Trump threatens world trade - Financial Times

Like cats in popular folk wisdom, globalisation appears to have many lives. The integration of markets in goods, services and capital that accelerated in the 1990s with the fall of communism and the rise of China has been written off many times, notably during the global financial crisis. Yet it has survived.
This past year, its obituarists have had more material to work with than usual. The stalling of a number of high-profile trade deals has had the pre-emptive mourners out in force arguing that the engine of liberalisation has failed. Feeble growth in worldwide goods trade relative to the expansion of the global economy has raised fears that protectionism has taken its toll. And the election of Donald Trump, with his tirades against Chinese imports stealing jobs, and the appointment ofChina trade hawks like Peter Navarroto his administration, suggests that the era of liberalised trade is over.
Of these worries, only the last is convincing. Even allowing for the fact that rhetoric on the US presidential campaign trail tends to be far more blood-curdling than subsequent actions when in office, Mr Trump’s zero-sum worldview is deeply troubling.
A number of large trade pacts — usually dubbed “free-trade agreements” whether or not they succeed in liberalising commerce — have failed in recent years. But 2016 was notable for two particularly large ones hitting the buffers — the Transatlantic Trade and Investment Partnership (TTIP), involving the US and EU, and the Trans-Pacific Partnership (TPP) of 12 Asia-Pacific economies. Moreover, the trade world was treated to some comic relief late in the year when the smaller pact between the EU and Canada was held up for a while by obstreperous Walloons, the government of Belgium’s francophone region objecting to various provisions therein.
That said, none of this was wildly surprising. TTIP, predictably for a large multi-stranded deal between two trading blocs used to acting as hegemons, has struggled since its launch. The TPP was opposed by both presidential candidates, even though Hillary Clinton had been intimately involved in its negotiation. It was always going to face an uphill passage through Congress. Under the radar, however, the EU moved closer to a deal with Japan, two of the world’s largest trading powers quietly getting on with business.
As for the decline in the growth of trade relative to gross domestic product, it seems more likely to be related to changes in the structure of supply chains than to protectionism. Previously disaggregated production lines are being pulled inside single economies, notably China.
The underlying forces against globalisation are often overstated. But Mr Trump’s election could change everything. Armed with a view of the world where China’s gain is America’s loss, and the powers available to any US president to tear up trade treaties and impose emergency tariffs, Mr Trump could do serious damage within a relatively short space of time.
He has already appointed two instinctive protectionists itching for trade confrontation with China, Wilbur Ross and Mr Navarro, to his trade team. It may be up to Congress to restrain the administration’s wilder protectionist impulses — which is a little like putting the toddlers in charge of a nursery.
Globalisation has survived many things, but the rise of mercantilist populism in the form of Mr Trump may be its biggest challenge for decades. The year of 2016 was not a disastrous one for international commerce, but it may prove to be an uneasy calm before the trade wars begin.