In Trump’s insignificant little mind he is a master of “the deal,” but his alleged prowess in “dealing” with America’s international trading partners is proving to be a significant detriment to nearly every industry in the United States. That fact was manifest in grand fashion when as expected, Japan and the European Union signed a major trade agreement that is as much a slap in Trump’s bloated orange face as it is going to be an economic benefit to the nations involved – nations that will not include the United States.
President Barack Obama, and this nation’s leading economists, manufacturing industries and corporate leaders, were avid supporters of the Trans Pacific Partnership (TPP) because it allowed America to dictate its own economic destiny. The concept of America ever being able to dictate, or control, its own economic destiny died the day of Trump’s poorly attended inauguration. That is the day when reality sunk in that a know-nothing television celebrity intended to “make America great” by abandoning hard-fought trade agreements negotiated solely to benefit American industries. That reality prompted America’s trading partners to begin seeking new trade agreements without the isolationist-minded United States’ involvement; the Japan and the European Union agreement is a result of Trump’s plan to make America great by isolating it from the rest of the world.
The agreement signed last week is the culmination of negotiations that began exactly one year ago during the so-called G20 economic summit in Hamburg Germany. Those negotiations were a direct result of Trump unilaterally withdrawing America from the TTP and coupled with his campaign pledge to force Canada and Mexico to renegotiate the North American Free Trade Agreement (NAFTA).
It is noteworthy that just the threat of America reneging on its NAFTA agreement prompted Mexico to initiate its so-called “Plan B” and begin negotiations with other nations eager to supplant America’s powerful agriculture sector. Those negotiations have yielded agreements that benefit Mexico and several other nations at the expense of America’s agriculture sector; the new EU-Japan Economic Partnership Agreement (EPA) deals an additional blow to American farmers.
The new EPA drastically reduces “most bilateral tariffs including high Japanese duties on EU products and EU tariffs on Japanese automobiles.” The European Commission projects that the EPA will eliminate roughly $1.2 billion in tariffs for EU exporters and “double the amount for Japanese companies.” Because of Trump, American exporters will be at a major trade disadvantage because they are now “isolated” from the “free-trade zone” the countries making up around 30 percent of the world’s GDP now enjoy. As noted by Bob Bryan writing for Business Insider, “The EPA is the just the latest in a series of liberalizing agreements that have been initiated or formalized by major economic powers around the world;” all while Trump is isolating America and antagonizing the country’s allies and trading partners as a matter of course.
That isolationism and protectionism Trump champions is also one of the reasons the EPA was signed in a very public way. Japanese Prime Minister Shinzo Abe and European Council President Donald Tusk were forthright in telling the rest of the civilized world why they acted decisively without American participation. Mr. Tusk said:
“This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order. We are sending a clear message that we stand together against protectionism.”
Prime Minister Abe also leveled some criticism Trump’s way and rightly asserted that Japan and the EU were taking the lead in international trade that America once enjoyed. Mr. Abe said:
“While protectionism is spreading in the world, Japan and the European Union will take the lead as flag bearers for free trade.”
It bears repeating, ad nauseam, that America is being left out of more and more free trade deals due to Trump. While the imbecile in the White House consults his own moronic mind on international trade, the world’s other “major economic powers” have been negotiating similar deals to the EPA over the past year or so. It is true that some of the deals were in the works prior to Trump, but the loss of America’s leadership prompted the rest of the world to expedite their commitment to free trade and eliminate the barriers like those Trump is erecting on America’s trading partners.
This EPA deal is not the EU’s only foray into international trade as the new world leader. The EU is in the process of ratifying “a landmark agreement with Canada” and “pursuing deals with Mexico, Australia, and the so-called “Mercosur;” a trading bloc made up of Argentina, Brazil, Paraguay, and Uruguay. The EU is also in talks with China that recently “lowered tariffs on products including vehicles and launched talks with the EU to build a stronger trade relationship;” all while Trump is doing everything in his power to decimate America’s trade relationships with ill-advised unilateral tariffs.
In fact, last Monday, China and the European Union economic leaders issued a rare joint statement reiterating their dedication “to resisting protectionism and unilateralism, and making globalization more open, balanced, inclusive, and beneficial to all;” except for America with its isolationist malcontent incapable of comprehending the benefits of participating in, much less leading, a global economy.
It is unclear how much damage to America Republicans and their corporate funders are going to allow Trump to single-handedly inflict on the nation’s economy before they say enough. He has created a disaster for the agriculture industry with idiotic immigration policies, tariffs, withdrawing from the TTP and just threatening to balk on America’s commitment to NAFTA. And the downstream damage to American manufacturers due to tariffs on steel and aluminum is going to be significantly devastating. All the while, Trump’s supporters who are the first casualties of his isolationism maintain their undying support for him. It is almost certain they will continue their support even as they lose their livelihoods and suffer higher prices due to Trump’s tariffs.
It is a travesty that although America is a powerful economic force, it ceded its global leadership to other nations like Japan, Canada, China, and the European Union simply because Trump fails to recognize the benefits of globalization and the value of free trade. The bigger travesty is that Trump’s supporters, those who are already feeling the effects of his isolationist and protectionist policies, will continue supporting him for two overriding reasons unrelated to international trade; he pledge to make America white and Christian.
Image: South China Morning Post