Destructive Isolationism : Tallying the Cost of America’s Trade Policy and Suggestions for Repair and Reform

Starting with the Trump Administration and continuing under the Biden Administration America’s trade policy can be characterized as one of “destructive isolationism”. It has undermined the multilateral trade system whose creation it had led; pulled America out of the Trans-Pacific Partnership, a key agreement solidifying its trade relations with its Pacific Rim partners, and replaced it with an Indo-Pacific Economic Framework that is not only unfunded but unfounded in political or economic reality; distanced itself from Europe which now talks about “strategic autonomy” and is visibly disintegrating as a geopolitical entity as it faces a revisionist Russia on its eastern flank; renegotiated the North American Free Trade Agreement under acrimonious rhetoric, causing Canada to rename its minister for trade the “Minister for Trade Diversification” while alienating Mexico; and attacked China with a diplomatically toxic and economically self-harming commercial policy, driving China to reformulate its economic policy in an increasingly adversarial posture and to take active countermeasures to undermine the collective West. This note tallies the quantifiable damage to America at an annual real GDP reduction of 1.16% or $311 billion at 2023 levels of GDP. This trade policy needs to be fundamentally reset to one made with the interests of America and America’s western partners not in the cross-hairs but in constructive negotiation. I suggest how this can be done with four strokes of the pen: by the US rejoining the TPP, removing the block on staffing the WTO Appellate Body, rescinding the WTO-illegal industrial tariffs on China, and launching a negotiation towards a new NAFTA – a North Atlantic Free Trade Area