Writing in the Wall Street Journal, the former president of the World Bank cautioned President Donald Trump could plunge the world into “economic mayhem” if he follows through on his demands for tariffs in the name of “national security.”
According to Robert Zoellick, who headed up the World Bank after stints as Deputy Secretary of State and U.S. Trade Representative under President George W. Bush, Trump is ignoring his top economic advisers and pushing for trade protectionism as a sign of strength.
“President Trump’s new National Security Strategy argues that the U.S. must compete in a hostile world,” wrote Zoellick, adding, “The Trump administration has stacked up a pile of trade cases that will come tumbling down early in 2018.”
“The U.S. is ready to block steel and aluminum imports through a rarely used ‘national security’ rationalization,” he continued. “As an alternative, Commerce Secretary Wilbur Ross had tried negotiating capacity cuts in Chinese production, but Mr. Trump waved him off with a demand for tariffs. Because most of China’s metal exports already face U.S. tariffs of more than 80%, Mr. Trump’s tactic will likely trigger retaliation from other countries.”
As Zoellick noted, Trump is also likely to “withdraw from the North American Free Trade Agreement, the U.S.-Korea Free Trade Agreement or both.”
“Mexico and Canada would probably agree on eliminating barriers and setting new rules for the digital age,” he wrote. “But Mr. Trump’s real aim is to dictate market outcomes. The administration wants to start with the goal of eliminating the U.S. trade deficit with Mexico and then manipulate rules to that end. It wants the U.S. to be excused from keeping its side of the NAFTA bargain.”
“No country wants to do a bilateral deal with Mr. Trump now because he demands managed trade, not fair competition. He wants excuses to raise barriers, not rules to boost trade,” Zoellick explained. “America once attracted the world’s talent, but Mr. Trump’s hostility is driving people away. If he pulls the U.S. out of Nafta, even financial markets might recognize that his economic isolationism poses a risk to growth.”
Zoellick then took a direct shot at Trump by referencing Trump’s campaign slogan: “Make America Great Again.”.
“True competitors honestly assess their weaknesses, adapt and then grow stronger. Those are the qualities that made America great,” he pointedly quipped. “This will be the year that trade policy could define Trump’s fearful America.”
You can read the whole piece here.