A President Trump could destroy the world economy
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- A President Trump could destroy the world economy
If elected, he could keep dangerous promises that would hurt the workers he claims to champion.
@SopanDeb: Wa Po editorial: “A President Trump could destroy the world economy”
THE DECADES since the end of the Cold War have seen strong and widely shared economic growth, on a global scale. The portion of the world’s population living on $1.25 per day or less fell from 44 percent to 23 percent. Some 200 million Chinese, 90 million Indians and 30 million people each in Indonesia, Egypt and Brazil moved into the global middle class. This progress had many causes, but a major one was the United States’ hard work, under presidents of both major parties, to promote the free flow of goods and capital, within a robust legal framework, among nations.
These policies benefited the American people, too — though by no means all of them, a fact that has caused understandable concern, especially in the wake of the 2008 financial crisis. Seizing on this backlash, and dissenting radically from the long-standing bipartisan consensus, Republican presidential nominee Donald Trump speaks of “bringing back” American jobs by repudiating international trade agreements and resorting instead to pressure tactics, such as threatening tariffs against China and other trading partners.
The United States needs to ensure that more of its own middle class shares in the benefits of globalization. Mr. Trump’s policies, however, could trigger a trade war, or wars, thus threatening the achievements of the past three decades without helping Americans who need it most.
And he would have considerable uncheckable power, as president, to keep his dangerous promises. Could he “immediately renegotiate” the North American Free Trade Agreement, and pull out of it if Canada and Mexico don’t go along? Yes: NAFTA’s Article 2205 says any party may withdraw after giving six months’ notice, and nothing in U.S. law requires the president to get congressional approval to do so. A similar argument applies to Mr. Trump’s threat to pull out of the World Trade Organization, a multilateral consortium the United States and its allies painstakingly constructed to support economic freedom and the rule of law in the postwar world.
A 45 percent tariff on China (or any country) imposed as punishment for “manipulating” its currency to the United States’ detriment? That, too, could well be legal, at least temporarily, under any of several statutes whereby Congress has broadly delegated the president power to raise tariffs to meet a national emergency or protect national security. As lawyer-economist Gary Hufbauer of the Peterson Institute for International Economics has argued, Congress could not stop Mr. Trump without an unlikely veto-proof two-thirds majority; court challenges would take months even in the unlikely event they succeeded. To be sure, Mr. Trump’s team has recently cast his threats as negotiating positions — examples of how he, unlike previous presidents, would play hardball in defense of U.S. workers and businesses. This is hardly reassuring: He seems to have no response prepared for trading partners’ inevitable pushback.
U.S. leadership of the global trading system has helped stabilize an area of international life that had bred conflict, even war, for centuries. To abdicate in favor of Mr. Trump’s zero-sum mind-set not only would undo the work of generations and lower the United States’ standing among the nations; it also would license other nations to conduct themselves just as selfishly. The disruption to market confidence could breed economic damage in excess of any transitory benefits. His approach would be a historic error, which, as president, he would be free to commit.