As he promised in his campaign, shortly after being sworn in, President Donald J. Trump rejected the Trans-Pacific Partnership. He has also vowed to re-negotiate or even pull out of NAFTA, and has threatened China over its trade practices (including currency manipulation, which experts say it no longer engages in). These moves and noise toward U.S. protectionism became all the more clear last week, when the administration informed Congress that the U.S. may start to unilaterally impose tariffs on any country that the U.S. considers to have unfair trade practices. If adopted, the new policy would mean a stark departure from WTO rules, and could easily bring about a trade war against the United States. And it signals that the primary architect of the liberal trading order may be about to walk away to go it alone.
The vacuum would accelerate China’s rise as a global trade partner. China is now the second largest export destination for Latin American products and a key investor in the region. Is China about to set the rules for the new terms of trade?
Cartoon credit: RJ Matson, Roll Call