Since the news today will be awash with coverage of the election in Georgia and the circus that will be taking place in Congress, I decided to address another issue today based upon something I read yesterday. Most of the news coverage these days is about how Trump is undermining our democracy which I certainly agree with. However, even when Trump leaves (or is dragged) out of the White House on January 20th, his foreign policy over the last four years will have caused long lasting damage to this country. And the true irony is that much of the damage will be to those people and parts of the country who have so rabidly supported him. Joe Biden will not be able to repair this damage quickly, if at all.
Shortly after taking office Trump pulled the US out of the Trans-Pacific Partnership and launched a trade war with China. He simultaneously began a campaign to offend, intentionally or not, our European allies while insisting on his ‘America first’ policy. So, let’s look at the results of those decisions and what we are left with as part of Trump’s legacy.
According to a study by the Brookings Institute1 the results of Trump’s trade war with China has been costly to America while not producing anything near the results that were promised, and which, most reputable economists doubted at the time.
“A September 2019 study by Moody’s Analytics found that the trade war had already cost the U.S. economy nearly 300,000 jobs and an estimated 0.3% of real GDP. Other studies put the cost to U.S. GDP at about 0.7%. A 2019 report from Bloomberg Economics estimated that the trade war would cost the U.S. economy $316 billion by the end of 2020, while more recent research from the Federal Reserve Bank of New York and Columbia University found that U.S. companies lost at least $1.7 trillion in the price of their stocks as a result of U.S. tariffs imposed on imports from China.
Numerous studies have found that U.S. companies primarily paid for U.S. tariffs, with the cost estimated at nearly $46 billion. The tariffs forced American companies to accept lower profit margins, cut wages and jobs for U.S. workers, defer potential wage hikes or expansions, and raise prices for American consumers or companies. A spokesperson for the American Farm Bureau stated that “farmers have lost the vast majority of what was once a $24 billion market in China” as a result of Chinese retaliatory actions.”1
In addition to the damage to the US that Trump’s trade war has caused, China took full advantage of the vacuum created when the US withdrew from the TPP. This past November, the China-led Regional Comprehensive Economic Partnership (RCEP) was signed by 14 nations in the Pacific region, including such countries as Australia and New Zealand.
And just within this past week, China secured a trade deal with the European Union. This agreement still needs to be ratified but if it is, it will present a major obstacle to any long-term strategy to counter China’s increasing global influence.
“The agreement, if it is ratified, would theoretically loosen restrictions on European companies in China’s tightly controlled market,” wrote my colleague Emily Rauhala. “European companies would no longer be required to operate joint ventures with Chinese partners, for instance, or be forced to share technology.”
Experts in China viewed the developments as a significant win for Beijing. “The deal will deepen the economic ties between China and the E.U., with negotiating a free-trade agreement being the expected next step,” Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai, told the South China Morning Post, a Hong Kong-based daily. “And it will also thwart the U.S. plan to join hands with Europe and isolate China from the future of globalization.”2
This has been in the works for a while. In January of 2017, a rail line from China to the U.K. was established. There are now rail links between China and many European cities that greatly facilitate trade. “According to the Dutch BCI Global, about 150 trains run weekly on the China-EU-China route, covering 30 European and 16 Chinese regions.”3
In a similar manner, China is investing heavily in Africa. “Some of the primary motivations that lie behind China’s push toward increased investments in African nations include the desire to secure a solid base of raw materials to fuel China’s own rapidly growing economy, the desire to increase China’s global political influence, and the major growth opportunity presented by emerging market economies in Africa.”4
While Trump was playing at being President and trying to bully China and bully Europe, the world was moving forward. If Trump had any kind of strategic vision at all, he would have realized that the best way to counter China’s growing influence would be to build strong, broad economic partnerships in the Pacific, with our allies in Europe and in Africa. He did just the opposite and America will be paying the price for many, many years. During Trump’s presidency, America’s presence and influence on the world stage has waned and China’s has increased dramatically.
The game of ‘Go’ was invented in China some 2500 years ago and is more complex than chess. It is a game of patience and long-term strategic thinking. Trump, with his strategic horizon no longer than the next news cycle, is ill suited to play this game. The Chinese are masters at it. If one were to view the world today as a giant ‘Go’ game board, it would be very clear, we are currently getting our ass kicked. And once you get behind in this game, it is very difficult to recover. The country can simply not afford another four years of ‘Trump-o-nomics.’
Very good article. Trump will go down in history for being the worst President we ever had. The writing was on the wall before he was elected President with all his lawsuits and shady dealings but we have too many ignorant people in our country to realize what a risk there would be if he became President