Trade as the focus of foreign policy

“They come over here, they sell their cars, their VCRs, they knock the hell out of our companies.” -Trump on Japan, 1988

In case his intentions haven’t already been obvious for a long time, the new American president is beginning to offer unmistakable proof that he is deadly serious about completely overhauling US trade policy; it was never just a campaign talking point. Ditto for foreign policy. In fact, the two issues are inextricably linked, as Trump aims to replace national security with trade as the core American foreign policy issue. The implications are nothing short of mind-boggling.

From Brave New War author John Robb comes an important article explaining this sea change in American strategy. The Washington Post has a good report on Robb’s analysis:

By cozying up to Russia, and in his disdain for NATO, President Trump appears to have flipped decades of U.S. foreign policy thinking on its head. It has left many experts puzzled, and plenty outraged.

But for anyone trying to figure out Trump’s worldview, here’s a really interesting way of looking at things, courtesy of John Robb, who runs the Global Guerrillas blog and is an author and military analyst.

In a nutshell, Robb argues that trade — rather than national security — dominates Trump’s foreign policy thinking, inverting decades of U.S. practice. By implication, that makes any country running a large trade surplus with the United States a direct competitor.

If Robb is right, that’s very bad news for China, but it doesn’t make welcome reading for countries such as Mexico, Germany and Japan. Unless they can take steps to reduce their trade imbalances with the United States, they are unlikely to be fully trusted by a man who sees trade as a zero-sum game, and sees anyone “beating” the United States as a threat.

And a quote from Robb:

National security under this regime will be used to reinforce and grow positive trade relationships. For example, military tension with China creates the opportunity for sanctions that simulate the function of tariffs (allowing the U.S. to circumvent trade organizations and domestic resistance to tariffs). In a national security policy slaved to trade, any and all security guarantees extended to other nations will require a positive trade arrangement with the U.S. The U.S. simply won’t protect or extent security guarantees to any nation that has a non-beneficial economic relationship with the U.S. (i.e. runs a trade deficit).

Whatever the pros and cons of this approach, it’s increasingly clear that the global political and economic order is in for some… significant adjustments. If you want some guideposts to understand the changes we are about to see, this chart should help:

Ranking of countries by 2015 trade balance with the US

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