What Trump Gets Wrong About the WTO

To Make America Great Again, Start at Home

A supporter of President Donald Trump at a rally in Bensalem, Pennsylvania, March 2017. Mark Makela / Reuters

During his presidential campaign, Donald Trump had a consistent message for American workers: You have been betrayed by elites mesmerized by globalization and multilateralism. The North American Free Trade Agreement (NAFTA), the Trans-Pacific Partnership (TPP), and the World Trade Organization (WTO) are the problems, he said, not the solutions to stagnant wages and unemployment. Trump promised to bring back jobs by adopting an “America First” economic nationalism. That fiery message helped get him elected. But now Trump faces a problem: His solutions won’t work, and his supporters will soon realize that they’ve been had.

Few would reject Trump’s goals. He wants to ensure that American firms remain competitive and that the country’s trade partners do not discriminate against U.S. producers. But no matter how fervently he and his supporters believe it, Trump’s trade policies won’t help reestablish America’s once-commanding positions in such industries as steel, textiles, coal, or automotives. For starters, protectionist moves, such as slapping a 45 percent tariff on Chinese goods or penalizing China, Japan, and Germany for supposedly manipulating their currencies, will invite countermeasures. And that certainly won’t help American exports or create jobs.  

Likewise, levying a border tax on the components that American firms import from their overseas subsidiaries will increase prices for consumers, effectively imposing a tax on consumers. That will not hurt the rich, who can better absorb the added costs, but rather the working-class people whose cause Trump claims to champion. 

U.S. President-elect Donald Trump and Vice-President elect Mike Pence walk off Trump's plane upon their arrival in Indianapolis, Indiana, U.S., December 1, 2016.
Donald Trump, then U.S. president-elect, in Indianapolis, Indiana, December 2016. Mike Segar / Reuters
Then there’s Trump’s far-reaching attack on multilateral trade agreements. He insists that they are stacked against American firms, favor big exporters such as China, and encourage the flight of jobs to other countries. This diagnosis lacks nuance—unsurprising from a president who once crassly likened the Trans-Pacific Partnership (TPP) to “a continuing rape of our country.” Worse, it flies in the face of the facts. 

For one, the United States largely wrote the international trade laws, beginning with the General Agreement on Tariffs

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