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There is little question that President Trump wants to entirely transform the face of world trade. He said so repeatedly during the 2016 presidential campaign and made the first down payment on his promise recently with tariffs on imported steel and aluminum.
The question is where Trump goes from here. The leaders of the 159-member World Trade Organization (WTO), for one, have little doubt about the answer. They are apparently convinced that those tariffs are merely the tip of the proverbial iceberg. They believe this President is intent on dismantling the WTO, and are evidently in full panic mode about it.
European trade officials argue that their American counterparts are sick of WTO judgments they think are too lenient toward China, and are now ready to take a sledgehammer to the whole system.
America is well advanced in its plans to throttle the WTO’s appellate court, where countries resolve disputes over everything from subsidies to anti-dumping tariffs. Washington’s strategy is to block the appointment of judges, which should bring the system to a halt next year.
The Europeans understandably believe Trump will try to muscle the U.S. into a position of world trade dominance. And they are right. He will. And he will do so by renegotiating or withdrawing from any and all so-called free trade deals that do not offer at least a level playing field and subject the U.S. to the adjudication of disputes by foreign judges with no interest in the welfare of our country. He will not countenance one-sided and/or unequal trade restrictions, and he will no longer allow the U.S. to kowtow to less powerful or second-tier nations.
The Art of the Deal
Inherent in this discussion is a fundamental paradigm shift in this Trump era from multilateral to bilateral trade deals. The author of Art of the Deal is convinced – and rightfully so – that regional deals, which must be acceptable to multiple nations, involve an unacceptable level of compromise, unlike the bilateral ones, which can be cut with individual trading partners. This is especially true with the economy in a good place, providing maximum leverage for a President who is actually willing to use it, as Leesa K. Donner observed recently on LibertyNation.com.
Indeed, steel and aluminum tariffs provide added bargaining chips – and thus increased leverage – in negotiations. He has, for example, already waived the tariffs for Canada and Mexico, and could offer the same to other nations who bargain one-on-one with the U.S. in good faith.
Upending the trade organization’s most powerful tool for settling trade disputes, the appellate court, by blocking the appointment of judges seems a sure-fire way to either bring the WTO to its knees – or at least force it to make major concessions favorable to the U.S. If the current Trump strategy continues unabated, the WTO court will be unable to fill the three slots required for its continued operation by 2019.
One by one, the 45th President is unmasking and dismantling the many elements of U.S. policy and practice that have fallen into disrepute for so many years and led to a level of distrust and dysfunction in government so great that the voters were willing to send in this wrecking ball of a president.
From the unchecked flow of illegal immigrants and out-of-control national debt to the growing contempt for ordinary Americans in the DC swamp, Trump is the guy who barges in, turns the lights on in the darkroom, and forces the cockroaches to come out of hiding. His bold action on trade is just the latest example.