TPP, TTIP, and Trade | Brunswick Group

TPP, TTIP, and Trade

President-elect Trump is likely to continue to oppose the Obama administration's trade agreements while in office.


For all intents and purposes, the Trans-Pacific Partnership (TTP), a cornerstone of the Obama administration’s pivot to Asia, all but died with the election of Donald Trump. President-elect Trump, who vehemently opposed TPP and similar trade deals during the campaign, will likely continue to oppose the trade agreement while in office. Whomever Trump selects as his choice to be U.S. Trade Representative will provide an early indication of how aggressively the administration will address free trade. President-elect Trump has stated both in speeches and in written policy statements that he will “appoint tough and smart trade negotiators to fight on behalf of American workers,” a comment that could carry a great deal of weight in the global business landscape. Given the absence of a regional agreement and Trump’s strong desire to overhaul how the U.S. trades with China, anticipate that Asian countries will gravitate toward the Chinese market and become more reliant on that country for leadership in and around the South China Sea.


Equally in peril is the fate of the Trans-Atlantic Trade and Investment Partnership (TTIP). Though less politically fraught than TPP, TTIP has still attracted opposition from both progressive Democrats and Trump-supporting Republicans. Brexit and Britain’s likely withdrawal from the European Union have further complicated TTIP negotiations in recent months. Fully a quarter of exports from the U.S. to the European Union go to Great Britain, so its withdrawal from the European market will almost certainly affect the final negotiated agreement. Further complicating matters is the recent fine that the European Union levied against Apple, and its ongoing fight with the Obama administration over corporate taxes—a fight that Trump will inherit when he takes the Oath of Office. This will be an early test for the president-elect on his desire and tolerance for negotiating with foreign leaders.

Protecting jobs and made-in-America manufacturing

In response to the electorate’s repudiation of the free trade status quo of the past six decades, watch for President-elect Trump to appeal to working class Americans by making good on his campaign promises to “direct the Secretary of Commerce to identify every violation of trade agreements a foreign country is currently using to harm our workers, and also direct all appropriate agencies to use every tool under American and international law to end these abuses.” We expect that this policy will disproportionately affect U.S. technology companies and others that manufacture products abroad and sell them on American soil—a move that will put Trump at odds with Silicon Valley, but help shore up his base.

On the campaign trail, President-elect Trump took a hard line against NAFTA, often calling it “the worst trade deal ever.” Looking forward, Trump has called for an immediate renegotiation of NAFTA to better benefit American workers and promised to reexamine all existing trade agreements.