This past Thursday, President Trump tweeted that he would consider rejoining the Trans-Pacific Partnership (TPP) - a trade deal he left negotiations for at the very beginning of his presidency - if it could be improved upon in favor of the United States. Unfortunately, many speculate that the most opportune time to negotiate a better deal has passed, and that Trump's hasty decision to pull out of the agreement will not work in his favor should the partnership be renegotiated.
The TPP would have allowed the U.S. special access to the economies of eleven other participating countries, mirroring the relationship the U.S. has with Mexico and Canada through the North American Free Trade Agreement (NAFTA). Tariffs between participating countries would have been extremely low, allowing for a leg up in foreign markets. It also would have been an opportunity for American companies to get their products into foreign markets, particularly in regions over which China, which was not part of the agreement, exerts considerable influence. That is not to say the TPP was a perfect deal; the agreement drew bipartisan criticism for prioritizing large corporations over small businesses, who could not hope to compete with the resources and low cost production of large-scale international corporations.
Trump's initial resistance to the TPP, amongst other trade deals, was a major aspect of his campaign. Trump criticized Obama ruthlessly for agreeing to a deal that, in his eyes, did not prioritize the needs of working class Americans. The TPP was Obama's signature trade agreement, and his attempt to "pivot to Asia" was a critical move in a rapidly globalizing economy where the influence and power of countries like China cannot be ignored.
It is really only because of China that Trump is considering rejoining the partnership at all. After implementing tariffs on $60 billion worth of Chinese goods and restricting Chinese investment in American technology firms, China retaliated with tariffs of its own on 128 American products. While China's economy is more dependent on exports than that of the U.S., experts are concerned that Trump is provoking a trade war that America might not win, considering China is the largest consumer of several American products. The U.S. would struggle to close the gap for products like sorghum, for example, on which China has imposed a 179% tariff.
Trump is already suffering the fallout from his Chinese tariffs, receiving particular pressure from representatives from states with agriculture-based economies concerned that any further escalation will trigger a crisis for farmers. Rejoining the TPP (which has since been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership - CPTPP, or TPP11), would potentially relieve Trump's concerned constituents by opening up new markets. It may also help Trump save face over his decision to provoke China.
However, it is highly unlikely that the members of the CPTPP will be open to renegotiating the deal, nor are they likely to offer a more favorable agreement than what Trump initially rejected. In the aftermath of America's withdrawal, the CPTPP actually suspended twenty-two provisions that were favored by the U.S., but opposed by other participating nations. It seems unlikely that members would agree to not only reinstate those provisions, but enhance them, as Trump seems to expect.
The possibility of the U.S. rejoining the CPTPP grew even more unlikely once White House economic advisor Larry Kudlow stated on Tuesday that rejoining the TPP was "more of a thought than a policy." Trump himself dialed back via Twitter. Trump's variability continues to sow confusion.
- https://twitter.com/realDonaldTrump/status/984631073865953280
- https://www.politico.com/magazine/story/2017/03/trump-tpp-free-trade-deal-obama-renegotiate-nafta-214874
- http://www.businessinsider.com/heres-why-trump-hates-the-trans-pacific-partnership-so-much-2016-11
- https://www.washingtonpost.com/news/worldviews/wp/2018/04/13/a-timeline-of-trumps-complicated-relationship-with-the-tpp/?noredirect=on&utm_term=.89183e4e5074
- https://www.politico.com/magazine/story/2017/03/trump-tpp-free-trade-deal-obama-renegotiate-nafta-214874
- https://www.washingtonpost.com/business/economy/trump-prepared-to-hit-china-with-60-billion-in-annual-tariffs/2018/03/19/fd5e5874-2bb7-11e8-b0b0-f706877db618_story.html?utm_term=.2ea75efa3213
- http://fortune.com/2018/04/02/china-tariffs-128-us-products/
- https://www.vox.com/2018/4/4/17196972/trump-china-trade-war-tariffs
- https://www.npr.org/sections/thetwo-way/2018/04/17/603103680/in-latest-trade-salvo-china-imposes-179-percent-tariff-on-u-s-sorghum
- https://www.bloomberg.com/news/articles/2018-04-17/chinese-sorghum-tariffs-will-hit-hard-in-trump-friendly-kansas
- https://www.nytimes.com/2018/04/01/opinion/trump-tariffs-agriculture-economy.html
- https://www.forbes.com/sites/alexcapri/2018/04/15/trumps-trade-war-irony-america-loses-by-not-rejoining-the-tpp/#6aa6143b3e7f
- http://thehill.com/policy/finance/383554-kudlow-downplays-us-rejoining-tpp-talks
- https://www.reuters.com/article/us-usa-trump-tpp/trump-says-on-twitter-he-does-not-like-tpp-for-u-s-too-many-contingencies-idUSKBN1HP0BZ
- https://twitter.com/realDonaldTrump/status/986436520444866560