President Trump keeps promise on TPP…it’s history

What happens next will be vital for the Trump administration

By ·

President Trump’s first executive action was to pull out of the Trans-Pacific Partnership today, generating a mixed reaction from trade and supply chain analysts.

Harry J. Kazianis, Director of Defense Studies at the Center for the National Interest, (a Washington DC think tank) told LM that with the U.S. leaving the trade pact – a massive deal that would have included close to 40% of world trade, or roughly $28 trillion – the agreement is now “ancient history.”

What happens next will be vital for the Trump administration, he adds,

“We must remember, TPP, at its core, was never about trade,” he says. “It provided very little economic benefits to the United States, as Washington already had many trade agreements with the various signatories of TPP.”

Kazianis maintains that TPP’s real goal was to demonstrate to our Asian trading partners that the U.S. was providing a “safety blanket” – insurance that Washington was in Asia to stay, as China continues its aggressive expansion policies in the region.

For Rosemary Coates, president of Blue Silk Consulting and author of Rules for Sourcing and Manufacturing in China. just the opposite reaction may take place.

“Outside influence and funding from USAID and other organizations is  important to continue this trade standardization work and stabilize this region,” she says. “But it is very likely with the US backing away from TPP and other trade deals in the Pacific under the new Trump administration, China will step in to fill the void, influence and accelerate the development across Asia.”

Chris Rogers, a Research Analyst for Panjiva, an online search engine with detailed information on global suppliers and manufacturers,  says Trump may still “strike a less immediately hawkish tone” than during or since the election campaign.

“With regards to NAFTA the notice-to-withdraw is being held back as a threat if negotiations are refused,” he observes.

“The commitment to have the Department of Commerce take a more rigorous line on trade violations remains, but it nonspecific.”

Brandon Stallard, CEO of TPS Logistics, a Troy, Mich.-based third party logistics management provider with global operations, agrees that NAFTA might be different story.

“We support our president, and it looks like he’s doing the right thing about getting out of the TPP. We were not about to enter a level playing field, and most of U.S. manufacturing was not going to gain much by participating.”

Stallard believes that NAFTA is “a different ball game,” however.

“Here in Michigan, our automotive suppliers recently got together and concluded that President Trump is a real businessman. He’s not going take any chances with hemispheric supply chains if they are really working.”

(Related Article) With TPP dead in the water what next?


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Streamlining Your Freight with an Integrated Transportation Network
Your customers’ needs are dynamic and constantly changing; your transportation network should be in perfect tune.
Download Today!
From the October 2018 Logistics Management Magazine
Volumes are strong and steady, service is improving, yet our panel of the nation’s foremost rail experts says that there’s still plenty of work to be done on the nation’s rails to help shippers fill what’s now a massive capacity need.
Lift Truck End-of-life Management: Have a plan
Inventory Management 101: Time to step up to the plate
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
See Your Supply Chain Like Never Before
How do the world’s top supply chains see further and act faster? Many of them are gaining an understanding of how their supply chain flows are tied to outcomes to stay ahead of problems, and gain whole new efficiencies. Join us to learn more.
Register Today!
EDITORS' PICKS
8th Annual Rail/Intermodal Roundtable: Work in progress
Volumes are strong and steady, service is improving, yet our panel of the nation’s foremost rail...
Transportation Best Practices and Trends: Frios’ cool solution for a hot seller
Gourmet ice pop maker adopts collaborative cold chain solution to keep profits from melting away due...

35th Annual Quest for Quality Awards: Scaling to new heights of service
Which carriers, third-party logistics providers and U.S. ports have reached the pinnacle of...
29th Annual State of Logistics Report: Carriers take the wheel
As if higher rates and capacity shortages weren’t enough to worry about, shippers must now deal...