Contrary to the conventional wisdom, Donald Trump's decision to withdraw from the TPP does not indicate that the United States is disengaging from Asia or adopting isolationist policies. The National Defense Strategy (NDS) of January 2018 identifies China as a “strategic competitor” and “central challenge to U.S. prosperity and security” while calling for a “free and open Indo-Pacific region.” The United States is not retreating from Asia either militarily or economically, and the project of neoliberal globalization remains the core, non-negotiable strategy of corporate America.
While the TPP was advertised as the centerpiece of Obama's “Pivot to Asia,” a strategy of containing China by compelling it to submit to rules written in Washington, the logic of the TPP was not primarily geopolitical or even about free trade and tariffs. Rather, the TPP would further institutionalize neoliberal policies, including highly authoritarian “dispute mechanisms” empowering corporations against states and facilitating the privatization of public assets. However, in the context of growing trade deficits and de-industrialization, support for the TPP was electoral suicide, recognized not only by Trump but also Hillary Clinton.
While the TPP also made a start at addressing corporate America's grievances with respect to China—most notably in the area of intellectual property—the pact did not address a number of key issues, including currency manipulation and investment subsidies. Moreover, because the TPP-11 countries were (and still are) simultaneously negotiating a Regional Comprehensive Economic Partnership (RECP) with China that excludes the United States, China had little incentive to join a U.S.-led TPP.
While undoubtedly important for individual member states, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that was signed by the remaining TPP-11 on March 8 has limited global significance. Even with the inclusion of Japan the bloc accounts for only 14% of global GDP. The United States already has free trade agreements with most of its members, including Canada and Mexico. The TPP-11 continue to advocate for the entry of both China and the United States, but despite Trump's hints at Davos in January there is little prospect of either country joining in the near future.
Trump does not oppose existing global trade treaties and institutions because of their neoliberal features or negative impact on American workers, but rather because they make too many concessions to rival states and firms and do not fully leverage the structural power of the United States. Amid the chaos of a deeply dysfunctional presidency it is possible to discern the broad outlines of an emergent, revisionist geoeconomic project that corresponds to the aforementioned NDS and expresses the long-range objectives of the U.S. ruling elite and will continue beyond the Trump administration.
The first pillar of this project is the December 2017 legislation that dramatically reduces corporate tax rates and transitions to a territorial tax system that will benefit U.S. corporations at the expense of their global rivals and potentially attract significant investments back to the USA. A second and far more contentious pillar is the dismantling or restructuring of existing trade agreements through “divide and rule” bilateral pacts designed to ensure greater access for U.S. corporations, protect their intellectual property, and reduce the U.S. trade deficit. Trump's recently announced tariffs on steel, and aluminum, ultimately directed against China, are designed to accomplish these broader aims.