On trade with Asia, Trump puts America last
In a presidency of lowered expectations, it’s a relief that during his Asia tour Donald Trump managed to avoid saying anything provocative enough to start a war.
Yet he still did long-term damage to America’s influence and relationships in the Asia-Pacific – and to the economy of California and the rest of the nation – by talking tough on his wrongheaded “America First” approach on trade.
Back in Washington, D.C., on Wednesday, Trump declared his trip a huge success and again put other nations on notice that he will insist on “fair and reciprocal trade” and retaliate against cheating.
But any major trade conflict would devastate the U.S. and global economy. And any advances Trump makes will not overcome his monumental mistake of pulling America out of the Trans-Pacific Partnership – a 12-nation trade deal that would have increased U.S. exports, improved protections for workers and the environment and blunted China’s aggressive push in the region.
On his five-nation, 12-day Asia trip, Trump repeatedly promised that one-on-one trade agreements instead of TPP would be far better for U.S. companies and workers. But no one is rushing to begin negotiations, and the Trump team hasn’t proven it can produce these great deals.
And by pulling out of TPP, he may have strengthened the positions of Canada and Mexico – two TPP countries – in the ongoing negotiations to retool the 23-year-old North American Free Trade Agreement, which is also very important to California.
Trump seems obsessed with the U.S. trade deficit (which has grown on his watch), but this isn’t a zero-sum game. The whole idea behind broad free trade agreements is that by reducing barriers in an increasingly interconnected world, economic activity increases and everyone wins.
Ironically, Trump made his pronouncements at summits of multinational groups created to promote economic cooperation and security in Asia. And at the same time, the other 11 TPP countries announced that they’re moving ahead, without America, on the regional trade deal.
To be left out is bad for America and especially for California, the top exporting state to Asia. Three of our top four export markets – Canada, Japan and Mexico – were part of the TPP. California’s ports and agricultural industry stood to benefit, as did Silicon Valley software firms and Hollywood studios seeking to stop piracy of their intellectual property. Of California’s $163 billion in exports in 2016 – more than 11 percent of the U.S. total – about $69 billion was to the Asia-Pacific.
While California’s economy is varied and strong enough to survive without TPP, growth in exports would have provided a big boost and would help cushion the blow from the next recession.
But the president apparently is more interested in promoting his “America First” slogan to his diehard supporters than actually creating more jobs for them through increased trade.
The Asia trip also proved that he’s very interested in being feted and flattered. Appeals to his vanity with elaborate welcoming ceremonies – he boasted he received “a red carpet like nobody, probably has ever received” – can sway the leader of the free world. That’s a lesson that other leaders will put to good use, maybe even to get better trade deals for themselves.
This story was originally published November 16, 2017 at 12:00 PM with the headline "On trade with Asia, Trump puts America last."