President’s tactics break with predecessors’ to extract concessions, but issues with China remain unresolved.
By Jacob M. Schlesinger
Updated Dec. 15, 2019 2:17 pm ET
President Trump claimed a multi-front victory last week in his bid to reshape U.S. trade policy under his “America First” philosophy, extracting fresh commercial concessions from Mexico and China—while stripping the World Trade Organization of its powers to restrain the tactics he used to secure them.
Combined, the efforts show an approach toward U.S. trading partners and multinationals that is focused more on forcing corporations to produce domestically and sell American-made goods abroad than on helping them expand their global manufacturing footprint.
On Tuesday, the White House announced the rewrite of the country’s largest trade deal, the 1994 North American Free Trade Agreement, winning approval not only from the compact’s Mexican and Canadian partners but from longtime Nafta opponents among congressional Democrats and organized labor. On Friday, the administration brokered a limited truce with Beijing following a year-and-a-half-long trade war, putting further tariffs on hold and securing an unusual Chinese pledge to boost imports of U.S. goods by a specified dollar amount while trade talks between the two sides continue.
In between those two announcements, the U.S. on Wednesday effectively crippled the Geneva-based WTO trade court that was launched in 1995 to prevent the kinds of trade wars Mr. Trump has deployed to coerce America’s trading partners to the bargaining table. Over the past two years, the administration has blocked the appointment of judges to the court and, after two remaining members’ terms expired, the panel as of last week no longer had enough members to issue decisions and enforce WTO rules.
Many economists, business leaders and members of Congress from both parties say Mr. Trump’s efforts have done little to boost economic activity—other than by defusing the uncertainty he himself stoked with his disruptive acts. But many agree that “this was the week where the first three years of Trump administration trade policy all came together,” said Clete Willems, who worked as a White House trade adviser until April.
Mr. Trump’s administration will now turn to negotiating the next phase of a deal with China—though election-year politics and stiff Chinese resistance might make such an agreement difficult—and to reaching new or expanded pacts with other trading partners, including Japan and the European Union. A new agreement with the U.K. is also a priority after last week’s sweeping election victory of Prime Minister Boris Johnson’s Conservative Party makes a British departure from the EU almost certain.
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