President Trump’s Trade Isolationism Could Hurt America’s Diplomatic Influence

The Trump administration recently pressured the G20 to drop its long-standing commitment to free trade as part of its resolve to “protect America’s economic interests.” Treasury Secretary Steven Mnuchin rejected multiple phrases emphasizing the importance of resisting protectionism in drafts of the summit’s joint language statement, signaling a major change in trade priorities from the U.S. government. Just like the Trans-Pacific Trade (TPP) withdrawal, the Trump administration’s isolationist position could be detrimental to its diplomatic influence, affect employment, and hinder international efforts against poverty.

Through protectionism and a distorted foreign policy, the Trump administration is toying with the already strained diplomatic relations with long-time allies, especially Germany and the United Kingdom. And if it continues to disagree on crucial economic issues like the G20 Free Trade Agreement (FTA), it might lead to strained relations on other fronts, like the efforts against terrorism or the nuclear disarmament of Iran and North Korea. With the latest developments to both issues, a disparity with allies is the last thing the US needs.

Instead, Washington should look at ways to strengthen economic ties instituted under the previous regime, particularly at a time when China is heavily expanding its trade network in a bid to displace the US.

China has strongly showed that its sturdy economic position can hurt America’s diplomatic efforts including its support for the Assad regime in Syria. Likewise, America’s primary attraction to most of its allies is the economic benefits attached. Since emerging economies are strengthening their bilateral agreements with China, continued isolation could eventually benefit the Chinese at America’s detriment. Providing China the avenue to grow at the US’s detriment might solidify its ability to frustrate America’s subsequent diplomatic efforts. Moreover, we might see an acceleration in Sino-Russian coalition rising against America on all diplomatic fronts.

Contrary to Trump’s claims against Free Trade Agreements (FTAs), they supported an estimated 11 million jobs in 2013 alone and presently support around 6 million jobs, making up 25 per cent of all manufacturing jobs. But, if the president remains resolute on pulling out of existing FTAs, jobs would be lost in crucial industries like biotechnology, energy and health technology. Adding the potential job loss to the almost 8 million presently unemployed, we might see the 4.7 percent unemployment rate increase as high as 6 to 7 percent.

Similarly, this situation would be equally detrimental to global efforts on poverty and migration.

Through the years, FTAs have fostered employment in partner countries especially those with high poverty rates. Jobs created in industries like mining, manufacturing and agriculture have helped to reduce poverty through job creation to meet export needs. Ending the G20 FTA, NAFTA and TPP, might lead to unemployment in partner countries, especially poorer ones. This scenario can possibly increase poverty and eventually migration.

Besides the loss of jobs and increase in poverty, cutting FTAs can be detrimental to the GDP. FTAs have largely aided the GDP and represents around 30 percent of the GDP compared to the less than 10 percent in in the 1960s. Nowadays, more aspects of the economy ties to trade dealings especially in industries like tech and automobile. Moreso, FTA’s are largely responsible for the good performances in agriculture and manufacturing in recent years providing a cumulative trade surplus of over $280 billion since 2008 and creating more than $1.4 trillion profit in 2014 alone.

As the US Chamber of Commerce’s website says, “America cannot have a growing economy or lift the wages and incomes of our citizens unless we continue to reach beyond our borders and sell products, produce, and services to the 95 percent of the world’s population that lives outside the United States.”

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If the US is still committed to world peace and freedom, it must positively utilize its economic advantage to strengthen its diplomatic stance. America needs a strong economic circle to maintain its position in international diplomacy.

Evidently, the administration should look at other ways to protect America’s economic interests other than isolating itself from allies, thereby instigating diplomatic fallouts and economically detrimental scenarios. There is more to achieve in cooperation and economic freedom than in isolation and protectionism.

Ibrahim Anoba is a commentator on Foreign Policy and African Political Economy. He is a Young Voices Advocate and lives in Lagos, Nigeria.