First They Came for the TPP

The populist campaign that propelled Donald Trump to a shocking victory was as heavy on bluster as it was weak on detail and consistency – but if he did maintain one theme, it was his stance as an anti-immigration and anti-trade man of the people. His “America first” rhetoric resonated with many Americans on a number of different levels, tapping into cultural insecurity, economic malaise, fear of terrorism, and, of course, xenophobia. Indeed, the real genius of Trump’s campaign may have been his unequivocal break from the internationalist/globalist bipartisan consensus that free trade is a cornerstone of the “economic foundations of peace,” in the words of President Franklin D. Roosevelt.

Trump will now need to show that he is following up on his promise to “get a better deal for our workers.” Indeed, CNN has reported on a memo from Trump’s transition team that sketches out his administration’s trade policy agenda for the first 200 days. Though this is just preliminary, we should expect him to act on his trade and economic promises. What can he do, and what does this mean for the American and European economies?

The unsettling fact is that Trump will have the legal authority to make some dramatic systemic changes on day one. The separation of powers and tenuous party discipline in US politics constrain a president’s power domestically, but not when it comes to trade policy. According to the constitution, Congress has the power to regulate commerce between states and with other countries; however, through a number of different statutes Congress has handed this power over to the executive branch. The president can unilaterally stop all forms of commerce between the United States and another nation, seize or freeze foreign assets, impose tariffs, etc. So Trump can, in fact, withdraw the US from existing trade agreements or levy tariffs on China immediately. Congress could revoke these powers, but this would likely take time.

^{Photo credit: Neil Ballantyne}