What kind of political animals will be making U.S. trade policy in the Trump administration? The tone of the campaign suggests that the president-elect will act like a bull in the China shop, but his bellicose roars may instead presage a subtler strategy; it is also possible that his own business interests will influence the direction of U.S. policy. His abandonment of free trade and other Republican orthodoxies will force members of that party to decide whether to act like principled elephants or obedient sheep, even while Democrats choose between being opportunistic jackasses or stubborn mules. And in deciding where to direct its trade negotiations, the Trump administration may aim not just for big game like the United Kingdom and Japan, but could also have a few black swans in its sights. These might include such surprising partners as India, Taiwan, the Philippines, MERCOSUR, and perhaps even Russia.
“Man is by nature a political animal,” Aristotle told us in Book I of Politics, but precisely what sort of beasts will be making U.S. trade policy in the Trump administration? What do we know — or believe we know — about how the new government will handle trade disputes and negotiations? This note explores where U.S. trade policy may be headed during 2017-2020. It does so more by clarifying the questions and identifying the possibilities than by venturing definitive answers.
The questions are at once more pertinent and more baffling than they have been for any incoming administration in living memory. The political profile of trade policy had declined sharply in the decades that followed the divisive NAFTA ratification debate of 1992-1993, only to come back with a vengeance in 2016. Both Donald Trump and Bernie Sanders put trade skepticism at the top of their campaign themes, appealing to rising concerns over economic decline and the costs of globalization. But as voluble as Trump’s message was on trade, it was light on detail. We know much more about what he opposes than what he will propose. He came out against trade agreements both retrospectively (NAFTA) and prospectively (TPP), deemed the WTO “a disaster,” and threatened to impose tariffs on China and Mexico. Yet apart from a post-election promise to negotiate bilateral trade pacts, and a reiteration of his threat to penalize companies that send their production off-shore, he has thus far offered few specifics on what he would erect in place of the existing network of laws and agreements.
The first question is how Trump and his team will translate the jarring poetry of his campaign rhetoric into the concrete prose of policy. Will he act like a bull in the China shop, rampaging through the trading system, or are his bellicose roars the prelude to a subtler strategy? And how will the two parties Congress respond? Trump’s abandonment of free trade and other Republican orthodoxies will force members of that party to decide whether to act like principled elephants or obedient sheep. His opposition to NAFTA and the TPP will tempt just as many Democrats to be opportunistic jackasses, even if they prefer to be stubborn mules on other issues. Legislators will approach these questions not just with an eye on the 2016 results, but also on the prospects for Democrats to retake Congress in 2018 and for traditional Republicans to retake their party in 2020.
American trading partners must likewise decide how to respond to the new environment. Trump may accelerate both of the trends that have bedeviled the WTO for years, namely the twin proliferation of disputes and discriminatory initiatives, but in quantities and with qualities that could threaten the very fabric of the system. The question also arises as to what countries might be in line to negotiate free trade agreements (FTAs) with the United States. The Trump administration could start by picking over the remains of the TPP and TTIP, eyeing expanded U.S. exports to the Japanese and British markets. There may also be some black swans in its sights, potentially including such surprising partners as India, Taiwan, the Philippines, the MERCOSUR countries, and perhaps even Russia.