Much like Mussolini (for whom things did not end well), Donald Trump likes to strut around and act the tough guy. Part of this tough guy/bully routine is Trump's self-created trade war which is already beginning to kill American jobs. But worse days are likely to come for both American workers more of whom will lose jobs and American consumers who will find themselves paying higher prices for numerous goods. All so a foul narcissist can feed his insatiable ego and play to the knuckle dragging base of the Republican Party. A column by a former U.S. Trade Representative looks at America's increasingly alienated allies working to form new trading alliances that exclude America. Here are highlights:
Diversification is the polite way of saying that America’s friends and allies believe we have become an unreliable partner, and they are now looking elsewhere. From Ottawa to Brussels to Seoul, our trading partners are fed up with the Trump administration’s tariffs, and they have given up on trying to charm
PresidentTrump or persuade him that free trade is good. To reduce their economic dependence on the United States and their exposure to a potential global trade war, they are forging trade deals that leave us out of the picture altogether.
On June 14, Canada’s government asked Parliament to ratify a new version of the Trans-Pacific Partnership, which the United States backed out of last year. On June 18, the European Union trade commissioner visited Australia and three days later, New Zealand to begin negotiations for free-trade agreements; and on June 22, South Korea announced plans to pursue negotiations for its first free-trade agreement with Russia.
These moves are a direct response to the Trump administration’s unreliability and unpredictability, and they are a clear sign that the administration’s trade policy priorities — renegotiating deals and punishing violations — are not working out as expected.
The presidentmay want better deals to replace the old, “terrible” deals he doesn’t like, but so far, the rest of the world has been reluctant to negotiate new agreements with the United States. The long and growing list of tariffs, particularly those based on dubious national security grounds, has weakened the administration’s ability to form coalitions with other countries to tackle legitimate concerns, especially China’s unfair trade practices.
Instead, our closest trading partners are scrambling to find new markets for exports subject to tariff increases by the United States, and to secure new suppliers for the American products that their own countries are planning to hit with retaliatory tariffs.
Japan is thus accelerating negotiations with other countries. Japan and the European Union plan to sign their free-trade agreement in July. Moreover, it was Japan who stepped up to fill the leadership void left by the American exit from the Trans-Pacific Partnership. The Japanese Diet approved a bill to ratify the revised pact this month.
The tone and policies of the Trump administration have even managed to bring two longtime rivals, China and Mexico, closer together. The two countries once competed head-to-head as low-cost manufacturers, with the United States as the most important market. After Mr. Trump began beating the drum for tariffs and a possible withdrawal from Nafta, Mexico’s economy minister, Ildefonso Guajardo, called a visit last year to China “strategic leverage,” saying it “sends the signal that we have alternatives” to the United States.
Regrettably, this leaves the United States on the margins as the rest of the world builds a new trading structure without us. Our workers, farmers and companies will be locked out of important markets. We will lose our chance to help write the rules and set standards for trade in advanced technology, such as alternative-fuel vehicles, 3-D printing and artificial intelligence. Global and regional supply chains will increasingly bypass the United States. And years of efforts by the United States to curb China’s unfair trade practices will lose critical international support.
To be sure, as the world’s largest economy, the United States will remain a major player in international commerce. . . . There is a danger, however, in overestimating our negotiating leverage. Trade patterns will shift as our partners look elsewhere. We have spent decades building trust with our allies. We are now squandering it.