Trade After Trump: Divergent views on what is ahead

On 3 March, the Global Governance Programme and the RESPECT project held a webinar on ‘Trade After Trump’. The event, featuring speakers Craig VanGrasstek (Adjunct Lecturer in Public Policy at the Harvard Kennedy School) and Jacques Pelkmans (Centre for European Policy Studies) examined the transition between the Trump and Biden administrations and how it will effect transatlantic trade relations. The two speakers had rather divergent views about the future ahead.

VanGrasstek opened up the discussion by stressing that there may be more trouble ahead than expected due to common misconceptions about trading. Donald Trump was not the only problem in the US’s trade policies; he claimed that “Trump’s protectionism was overdone, but the changes he brought about were more about the degree and the direction than a radical shift.”

VanGrasstek suggested that modern trading systems do not protect against discrimination, and that this is a direct result of declining US and European leadership, which may have reached the point of no return with the advent of Free Trade Agreements among major trade partners. According to him, “these are not solutions, they are part of the problem.” He also argued that the multilateral trading system is in serious danger of losing all relevance as a negotiation forum, and cited worrisome trends of shifts in global distribution of power and wealth that reduce US willingness and capacity to lead.

Graphs taken from Craig VanGrasstek's 'Trade after Trump' working paper

In contrast, Jacques Pelkmans, analysed the challenges for the Biden Administration from an EU perspective and offered an optimistic outlook of the situation. Disagreeing from VanGrasstek, he believes that Trump was alone: “There was no obvious return to nasty bilateralism, no overall rejection of the WTO, and no rough new tariff protectionism other than Trump and his policies... Trump was more ‘home alone’ than ‘America first’”. 

Pelkmans also pointed to the many areas where the EU has signalled it is keen to work with the US on trade, including Green Deal issues, WTO reform, and more. Trump and his policies have helped to transform Brussels. This is reflected in the recent EU trade policy review which makes clear that the EU will be more assertive in pursuing its interests and defending its values. Pelkmans acknowledged that VanGrasstek's research is a very useful wake-up call for Europeans and should not be dismissed lightly.

While it is still too early to determine which speaker’s predictions and analyses will come true, it is clear that transatlantic trade faces a number of challenges in the future, and that the transition from Trump to Biden will not be smooth sailing. In the words of VanGrasstek: “Trade has transformed from a commercial undertaking, into a campaign or political topic which is always discussed within the context of social policy. And the US has never been able to agree on that.”