The role of trade in Trump's principled realism

Blog Post
Trade is a key component to President Donald Trump’s national security strategy of “principled realism” — a doctrine invoked last week in the president’s speech to the UN General Assembly. 

Some, like the Washington Post’s Gabriel Glickman have criticized the policy as a “retreat” from the world stage, while others, like noted historian Victor Davis Hanson, see it as visionary in prescribing a new way for the U.S. to engage in a post World War II world that no longer needs or tolerates our prior paternalistic style of leadership.

The National Security Strategy of the United States was rolled out in December 2017, declaring “An America First” strategy “based on American principles, a clear-eyed assessment of U.S. interests, and a determination to tackle the challenges that we face.” It goes on to define the strategy of principled realism as “guided by outcomes, not ideology. It is based upon the view that peace, security, and prosperity depend on strong, sovereign nations that respect their citizens at home and cooperate to advance peace abroad. And it is grounded in the realization that American principles are a lasting good in the world.”

In coupling U.S. economic prosperity with foreign policy, the NSS states “economic challenges at home demand that we understand economic prosperity as a pillar of national security.” Essentially, the U.S. is now committed to pursue foreign policy and trade policy that promotes the U.S. middle class instead of hollowing out our manufacturing base. More on that later.

We are only two years into this administration and less than one year from the articulation of principled realism, but we are beginning to see how the policy could have a positive impact on U.S. business. Supporters point to Trump’s strong rhetoric and pressure imposed by tariffs as leading to a new US-Mexico-Canada trade treaty featuring apparent wins in fewer loss of U.S. jobs to cheaper Mexican labor and Canadian concessions on exports of dairy products. 

The true test of the policy, however, will likely come in trade negotiations with the European Union and, even more so, with China. It will be fascinating to see how a move away from an paternalistic approach to the world economic order impacts U.S. business interests.

In a speech about principled realism at Hillsdale College, Hanson said the U.S. is not advocating retreat but reengagement based on a new set of criteria. The U.S. is moving on from the post World War II paternalistic approach where the U.S. strived to rebuild Europe and Japan while creating new markets for U.S. goods. This was coupled with “policing” the acts of rogue nations. Hanson argues the culmination of this approach has been two significant negatives: Allies who resent us and a U.S. middle class/ manufacturing base that has been eroded by international competition we subsidized.

Critics of an America-first approach point to a recent poll by the Chicago Council on Global Affairs finding 70 percent of Americans want the U.S. to play an “active role” in the world. While it appears Americans may want the U.S. to work with others to solve problems rather than withdrawing from international agreements and focusing on national grievances, another new poll suggests allies who may have resented post WWII paternalism are not being swayed by principled realism. According to the Pew Research Center, 70 percent of people from 25 foreign countries have no confidence in Trump. Opponents of principled realism argue that the U.S. may need its traditional allies to come out ahead in its trade battle with China.

Both sides of the debate can agree any deal with Beijing will be difficult to strike with China now in a peer position. Trump and his opposition find common ground, as New York Times columnist Thomas Friedman writes, in the need for the U.S. to “confront China’s unfair trade practices. China has grown incredibly in the past 30 years with a very specific formula: hard work, unleashing capitalism, smart planning and long-range investments in education and infrastructure — but also by stealing intellectual property, forcing technology transfers and cheating on World Trade Organization rules.”

Friedman suggests the U.S. can “win” the trade standoff with China, “not by brute force alone, or by containment of China’s giant economy, but by ‘entanglement’ — entanglement of Chinese students with our schools, Chinese businesses with our values, and the Chinese government with our allies. That is, with the broad alliances and global institutions, and their rules of fair play, that we’ve been a part of since World War II.”

Which or if either approach will work remains to be seen. For now, the U.S. is committed to principled realism. The results of this new foreign policy over the next two years will go far in determining the 2020 elections.
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