Since Donald J. Trump’s inauguration a year ago, a war has raged within the White House between “nationalists and globalists.” Today in Davos, Switzerland, the president sought to lay this internecine struggle to bed, reassuring his fellow plutocrats that “America First does not mean America alone.” He insisted that the United States remains committed to free and open trade, provided that it is “FAIR and RECIPROCAL.” And it is willing to embrace international cooperation as long as it is premised on national sovereignty and permits each nation to chart its own destiny.
By turns boastful and uplifting, Trump’s speech touted an America that was “ROARING BACK.” Indulging his penchant for hyperbole, the president lauded the “extraordinary” and “historic” performance of the U.S. economy under his stewardship thanks to massive tax cuts, regulatory reform, and the repatriation of corporate profits. The United States, he crowed, was “open for business.”
More interesting than his marketing of the United States as a destination for foreign investment was his critique of the global economy and his explicit endorsement of bilateralism over multilateralism as a foundation for international trade. The United States seeks a global economy that delivers “broadly shared prosperity.” But it will no longer “turn a blind eye” to “predatory” behavior by trading partners that cynically violate international rules, whether by stealing intellectual property or by subsidizing domestic producers at the expense of U.S. businesses. These well-worn Trumpian themes came as no surprise to his global audience. (More puzzling was Trump’s critique of “state-led economic planning,” a common practice that is not, in itself inherently discriminatory.)
The president’s message—that reciprocity and non-discrimination are preconditions for a fair and open global trading system—was appropriate. So was his observation that “as president of the United States, I will always protect the interests of our country, our companies, and our workers.”
More worrisome, however, was Trump’s firm embrace of bilateralism as the foundation for U.S. trade policy. For the past seven decades, since the negotiation of the General Agreement on Tariffs and Trade, the United States has championed a multilateral trading system grounded in universal institutions. Since 1995, the centerpiece of this order has been the World Trade Organization (WTO). Over the past year, the president and senior officials in his administration have intimated that they are prepared to ignore the WTO in response to an adverse finding by its binding dispute resolution mechanism. Such a step would deal a devastating blow to the global trade regime, particularly on the heels of his administration’s disavowal of the Trans-Pacific Partnership.
Rejecting any suggestion that he is a protectionist, the president declared himself “prepared to negotiate mutually beneficial bilateral agreements with all countries.” Trump’s rationale for bilateralism is obvious: He is confident that the United States can exploit its enormous market leverage in one-on-one negotiations to secure a better deal for U.S. companies, workers, and consumers. As an approach to global trade liberalization, however, piecemeal bilateralism is a poor cousin to more comprehensive multilateral efforts, a regressive step that requires cumbersome negotiations with individual partners, foregoing the advantages of one-stop negotiations for market access with multiple trading partners. Beyond raising the risks of trade diversion and the fragmentation of the global trading system, bilateralism hinders the U.S. ability to shape the content of global trade rules and standards.
Equally noteworthy was the president’s emphasis on “sovereignty” as the precondition for international cooperation—a theme that also dominated his maiden speech to the United Nations General Assembly in September. As he had in New York, Trump emphasized to the World Economic Forum that the nation-state remains the fundamental unit of world order, with each government deriving its legitimacy from (and owing its obligations to) its citizens. “A nation's greatness is the sum of its citizens, the values, pride, love, devotion and character of the people who call that nation home.” The president emphasized that his own actions in the world would always be driven by the interests of American citizens, not least the “voices of the forgotten” who elevated him to the White House.
Trump’s most telling sentence came toward the end of his address. “From my first international G7 summit, to the G20, to the UN General Assembly, to APEC, to the World Trade Organization, and today at the World Economic Forum,” the president explained, “my administration has not only been present, but has driven home the message that we are all stronger when free and sovereign Nations cooperate toward shared goals—and shared dreams.” The president called on the assembled political and corporate leaders to “resolve to use our power, our resources, our voices, not just for ourselves but for our people.”
Admirable and heartwarming sentiments, to be sure. Left unsaid—and to be determined—was what goals and dreams the president has in mind, whether they are sufficiently shared globally to permit cooperation, and what role the United States is willing to play in helping forge collective action on their realization. Coming from a president who has renounced the Paris Climate Accord, disparaged the WTO, and abandoned the cause of universal human rights, a certain skepticism would seem to be in order.