Skip to main content

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated Cookie policy, Privacy policy and Terms & Conditions

US Mexico border John Moore/Getty Images

Trump’s Trade Illogic

As the Trump administration prepares to renegotiate NAFTA, the underlying logic of the US’s new approach to trade is about to receive prime-time scrutiny. When it does, the missed opportunities – on labor, subsidies, and competitiveness, and much else – will be impossible to ignore.

LONDON – With all the public attention in the United States focused on health care, immigration, and Russia, the Trump administration’s trade policies have flown largely under the radar. But the underlying logic of President Donald Trump’s approach to trade is about to receive prime-time scrutiny, because the landmark North American Free Trade Agreement (NAFTA) will come up for renegotiation later this summer. When it does, three fundamental flaws in Trump’s thinking will be exposed.

For starters, there is Trump’s false premise that bad trade deals have cost US jobs. Automation and robotics led to the decline in manufacturing jobs in developed economies long before any major trade agreements were concluded. The forces of globalization may have aggravated these trends, but the point so often lost in the debate – and dismissed by so many on all sides – is that trade agreements are meant to tame the forces of globalization, not accelerate them.

With world tariffs declining for decades, today’s negotiations focus mostly on the rules that govern international commerce. The Trans-Pacific Partnership (TPP) trade agreement, which Trump abandoned with such fanfare after taking office, spelled out a range of enforceable commitments intended to level the playing field for US workers.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

https://prosyn.org/gLP4y8A;

Handpicked to read next

  1. elerian122_Peter MacdiarmidGetty Images for Somerset House_bigdatascreentechman Peter Macdiarmid/Getty Images for Somerset House

    Adapting to a Fast-Forward World

    Mohamed A. El-Erian

    The world is going through a period of accelerating change, as four secular developments illustrate. Firms and governments must make timely adjustments, not only to their business models and operational approaches, but also to both their tactical and strategic mindsets.

    12

Edit Newsletter Preferences