The demise of what could have been the world’s most significant trade agreement is proving costly for the United States.
The Trans-Pacific Partnership (TPP), bigger than NAFTA and EU combined, would have covered nearly half of the global economy. Yet, driven by misguided economic rationale and the need for a political gesture, President Trump swiftly denounced the TPP as a “rape of our country,” withdrawing the United States from the pact mere days into his presidency, a decision whose repercussions are only now fully manifesting.
Trump’s extraction of America from the TPP was a cornerstone of his protectionist “America First” agenda, predicated on the belief that the U.S. had excessively “given away” jobs, wealth, and income—a situation he predicted would only deteriorate under this trade agreement. This stance found support in a controversial study from Tufts University, which forecasted a loss of half a million American jobs within a decade due to the TPP. However, this analysis, and by extension, the economic advisement received by Trump, was critically flawed. It overlooked the beneficial supply-side impacts of trade liberalization and underestimated the adaptability of labor and capital markets to the transformative forces of new industries. In contrast, a more comprehensive evaluation by the USITC, mandated by Congress, suggested that abstaining from the TPP would cost the U.S. an opportunity for 128,000 additional full-time jobs and a 0.15% GDP growth by 2032.
Beyond the domestic front, the TPP promised to dismantle approximately 11,000 tariffs on American exports, potentially boosting U.S. exports by 9.1% or $357 billion annually, according to the PIIE. Contrary to Trump’s assertions, the TPP included provisions, notably in Chapter 17, to curtail the ability of foreign state-owned enterprises to flood the U.S. market with subsidized, low-cost goods. The aftermath of the U.S. withdrawal saw the remaining 11 nations form the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP), leading to a diminished U.S. trade surplus in Asia, particularly in agriculture, further exacerbated by a burgeoning trade conflict with China.
The geopolitical stakes of the TPP were equally significant, aimed at checking Beijing’s rising economic influence and coercive strategies in the Indo-Pacific. The U.S. exit from the TPP ceded strategic ground to China, enabling it to promote its own trade frameworks, such as the Regional Comprehensive Economic Partnership (RCEP), and to expand its Belt and Road Initiative (BRI), further diminishing U.S. economic and political leverage in the region. The U.S. withdrawal not only eroded its credibility among Pacific nations, who had ceded significant policy reforms in promise of access to the American market, but also marked a stark departure from the GOP’s traditionally pro-trade stance.
The hasty decision to abandon what could have been the largest free trade agreement in history is now haunting the U.S., both economically and geopolitically. Despite a belated recognition of this misstep, as evidenced by the Trump administration’s flirtation with re-engagement through the Asia Reassurance Initiative Act (ARIA) and hints at a possible return to the TPP fold, the damage may be irreparable.
This “current affairs op-ed” was written to fulfill part of the college application requirements for Georgetown University’s School of Foreign Service and the University of Richmond, which the author has been successfully admitted.