On Tuesday, America voted for an aggressive and confrontational posture toward China. There is no shortage of absurdity in the fact that no one will likely benefit more from Washington’s newly antagonistic relationship with Beijing than Beijing, and the Chinese Communist Party knows it.
It’s not entirely clear what Donald Trump will do as president. His advisors have already begun to walk back tough talk regarding the construction of a wall along the border, the repeal of the Affordable Care Act, and his absurd bluster on matters in the Middle East. Trump’s close economic advisors have also begun to pare back their tough talk about the start of a “trade war” with China—a policy so central to Trump’s campaign that his team made it their second issue on the candidate’s issues page.
Who knows what Donald Trump’s policies will be, but it remains highly unlikely that the 12-member Trans-Pacific Partnership free-trade zone will survive the new populist moment. A free-trade zone that took eight years to draft and to secure was designed to create a trading bloc that standardized and liberalized trade regimes in a variety of Asian and South American nations. As an added political benefit, the agreement would box in the region’s rising hegemon, China. In a post-TPP world, Washington would be setting the rules of the road when it came to trade in Asia, compelling Beijing to either adopt those standards or fail to enjoy the associated benefits.
That was yesterday. If Donald Trump means what he says, the United States will not only retrench militarily under his administration, but it will also retreat economically. That inward withdrawal will create a vacuum that China is eager to fill. The collapse of the TPP would likely soon give rise to the creation of a smaller, regional trade bloc: the Regional Comprehensive Economic Partnership (RCEP). This arrangement, which would include nations like China, Japan, India, and other East and South Asian nations, would not be distinguished by American standards of commercial conduct. It would, however, reduce the tariff burden on Japan and China, making their export costs cheaper and growing their economies.
What’s more, without TPP, American exports are going to lose preferential access to Asian markets. “Without the TPP, U.S. beef, which faces a 38.5% tariff in Japan, is currently at a disadvantage to Australian beef, causing losses of $400,000 in sales a day for U.S. ranchers,” the Wall Street Journal reported by way of example. Australian Foreign Minister Julie Bishop told the Journal in a subsequent dispatch that Canberra is eager to move forward with the RCEP trade agreement so as to ensure that China does not fill the vacuum left by an ignored and forgotten TPP.
China is on the march. In the Philippines, an aggressive and populist president in Manilla declared his intention to reorient his country—a historic ally of the United States—toward Beijing. China also managed to win a trade agreement with Malaysia. The U.K. is “open for business” with the People’s Republic, declared British Prime Minister Teresa May.
And what would American punitive measures on Beijing achieve? Not much. China’s export economy is less dependent upon the U.S. than ever, even as America has become more dependent on Chinese imports. “[H]igher tariffs against Chinese products would push some exporters to more quickly automate and focus on higher-margin products, ultimately making them tougher competitors,” a Journal report revealed.
In electing Donald Trump, America took a razor to its neck and promised to self-harm unless everyone agreed to reinstate the 20th Century. Unsurprisingly, the world has declined to comply with American demands. Either the United States will press forward with global integration and assume its role as guarantor of and chief beneficiary from the current geopolitical order or it will cede those privileges to more deserving powers. For the moment, America intends to shoot itself in the foot. The world isn’t going to rush to stop our bleeding.
