Amongst a slew of executive orders signed in his first week of office, President Donald Trump withdrew the United States from the Trans Pacific Partnership, or TPP, on Monday.
Trump’s action does not create any sort of immediate impact since the TPP is not yet in effect and still at the mercy of Congress, where the trade agreement was highly contentious on both sides of the aisle.
While the fate of the trade agreement was uncertain to begin with, the withdrawal does come as bad news for US West Coast ports. The TPP would have substantially increased trade activity in and out of the West Coast, increasing cash flow and fueling growth for ports, all the while benefiting local regions overall.
President Trump’s swift action on the TPP also raises concerns as to how the administration will proceed on trade throughout his term. If Trump continues to play hardball with other countries, including our allies, it could very well lead to a trade war that would ultimately result in the increased cost of goods, penalizing consumers and damaging the US economy.
So what comes next? Other trade agreements, including the North American Free Trade Agreement, may be subject to renegotiation in the near future. Surely, we will see soon enough.
For further reading, please see:
Bay Area Council’s report on the benefits of trade agreements: http://www.bayareaeconomy.org/report/the-real-impact-of-trade-agreements/.
East Bay Times article Pacific Trade Deal Nixed: http://eastbaytimes.ca.newsmemory.com/publink.php?shareid=344794f20
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