Trump, Trade, and Great Power War

WHERE NATIONAL DEFENSE MEETS FISCAL RESPONSIBILITY

World leaders gather for the 2016 G-20 summit in China. Via Wikimedia Commons.

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by Matthew Fay
One of the signature features of President Donald Trump’s campaign was his hostility to free trade. Then-candidate Trump repeatedly denigrated various multilateral trade pacts as bad deals for the United States. Pulling out of the Trans-Pacific Partnership, appointing opponents of free trade—such as Steve Bannon and Peter Navarro—into key positions, and promises of tariffs that are likely to produce retaliatory measures, all demonstrated that Trump was planning on following through on his protectionist campaign rhetoric.
While Trump’s attack on free trade has important implications for American and global economies, it will also have an impact on the likelihood of war between the great powers.



As discussed here previously, President Trump sees the world in zero sum terms. Absent disproportionate economic gains for the United States, international agreements cannot be considered successful. However beneficial such arrangements prove to be for all involved, Trump’s mercantilist outlook sees them as a raw deal for Americans.
It is not surprising therefore, that U.S. Treasury Secretary Steve Mnuchin nixed attempts to include language supporting free trade in a statement from a G-20 meeting in Baden-Baden, Germany. As CNN reported, while the statement included some positive words on trade, “conspicuous by its absence was the phrase ‘we will resist all forms of protectionism” that was contained in the communiqué from the last meeting of the group in China, July 2016.” Mnuchin rejected the idea that the omission was meaningful, but the unwillingness to reaffirm American opposition to protectionism ignores that trade provides benefits beyond the global economy. Specifically, the expectation of future trade affects the likelihood of war and peace.
The connection between trade and conflict has never been as simple as early liberal theorists suggested. The idea, wrongly attributed to the nineteenth century French economist Frederic Bastiat, that “when goods don’t cross borders, soldiers will” still offers a good summation of the longstanding position that trade has pacifying effects on international politics. The logic behind the argument is compelling: the greater the extent of commercial relations between states, the less likely there will be conflict because the economic cost of war (and the lost benefits of trade) will be too high. However, history has shown that states still do occur despite high levels of economic interdependence at the time of the conflict.
In his book Economic Interdependence and War, political scientist Dale Copeland explained that it is not the current level of trade that is important to the likelihood of conflict. Rather, Copeland argues, it is the expectation of future trade that determines a state’s willingness to go to war. He writes,

In a very real way, it does not matter in the least whether past and current levels of trade and investment have been low, as long as leaders have strongly positive expectations of for the future. It is their future orientation and expectations of a future stream of benefits that will likely make the leaders incline to peace. Likewise, it does not matter whether past and current levels of commerce have been high if leaders believe they are going to be cut off tomorrow or in the near future. It is their pessimism about the future that will probably drive these leaders to consider hard-line measures and even war to safeguard the long-term security of the state.

Multilateral trade has been a feature of the liberal international order developed after World War II for a reason. Postwar policymakers feared a return to the closed economic blocs of the 1930s that helped drive the world to war. It is entirely possible that the norms in favor of free trade are robust enough to withstand the absence of routine language from a statement by a meeting of the world’s finance ministers. But groups like the G-20 help set expectations about the future. Given the connection between those expectations and conflict, failing to reaffirm America’s opposition to protectionism could put the world on a dangerous path.