‘America First’ Policies Raise Questions about US Leadership

 President Trump’s ‘America First’ policies have played well with his political base, but not so well with global leaders as tensions are growing over the specter of spiraling trade war with consumers at home and abroad likely to pay the price.

President Trump’s ‘America First’ policies have played well with his political base, but not so well with global leaders as tensions are growing over the specter of spiraling trade war with consumers at home and abroad likely to pay the price.

One of the unintended successes of President Trump’s ‘America First’ policies has been to galvanize the European Union, Japan and China to preserve and bolster multilateral trade, regulatory and security arrangements Trump disdains.

“After months of denialangerbargaining and depression, Europe and other parts of the world have accepted that Mr. Trump and his mission of disruption are not going away,” reports The New York Times.

Accounts suggest foreign leaders are stunned by Trump’s continuing attacks on traditional allies, cozy relations with Russian President Vladimir Putin and seeming disavowal of America’s role as the leading advocate of a liberal world order.

EU leaders are especially astonished at being referred to as “foes.” In June, 29 EU ambassadors to the United States sent an open letter to Trump in defense of free trade and investment policies.

“Together, the US and EU have created the largest and wealthiest market in the world. The transatlantic economy accounts for half of the global gross domestic product by value, which directly supports more than 15 million high-quality jobs and $5.5 trillion in commercial sales. And nearly one-third of the world’s trade in goods occurs between the EU and United States alone,” the letter said. The ambassadors added that EU investment in the United States exceeds US investment in Europe.

EU leaders, despite qualms about Chinese trade practices that mirror Trump’s, have met with Chinese leaders without US involvement. According to the Times, the “summit meeting produced an unusual joint declaration and a common commitment to keep the global system strong.”

The EU then signed what has been described as the largest free-trade agreement in history with Japan, again with no US involvement.

Now, the EU is preparing “whopping tariffs” in response to proposed Trump tariffs on items such as German-made cars, noting that 45 out of 50 US states export more goods and services to Europe than China, totaling around $500 billion in 2016.

 GOP Senator Ben Sasse from Nebraska may have spoken for the wave of critics who think Trump’s tariffs are undermining US exports that have taken years to cultivate and who believe his proposed $12 billion package of one-time financial aid to farmers won’t come close to co vering the long-term damage done by the tariffs.

GOP Senator Ben Sasse from Nebraska may have spoken for the wave of critics who think Trump’s tariffs are undermining US exports that have taken years to cultivate and who believe his proposed $12 billion package of one-time financial aid to farmers won’t come close to co vering the long-term damage done by the tariffs.

On the regulatory front, the EU fined Google $5.1 billion for antitrust behavior, which drew a sharp rebuke from Trump. Google plans to appeal the EU ruling, but it may be forced to reckon with it in the marketplace in the meantime.

Interestingly, the basis for the fine echoed an unusually American-sounding rationale. “Google has used Android as a vehicle to cement the dominance of its search engine,” Margrethe Vestager, Europe’s antitrust chief, told the Times. “These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere.” 

European Commission President Jean-Claude Juncker travels to DC this week to discuss the deteriorating EU trading relationship with Trump officials.

Meanwhile, the impact of tariffs is beginning to be felt. The Associated Press carried a story last week about the stress felt by US soybean farmers, who are a target of retaliatory Chinese tariffs. One soybean farmer said he already has lost $250,000 in value for his current crop. Soybeans on the Chicago Board of trade have dropped $2 per bushel in value. Farmers interviewed say they still support Trump, but want to know what the end game is.

The Oregonian posted a story last week listing five Oregon exports at risk in a spiraling trade war with China. Noting Oregon exported $3.5 billion worth of goods to China in 2017, the article said the most vulnerable are:

  • Computer and electronic products ($2.1 billion)
  • Machinery ($435 million)
  • Chemicals ($363 million)
  • Transportation equipment ($262 million)
  • Agricultural products ($235 million)

Oregonian reporter Mike Rogoway provided a more comprehensive look at Oregon exports in a piece published in June. Among the interesting statistics Rogoway uncovered: 87,000 Fords produced in the United States were exported through the Port of Portland, 90 percent of which headed to China.

US business interests also remain frustrated at Trump efforts to negotiate changes in the North American Free Trade Agreement, which appear to have stalled and made more difficult by the election of a leftist president in Mexico.

Global tensions are growing over the budding trade war, as reflected by a statement coming out of the G20 meeting held in Argentina over the weekend. US Treasury Secretary Steven Mnuchin attended the meeting and agreed to sign the joint statement.

Mnuchin acknowledged what he called “micro impacts” caused by the Trump tariffs, but defended them as a pathway to freer trade that is fair to the United States. News reports said Mnuchin and Chinese finance officials conversed during the 2-day meeting, but only engaged in “chitchat,” not serious negotiations.

There are harsher judgments of Trump’s policies. WorldPost editor Nathan Gardels. wrote, “The ‘American First’ president who denigrates democratic allies as foes is no longer the leader of the free world….Trump appears to be not even the leader of the United States.”