Trump’s Withdrawal from TPP Leaves Pacific Rim Economy Unstable
On Monday, Donald Trump officially abandoned the signature trade deal of his predecessor, Barack Obama. In a highly publicized event, Trump signed an executive order effectively ending presidential support for the Trans- Pacific Partnership, or TPP. Since Congress had not yet approved the TPP, Trump’s gesture to abandon it was primarily symbolic.
Nevertheless, the order represents the end of an economic era defined by free trade agreements and open borders. Trump billed the agreement as a “potential disaster for our country,” and has repeatedly criticized other free trade agreements, such as NAFTA, deeming the agreements bad for American jobs. Trump’s opposition to free trade was a campaign staple, and Monday’s executive order suggests that he fully intends to isolate the country from decades of economic globalization.
According to the BBC, the TPP’s stated aim was to “strengthen economic ties and boost growth, including by reducing tariffs.” The agreement included twelve Pacific countries, 36% of the total global economy, and 843.6 billion dollars of US imports. China was notoriously absent from this list, and according to some critics speaking to the BBC, the TPP was a “not-so-secret gambit to box in China.”
In his blog, Professor Jagdish Bhagwati, a law and economics professor at Columbia University, states “the TPP is also a political response to China’s aggressiveness, built therefor in a spirit of confrontation and containment.” As a result, Trump’s withdrawal from the agreement has left a geopolitical vacuum. In speaking with The Washington Post, Fred Bergsen, the former director of the Peterson Institute for International Economics, said “if we look back five years from now, ten years from now, you could say this was a turning point, at which China did move up in the direction of asserting the kind of global leadership role that the U.S. has had for about a century and might willfully be abdicating.”
On Tuesday, Chinese President Xi Jinping spoke at a global economic conference in Davos. Washington Post analysts say that his appearance at the conference “suggested a claim to the kind of international economic stewardship that Trump has rejected.”
Trump’s withdrawal from the TPP is not just an economic decision; it is a philosophical one. He has given up the mantle of American global leadership. Bonnie Glaser, an expert on China at the Washington-based Center for Strategic and International Studies, says the executive order’s “subtext is that the United States and the West are no longer the stabilizing factors in the world order.”
Despite Trump’s repeated assertions that he would be “tough” on China, he seems to be the exact opposite. Instead of supporting a trans- Pacific economic system chaired by the United States, he has relinquished the Pacific economy to the next highest bidder, China.