3_cassidy, John. Donald Trump’s New World Disorder

John Cassidy

Donald Trump’s New World Disorder By John Cassidy

January 24, 2017

In withdrawing America from the T.P.P., Trump has disowned the U.S.-led model of globalization and free trade that both political parties have subscribed to for decades. Photograph by Ron Sachs / Pool / Getty

n his rst full working day as President, Donald Trump chose to get things going by signing an executive order withdrawing the United States from the TransPaci c Partnership, a edgling free-trade agreement that brought together a dozen Paci c Rim nations, including Australia, Japan, Malaysia, Mexico, Peru, and Vietnam. Future historians may look back on the signing as an event of epochal importance.

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Yes, the move was widely expected. The T.P.P. has long been in serious political trouble. Throughout the Presidential campaign, Trump inveighed against the agreement as

contrary to the interests of American workers; so did Bernie Sanders. Even Hillary Clinton, who once described the T.P.P. as "the gold standard" of free-trade deals, eventually dropped her support for it. It is also true that the immediate economic impact of the T.P.P.’s demise will be minor. The United States already engages in extensive commerce with most of the pact's signatories, and many trade barriers have already been removed. As my colleague Adam Davidson pointed out on Monday, the pro-T.P.P. Peterson Institute for International Economics estimated that, by 2030, the agreement would have raised American G.D.P. even smaller. smaller. by just half a percentage point. Some other estimates were even It is tempting, then, to view Trump's move as a merely symbolic action. But symbols sometimes matter a lot, and this may prove to be such an instance. In pulling America out of the T.P.P., the Trump Administration has effectively disowned the U.S.-led model of globalization and free trade that both of the country’s major parties have subscribed to for decades. The move also created more uncertainty about the world's most important bilateral relationship: the one between the United States and China. Since the end of the Second World War, the United States has promoted global economic integration on the basis of multilateral free-trade agreements. This policy stance was adopted in response to what had happened during the early nineteenthirties, when the imposition of the Smoot-Hawley tariff sparked a trade war that broadened and deepened the Great Depression. The U.S. embrace of free trade was squarely based on self-interest. With much of Europe and Asia in ruins following the war, the U.S. economy was indisputably the world's strongest, and its rms were keen on expanding their markets abroad. In return for U.S. nancial help in postwar reconstruction, nations such as Germany and Japan agreed to embrace an open trading system. In Geneva in 1947, twenty-three countries, led by the United States, reached a deal, the General Agreement on Tariffs and Trade ( ), to reduce tariff barriers and other impediments to commerce. Over the ensuing ve decades, the was steadily expanded, and by 1990 more than a hundred countries had signed up. In 1994, it gave way to the World Trade Organization (W.T.O.), which now has a hundred and sixty-four members, including China—a member since 2001.

These multinational agreements greatly stimulated global trade. Between 1948 and 1968, the over-all volume of merchandise exports from non-communist countries tripled. Since then, the total value of global exports has risen sevenfold. U.S. exporters have bene tted greatly from this explosion in commerce, and so have U.S. consumers, who have seen the prices of many imported goods fall. Especially after the completion of the North American Free Trade Agreement ( ), in 1994, however, many Americans came to view free trade as a job killer and an impediment to wage growth— concerns that, in some cases, were rooted in reality. According to a 2015 study by economists at M.I.T. and the University of California, San Diego, between 1999 and 2011, cheap Chinese imports eliminated about ve hundred and sixty thousand U.S. manufacturing jobs, and perhaps as many as 2.2 million jobs in total.

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Trump's Presidential campaign was fuelled by this popular backlash. In addition to withdrawing from the T.P.P., the new Administration has said it wants to renegotiate , and it has threatened to impose tariffs of as much as thirty- ve per cent on Mexican goods if it doesn't get its way. Such punitive measures could violate the laws of the W.T.O., which might well rule against the United States. If that happened, Trump's options would range from ignoring the body to "pulling out of the WTO altogether," the Financial Times noted, in an editorial on Tuesday. "That would bring the architecture of global trade policy for the past 70 years crashing to the ground." VIDEO FROM THE N

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Obviously, that's a worst-case scenario. But the T.P.P. decision will have other consequences. Rather than relying on multilateral trade agreements, Trump has said that he will negotiate one-on-one deals with individual countries, beginning, possibly, with the post-Brexit United Kingdom. Just because the United States has turned its back on multilateralism doesn't mean other countries will follow suit, however. Shortly after Trump signed his executive order on Monday, Australia, New Zealand, and Singapore—three allies of the United States—said that they might go ahead with the T.P.P. without America. Australia's Prime Minister, Malcolm Turnbull, added that inviting China to join the partnership was also a possibility. Most Asia experts regard that as an unlikely outcome. Rather than coveting membership in the T.P.P., China is keen to promote a rival pact, the Regional Comprehensive Economic Partnership, in which it plays a prominent role. Either way, Trump's accession to office presented the Chinese with a big opportunity. At the World Economic Forum, last week in Davos, Xi Jinping, China's President, portrayed China as a fervent defender of free trade and open markets, saying that "globalization has powered global growth and facilitated . . . advances in science, technology and civilization.” Backing up Xi's speech, a senior official in the Chinese foreign ministry

said on Monday, "If it's necessary for China to play the role of leader, then China must take on this responsibility." There is something ironic here. On numerous occasions, Trump has vowed to check China's growing economic and strategic power, which, in his zero-sum view of the world, represents a grave threat to the United States. But he has now scuttled a trade agreement that the Bush and Obama Administrations both saw as a vehicle to bolster American in uence in the Paci c region, to de ne the rules of the economic game in ways favorable to the United States, and to provide some counterweight to China's economic in uence. Neither Bush nor Obama had spelled out this last aim, but it was well understood by all the participants, and by many T.P.P. supporters in Congress. One of them, Senator John McCain, called Trump’s decision this week " a serious mistake that will have lasting consequences for America’s economy and our strategic position in the AsiaPaci c region. . . . And it will send a troubling signal of American disengagement in the Asia-Paci c region at a time we can least afford it." The question, now that Trump has junked the T.P.P., is how he will deal with Beijing.  On trade issues, he evidently intends to go one on one and demand big concessions. Last week, Wilbur Ross, his Commerce Secretary, described China as "the most protectionist of very large countries." But the Chinese are likely to insist that any American complaints be dealt with through the W.T.O. If Trump responds by threatening to impose hefty tariffs on goods produced in China, he could well cause a crash in the global nancial markets. And that would be just the beginning. The new Administration is also indicating that it might challenge China militarily in the South China Sea, where China has asserted sovereignty over some small islands that are located in international waters. On Monday, Sean Spicer, Trump's spokesman, said, "We're going to make sure that we defend international territories from being taken over by one country." In response, a Chinese foreign-ministry official  said on Tuesday, "We urge the United States to respect the facts, speak and act cautiously to Tuesday avoid harming the peace and stability of the South China Sea." It is perhaps too early to read very much into this verbal jousting. But when you combine Trump's disregard for multilateral agreements and organizations (which also

seems to extend to and the European Union) with his appetite for challenging countries, institutions, and people on an individual basis, it is hard not to be concerned about where things are heading—and not just with China. In 1990, after the Berlin Wall came down, one of Trump's Republican predecessors, New World World Order Order,” in which all the George H. W. Bush, talked about establishing a “New world's nations could "prosper and live in harmony." That turned out to be largely wishful thinking. But, for more than twenty- ve years, the United States continued to pursue the postwar vision of an open global trading system, which developing countries such as China and India could choose to participate in—as they eventually did. Trump's "America First" vision is very different. It is parochial, overtly nationalist, and focussed on obtaining immediate bene ts for his alienated supporters. If he isn't careful, it could turn out to be a recipe for a New World Disorder.

John Cassidy has been a staff writer at The New Yorker since 1995. He also writes a column about politics, economics, and more for newyorker.com. Read more »

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