As former champion of global free trade turns on friends and foes alike, Tim Collard warns world needs to brace for an uncertain future
In Benjamin Britten’s opera Billy Budd, set in the wars between Britain and revolutionary France, a group of British naval officers denounce their enemies: “France, who pretends to love mankind, and is at war with the world!” It is tempting to make a direct comparison with the “revolutionary” United States which has emerged since Donald Trump’s election as president in 2016. The US still takes the moral high ground on “defense of freedom” and “human rights” but appears strangely unconcerned about engaging peaceably with the rest of the world. On the contrary, Trump has with fanfare and fanciful excuses torn up his predecessor’s milestone international agreements reached after many years of meticulous negotiations to ensure a more peaceful co-existence among the family of nations.
Free trade was once a key American principle, just as much as free speech, but Trump’s for-domestic-consumption-only populist approach seems to have stood the whole concept on its head. It is not just free trade to which this posture applies: Since Trump’s assumption of office last year the US has reneged on a whole raft of international commitments, from the Trans-Pacific Partnership to the Paris climate change accord to the nuclear deal with Iran. He has also indulged in bitter criticism of the US’s traditional close allies in NATO and the Group of Seven leading industrialized nations. This bull-at-a-gate approach to the outside world, which may or may not resolve itself into a more pacific position (as on the Democratic People’s Republic of Korea) has sometimes been called “Trumplomacy”.
Thus, following a series of threats to increase tariffs on foreign trade, which some people may have thought were intended just as initial negotiating positions, Trump has shown he means business, or rather non-business, by slapping tariffs on Canada, Mexico and the European Union. And now he is raising the stakes by placing high export tariffs on China, the only potential rival to the US in terms of economic power. No one can ever accuse Trump of stepping back from a fight; but is it wise to take on the whole world at once? Even a short-term victory on all fronts would only lead to indelible medium-term resentment on all sides.
That is not to say that there is no upside to “Trumplomacy”. In the first half of this year Trump has found a way from overt threats of unilateral nuclear attacks on DPRK to a rather emollient initial outline for a historic compromise. But does he think this formula will work in all circumstances and for all problems?
It is a truism that trade wars do not benefit anyone, at least in the short term, and a certain amount of pain must be borne by both sides. A US-China trade war will come down to a trial of endurance between current American economic strength and Chinese resilience and economic management. The US stock markets, which always respond negatively to uncertainty, have already taken a hit. For China the timing is less than ideal in view of the recent deterioration in the value of the renminbi, which will test the economic authorities’ grip to the utmost.
But it surely cannot be Trump’s intention to commit his country to a long, drawn-out conflict with China, especially as US behavior in other parts of the world is likely to leave him short of reliable allies. The stimulus recently given to the US economy by Trump’s much-vaunted tax cuts will not last forever. Nor will he be able to impose a new global trading order unilaterally, which would appear to be his current aim: As well as other countries and trading groups, Trump has also gone into all-out attack mode on the World Trade Organization system. He has announced plans to bring in a “Fair and Reciprocal Tariff Act”, which would give him the ability to raise tariffs without the consent of Congress, and to disregard international rules at will. This will be highly contentious within the US as well as abroad, and shows a severe sense of humor failure in the White House: The acronym for this act would be “FART”.
It is difficult to imagine the Chinese, say, introducing legislation with a name which would be shortened to fang pi.
In practice this legislation would let the US raise tariffs above ceilings agreed by WTO member states, and to set different tariff rates for individual nations irrespective of existing free-trade agreements. It is bound to revive earlier speculation that Trump may be planning to extend his go-it-alone policy as far as withdrawing the US from the WTO altogether. Considering that the US was central to formation of the WTO in the first place, and that the organization has provided real, demonstrable and universal benefits for decades, this would be an alarming policy shift even by Trump’s standards.
The US Treasury Secretary Steve Mnuchin has recently denied that Trump has any such intention, and emphasized the president’s continuing “commitment” to free trade though his actions say otherwise. It has also been repeatedly demonstrated that even Trump’s closest associates often do not know what he is going to do next. The world will have to wait and see, and prepare defensive positions.
The author is a sinologist and former British diplomat in Beijing