Abandoning Free Trade: Another one of Trump’s early orders announced his intention to withdraw from the Trans-Pacific Partnership and renegotiate the North American Free Trade Agreement, keeping promises he made while bashing free trade on the campaign trail. The TPP agreement would have been a huge deal, transforming the U.S. relationship with Asia, but Congress never ratified it, and everyone has known for months that it wasn’t going to, so withdrawing now doesn’t really change anything. Renegotiating NAFTA could be a big deal, too, but no one really knows what Trump means by that. So this order was mostly Trump telling the world—and especially his anti-globalism supporters—that the United States is rethinking its approach to international commerce. It didn’t impose tariffs or export subsidies or any other changes to America’s foreign trade posture.
In fact, Spicer’s suggestion Thursday that Trump wants to pay for his border wall with a 20 percent tax on all Mexican imports—in defiance of NAFTA—was a more tangible harbinger of Trump-era protectionism. It’s not clear how Trump would impose that tax, which would boost consumer prices for avocados, tequila, automotive parts and other Mexican products, and invite retaliation against U.S. exports. And Spicer already appears to be walking it back. But the mere threat suggested that a new day in trade has already dawned.
Immediate Impact: 2. Potential Importance: 6.
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