Trump keeps the promise and withdraws US from TPP deal

8 years ago - Published in Finance, Fundamental Analysis

President Donald Trump moved Monday to pull the United States out of the Trans-Pacific Partnership; the 12-nation trade deal was a linchpin of former President Barack Obama's Asia policy.

Among a series of executive orders, the first was a memo on withdrawing from the vast TPP trade pact, which aimed to set trade rules for the 21st century and bind US allies against growing Chinese economic clout.

"We're going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country," the Republican president said as he met with union leaders in the White House's Roosevelt Room.

The order was largely symbolic, the deal never got a formal approval from the Congress, but served to signal that Trump’s tough talk on trade during the campaign will carry over to his new administration. The TPP accord, negotiated by Obama, was supported by business entities. It served as the primary economic pillar of Obama administration’s shift towards Asia-Pacific region to counter China.

During his presidential campaign, he criticised the accord as a "potential disaster for our country", arguing it harmed US manufacturing.
Promoted by Washington and signed by 12 countries in 2015, the TPP had yet to go into effect and US withdrawal is likely to sound its death knell.

Its signatories — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Brunei — together represent 40 percent of the world economy.

"We're going to be cutting regulation massively," Trump said during a brief portion of the meeting that was open to the press. "Now, we're going to have regulation, and it'll be just as strong and just as good and just as protective of the people as the regulation we have right now."

In exchange, Trump said companies must stay in the country and continue employing Americans. He again threatened to impose a "substantial border tax" on companies that move production out of the country.