Donald Trump’s determination to stamp his mark on US trade policy “would be horribly destructive”, according to the most exhaustive assessment of his pre-election tweets, speeches and declarations in Fox News interviews.
Among the more consistent themes in his various pronouncements, the president-elect said he would tear up the Nafta agreement that gives Mexico tariff-free access to US markets on about half of its goods.
Trump also threatened to impose tariffs on China, which he said could be as much as 35%, to punish the Beijing for a policy of “currency manipulation”.
The Trans-Pacific Partnership (TPP) agreement, president Obama’s hard-won free trade agreement with Japan, Australia and much of the Pacific rim, which lowers tariffs on a wide range of goods, will be thrown in the Oval Office bin, if a Trump video outlining his policies in the first 100 days is anything to go by.
The Peterson Institute, a non-partisan thinktank in Washington, said in its September report assessing trade agendas in the US presidential campaign that the sum of all these moves would bring the US recovery to a juddering halt, and possibly plunge it into recession.
The institute’s chairman, Adam Posen, a former Bank of England policymaker, said in his foreword to the report: “The belligerent trade policies proposed by Trump would devastate viable American businesses and their vicinities.”
But as the inauguration nears, it looks like the doomsday scenario put forward not just by Posen, but also in the pages of Forbes, Fortune and much of the US media, can be put on ice.
Just as Trump is turning his attention away from prosecuting Hillary Clinton, so a trade war with the Chinese and Mexicans is no longer a priority.
Of the three main threats to trade, only axing the TPP agreement looks likely to happen, since it has yet to be ratified by Congress and remains, like the Paris climate deal, a White House policy, not a US policy.
Marcus Noland, an author of the Peterson Institute report, says signals from the Trump camp indicate he has also shelved his threatened war on China and Japan while he focuses on domestic concerns.