Most politicians, whether they practise what they preach or not, use “protectionism” as an insult. Not so Donald Trump. When the US president said in his inaugural address that “protection will lead to great prosperity and strength”, he was proposing the most dramatic changes in trade policy in years. With Monday’s announcement that he wanted to renegotiate the North American Free Trade Agreement and pull out of the almost-completed Trans-Pacific Partnership, Mr Trump signalled a clean break with recent bipartisan US trade policy.
What becomes of these particular manifestations of Mr Trump’s mercantilist obsession remains to be seen. But retreating to a zero-sum vision of the world economy, seeing trade deficits as prima facie evidence of cheating by a trading partner, and resorting to protectionism is profoundly retrograde.
It is not yet clear what Mr Trump can even achieve with his renegotiations. True, there are some substantive changes the US can make to Nafta which, while damaging, will not make the deal collapse entirely. He could change the pact’s “rules of origin” to make it harder for Canada and Mexico to use inputs made elsewhere — particularly China — to produce goods they then sell into the US. Washington could also reform or abolish the procurement rules that constrain the “Buy American” policy of favouring domestic companies in public contracts.