Monday, July 2, 2018

What did Donald Trump do today?

He attacked an objectively pro-American trade organization.

At a joint press appearance with the Prime Minister of the Netherlands, Trump was asked whether he intended to withdraw the United States from the World Trade Organization (WTO). He responded:
WTO has treated the United States very badly, and I hope they change their ways. They have been treating us very badly for many, many years and that’s why we were at a big disadvantage with the WTO. And we’re not planning anything now, but if they don’t treat us properly, we will be doing something.
In simplest terms, the WTO is a mediator for resolving trade disputes between countries. Member nations, including the United States, can challenge one another's actions at the WTO in order to settle matters without resorting to a trade war. Almost every country on earth is a member, which makes Trump's demand to be "treated properly" essentially a threat against the rest of the world economy.

Trump has decided the WTO is a problem, although given his fundamental and continued misunderstanding of what global trade even is, it may not be possible to understand why. He even recently ordered the secret drafting of a bill that would all but abandon the United States' participation in the WTO--and hence in global trade. (The source who leaked the bill called it "insane.")

Trump's specific claim about WTO treating the U.S. "very badly" is completely false, though: the United States prevails far more often in cases brought before the WTO than the average member nation. Trump's confusion about the WTO parallels his misunderstanding of NATO, another multinational organization built after WWII by the United States--which he has also been attacking again recently.

Why is this a bad thing?

  • A policy based on facts that are completely wrong will never be a good policy.
  • It's generally not a good sign when a president's own staff is using the word "insane" to describe legislation he has made them draft.
  • It is hard to beat threatening the entire world economy with a trade war for stupidity.