinos. These countries have long histories with many interests and great deal of experience over many years. The world of power politics is different from the world of New York real estate deals.

     My conclusion. The immediate future is not going to be pretty. We’ll see. Just buckle up.


Krugman. “And the Trade War Came.” New York Times (December 26, 2016).Donald Trump Really Might Start a Trade War.” Washington Post (December 24, 2016).

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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