The election of Trump into the Oval Office is much of a non-event for EU trade-policy detail, possibly even the TTIP: they have been deteriorating for years. Europe and the global trading system can survive new trade frictions and creeping protectionism, but a Trump that wants to go radical will make everyone miserable.
Reality sinking in
Trump’s attitude is obviously worrying. It should, though, be put in context. To begin with, even Hillary Clinton vowed to renegotiate both NAFTA and TPP – and the trade agreement with Canada and Mexico was a target already in her first Presidential run. Even the other agenda items – on China and enforcement – are practically straight out of the playbook for left-wing Democrats. Taken at face value, both contenders in this year’s presidential race promised the same responses to the same trade policy problems – just with different degree of eloquence and pertinence.
Even the last incoming U.S. President, Barack Obama, campaigned on similar policies. In 2008, he expressed clear dislike of NAFTA, pledging to renegotiate it if elected. He wanted to label China as a currency manipulator (with corrective trade action to follow), and took strong positions against the trade agreements that then were up for political approval (with Korea, Panama and Peru). Then he got into office – and with the exception of the ill-fated ACTA (which he supported on behalf of his campaign donors in Hollywood), trade policy was absent from President Obama’s first term. Like many others, President Obama had campaigned in poetry but governed in prose. Confronted with economic and political realities, he gradually conformed to the consensus about the benefits of trade and trade agreements.
Furthermore, nothing in Trump’s character or past experience indicates that he is a micro manager or particularly details driven. Similar to the last two presidents, preoccupied with more urgent issues (like the War on Terror, healthcare reforms, global financial crisis, or playing golf), Donald Trump will have little bandwidth for a wonky portfolio like trade. Instead, it is widely assumed that he will hand over the responsibilities to his cabinet appointees for Commerce Secretary and U.S. Trade Representative, possibly coming from his eclectic group of advisors on trade.
Trump has so far surrounded himself with 1970s-style protectionists like Dan DiMicco from the steel industry. Among his supporters there are also libertarian tech venture-capitalists like Peter Thiel and Carl Icahn. They may all share Trump’s zero-sum outlook of the world (with the U.S. at the losing end), but inarguably represent very different schools of economic thought. Whoever ends up being in charge of trade, he or she is likely to report to Trump’s running mate, Vice President Mike Pence, a staunch supporter of trade liberalisation that is poised to take a central role in running the executive office in the same manner that Vice President Dick Cheney was charged with policy coordination under President G W Bush. Unlike Donald Trump and his advisors, VP Pence is deeply rooted in the orthodox Republican position on trade as a job creator and a positive-sum game.