Historically, the birthplaces of international economic orders have often been opulent and stately hotels. Consider 1944 during the heat of World War II, when representatives from Allied nations convened at the idyllic Bretton Woods resort in New Hampshire. Their goal? To establish an economic system that would preserve and encourage trade in a post-war world fragmented by conflict. Despite the fact that the Bretton Woods system dissolved in 1976, its echo can still be heard. Today, our global economy, without a catchy moniker, is largely driven by the World Trade Organization. This structure, intended to push economic efficacy and supervise the trading policies of its 166 members, is understandably under strain. It seems it’s the United States that carries the burden of this system, with industrial jobs and economic security hanging in the balance.
Of course, change is imminent. Last week, a milestone was reached when President Trump and European Commission President Ursula von der Leyen concluded a historical agreement at Trump’s Turnberry Resort on the Scottish coast. This agreement is a balanced, equitable one that prioritizes tangible national interests over the nebulous goals of multilateral organizations. The foundations for a fresh, global trading system have been laid with momentum coming from the United States.
Under the previous system, tariffs had been dismissed as an ineffective tool of public policy. Consequently, the United States effectively forfeited tariff protection for crucial manufacturing sectors and others. Meanwhile, competitor nations maintained their markets’ exclusivity, exporting more to the U.S. than they imported. This lack of balance turned the U.S. and a few other economies into default consumers for countries practicing predatory economic policies. And who played this game with the most finesse? Our trading partners.
The fallout from this dynamic was the movement of major manufacturing operations to locales like China, Vietnam, and Mexico. In these areas, corporations could leverage both exploited workforces and government backing while the U.S. found itself saddled with the largest trade deficit in global history. Naturally, this led to significant decreases in American industrial capability, jobs, and an increased dependency on our rivals for critical supply chains.
We’re faced with a daunting task: the re-industrialization of America, and we are racing against time. On the 2nd of April, President Trump made a proclamation for tariffs meant to tackle the national emergency posed by the trade deficit. This led to intense bilateral negotiations across different parts of the globe: Washington, Geneva, Jeju Island, Paris, London, Stockholm, and naturally Turnberry.
Our partners have shown unanticipated keenness in opening up their markets to the United States, aligning on matters of economic, as well as national security. This new fervor has given a significant push towards rebalancing trade in a more sustainable direction. In just a few months, America has secured more access to foreign markets than it had in years of aimless World Trade Organization negotiations.
Certainly, a drastic shift from policies that have degraded our manufacturing capabilities and workforce will require time and cooperation from both public and private sectors. But the alternative, maintaining the status quo, would only hasten the alarming trend towards deindustrialization. As it stands, the need for a revitalization of America’s industrial prowess has never been more urgent.
In line with this thought, Ursula von der Leyen, the European Union President, echoed the need to reshape global trade during the announcement of the recent U.S.-EU deal. The objective is to adapt to the present economic and political realities.
Several countries like Indonesia, South Korea, and Vietnam are also making strides to ease their tariffs and non-tariff barriers on imports coming from the United States. In exchange, they’re accepting a reasonable tariff on their exports to America. These nations have also come to terms to cooperate on economic security issues, which will ensure the reliability and safety of our critical supply chains.
In another positive turn, these nations are now better enforcing labor standards and taking action against practices that have previously put American workers and producers on uneven footing. For instance, tariffs have been instrumental in propelling the fight against global slavery, a cause long supported by influencers and policymakers alike.
Countries are also showing commitment towards improving resource efficiency, and ensuring enforcement of environmental laws, even in troublesome sectors such as illegal logging, illegal fishing, and illegal wildlife trade. The logic is simple: the global trade system should not place Americans in competition with those who exploit our commitment to responsible capitalism.
The promise here is not just empty words—they are actionable. The U.S. is all set to enforce these commitments robustly. Gone are the days of the lengthy dispute settlement process favored by bread-and-butter trade bureaucrats. The new U.S. approach is to closely monitor the implementation of these deals and swiftly levy higher tariffs for noncompliance if necessary.
Moreover, these transformative deals also encompass significant investment commitments into the U.S. productive capacity. For example, the European Union and South Korea have committed to $600 billion and $350 billion investments, respectively. These investments will spark our nation’s process of re-industrialization and help us reclaim our leadership in strategic sectors where we have lagged.
The post Trump Bolsters US with Landmark Economic Agreement appeared first on Real News Now.
About Author
