Donald Trump has talked tough on trade, signalling an inward shift in focus for the US, and a reassessing of trade agreements. Trump has already pulled the US out of the twelve country Trans-Pacific partnership.
But rather than wait and see what the erratic multi-messaging trump ends up doing there are signs the world is looking at trade without relying on the US.
So Trump’s ‘America First’ approach may end up being a double edged sword. If he slashes trade opportunities with countries around the world those countries may do some slashing of their own – or at least simply look elsewhere.
New York Times: Trump’s Trade War May Have Already Begun
America’s traditional allies are on the lookout for new friends.
They have heard the mantra “America First” from the new president, divining a Trump doctrine: global cooperation last. Europeans have taken note of Mr. Trump’s denigration of the European Union and his apparent esteem for the Russian president, Vladimir V. Putin. In Asia and Latin America, leaders have absorbed the deepening possibility that Mr. Trump will deliver on threats to impose punitive tariffs on Mexican and Chinese imports, provoking a trade war that will damage economic growth and eliminate jobs around the world.
Some allies are shifting focus to other potential partners for new sources of trade and investment, relationships that could influence political, diplomatic and military ties. Many are looking to China, which has adroitly capitalized on a leadership vacuum in world affairs by offering itself — ironies notwithstanding — as a champion for global engagement.
And China appears to be taking advantage of the opportunities effectively being handed to them by Trumps USA.
China is working to assume the mantle. President Xi Jinping of China last week used an address in Davos, to submit his nation’s bid as a reliable champion of expanded trade.
China does not have free elections. China jails labor organizers, while lavishing credit on state-owned enterprises. All of this makes Mr. Xi an ironic choice as an icon for free trade. Yet Mr. Xi’s speech was so successful that it won the embrace of business people and world leaders alike.
At a lunch in Davos two days after Mr. Xi’s address, a Berlin-based private equity fund manager, André Loesekrug-Pietri, stood in a dining room full of more than 100 people and predicted the dawning of a new era.
“We heard a Chinese president becoming the leader of the free world,” he said.