U.S. President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies as China’s influence in the region rises.
Fulfilling a campaign pledge to end American involvement in the 2015 pact, Trump signed an executive order in the Oval Office pulling the United States from the 12-nation TPP.
“Great thing for the American worker,” Trump said as he signed the order on his third full day in office. The Republican says the trade deal would have damaged U.S. manufacturing.
The accord, backed heavily by U.S. business, was negotiated by former President Barack Obama’s administration but never approved by Congress. It had been the main economic pillar of the Obama administration’s “pivot” to the Asia-Pacific region to counter China.
Trump has sparked worries in Japan and elsewhere in the Asia-Pacific with his opposition to the TPP and his campaign demands for U.S. allies to pay more for their security.
Harry Kazianis, Director of Defense Studies at the Center for the National Interest think tank in Washington, said Trump must now find an alternative way to reassure allies in Asia.
“This could include multiple bilateral trade agreements. Japan, Taiwan and Vietnam should be approached first as they are key to any new Asia strategy that President Trump will enact,” he said.
U.S. BUSINESS LEADERS
The new president also met with a dozen American manufacturers at the White House on Monday, pledging to slash regulations and cut corporate taxes, but warning them he would take action on trade deals he felt were unfair.
Trump, who took office on Friday, has promised to bring manufacturing plants back to the United States – an issue he said helped him win the Nov. 8 election. He has not hesitated to call out by name companies that he thinks should bring outsourced production back home.
He said those businesses that choose to move factories outside the country would pay a price. “We are going to be imposing a very major border tax on the product when it comes in,” Trump said.
Trump asked the group of chief executives from companies including Ford, Dell Technologies, Tesla and others to make recommendations in 30 days to stimulate manufacturing, Dow Chemical CEO Andrew Liveris told reporters.
Liveris said the CEOs discussed the border tax “quite a bit” with Trump, explaining “the sorts of industry that might be helped or hurt by that.”
“Look: I would take the president at his word here. He’s not going to do anything to harm competitiveness. He’s going to actually make us all more competitive,” Liveris said.
At a portion of the meeting observed by reporters, Trump provided no details on how the border tax would work. The U.S. dollar fell to a seven-week low against a basket of key world currencies on Monday and global stock markets declined amid investor concerns about Trump’s protectionist rhetoric.
“A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States – that’s not going to happen,” he said.