In his first week of office, he not only tore up what was supposed to be the legacy-defining TPP from the Obama years, but also declared that he's going to renegotiate the Clinton-era NAFTA deal with Canada and Mexico. The American withdrawal from the TPP signals that the ambitious economic counterpart to the so-called "Pivot to Asia" is now dead and will probably be replaced with a series of bilateral trade deals, if at all. Nevertheless, the agreement itself had yet to enter into force, unlike NAFTA which has been around since 1994. Renegotiating this deeply entrenched trade agreement which has become a mainstay of global economic affairs is bound to lead to unintended consequences, whether for better or for worse, though it demonstrates Trump's commitment to lessen the burden that it’s imposed on American workers.
Taken together, some observers have said that Trump's withdrawal from the TPP and his stated intentions to renegotiate NAFTA amount to what can be described as a protectionist economic policy which stands in stark contrast to Chinese President Xi's embrace of globalization at the elite Davos Summit earlier this month. The US and China are two of the world's three largest economies, though they now appear to be moving on two completely different trajectories despite the complex interdependence between them. Nobody quite knows for sure what this means for the future of the global economy, but one thing is certain, and it's that the competition between these two rivals is only going to get fiercer and more pronounced in the coming future. Trump is betting that his rejection of globalization will give his country a long-term edge over China, but questions remain about the consequences of transitioning one of the engines of the world economy to a supposedly protectionist system.
Chris Shipler, American political commentator, and Laurence J. Kotlikoff, Professor of Economics at Boston University and a prominent author, joined us to discuss the issue.
We'd love to get your feedback at firstname.lastname@example.org.
Have you heard the news? Sign up to our Telegram channel and we'll keep you up to speed!