By William Reinsch
I started to write a comment on President Trump’s first 100 days last week but then put it aside because the NAFTA follies at the end of April were simply too tempting to pass up. Now that he has passed his 110th day, I want to get back to it; otherwise I might have to wait until his 200th to make an evaluation. The minimal bottom line, of course, is that day 100 has come and gone, and we’re all still here, despite the fears of some. But survival is a pretty low bar even under current circumstances, and it’s worth spending a few minutes on whether we actually did better than that.
My conclusion is that we did do better than that, although this is a case where success will always be measured as much by what did not happen as by what did happen. President Trump arrived in office having made a pile of trade-related commitments, notably dumping TPP and NAFTA, declaring China a currency manipulator, evaluating and possibly renegotiating all our trade agreements (particularly those with countries where we have a deficit), significantly increasing enforcement of our trade laws, and eliminating the Export-Import Bank.
So far he has reversed himself on two of those (China currency and Eximbank), delayed one (NAFTA), accomplished one (TPP), and started wheels moving on the others. From the perspective of accomplishment, that’s not much of a record — but from the standpoint of good public policy, he’s done much better. Not declaring China a currency manipulator was a wise move that both implicitly acknowledged the facts (i.e. they are not doing it, at least not now) and pushed the bilateral relationship in a more positive direction, at least temporarily. Likewise, deciding the Eximbank is a good idea was smart, although nominating an outspoken opponent to run it undercut his message more than a little bit. Deciding to renegotiate rather than terminate NAFTA, apparently a close call in his mind, allowed our biggest trading relationship to dodge a bullet and set up the possibility of upgrading the 23 year old agreement in ways that would actually be helpful. Starting reviews of other agreements and expanding our enforcement efforts, as he has done on steel and aluminum, are not inherently bad things, although they could lead to problems depending on what is actually done.
Far and away his biggest specific mistake was the decision to dump TPP. It was always going to be an uphill battle in the Congress, but by preemptively opting out he removed our best strategy for demonstrating our continued presence in Asia and in the process yielded primacy in the region to China. It’s going to take more than building a bigger navy to restore our position there and reassure our Asian friends and allies that we are a Pacific power in it for the long-term.
The strongest pro-TPP arguments have always been foreign policy and security rather than market access, and it is noteworthy that the president appeared to recognize how those different priorities intersect when he so clearly stated that not declaring China a currency manipulator was directly related to his efforts to obtain their help in dealing with North Korea. Unfortunately, he has yet to put two and two together and see the same intersection in TPP and also in NAFTA. The trilateral relationship goes way beyond trade, and jeopardizing it will have a host of implications in other areas including cooperation on national security, drug interdiction, and migration. Hopefully he’ll connect the dots in North America as he apparently has in Asia.
We should also hope he connects them in Europe as well, as the same complex intertwining of issues exists there. That there are recent signs of Trumpian interest in a deal with the EU is also good news, although all parties understand real action awaits the outcome of the French and German elections.
What is most disturbing about the first 100 days, however, is not the outcome of specific policy decisions but rather the inconsistency and resulting unreliability of the president’s statements and actions. One friend likened our trade policy to a squirrel in the middle of the road panicking at the approaching car and not knowing which way to go. Another compared it to Mr. Toad’s Wild Ride at Disney World. There are differences. The squirrel is as likely as not to end up squashed. Mr. Toad always brings his car back home safely, at least at Disney World.
It’s tempting to spend a paragraph or two on whether Donald Trump is the squirrel or the toad —instead I will simply close with a reminder that having a clear and consistent policy, whatever it is, lets our trading partners know that we are dependable and trustworthy. The United States — and the rest of the world — has gained a lot over the years precisely because we have been that. Abandoning that now would have a host of negative repercussions both short and long-term.
William Reinsch is a Distinguished Fellow with the Stimson Center, where he works principally with the Center’s Trade21 initiative.