A new report is out this morning from Axios that suggests Trump is considering pulling out of the WTO. But even some of his policy advisors that disagree don’t think he’s crazy enough to actually do it:
AXIOS – President Trump has repeatedly told top White House officials he wants to withdraw the United States from the World Trade Organization, a move that would throw global trade into wild disarray, people involved in the talks tell Axios.
What we’re hearing: “He’s [threatened to withdraw] 100 times. It would totally [screw] us as a country,” said a source who’s discussed the subject with Trump. The source added that Trump has frequently told advisers, “We always get fucked by them [the WTO]. I don’t know why we’re in it. The WTO is designed by the rest of the world to screw the United States.”
Flashback: During the campaign, Trump told NBC’s Chuck Todd on “Meet the Press,” in July 2016: “World Trade Organization is a disaster.”
Some aides have tried to explain to Trump that in their view, the U.S. does well at the WTO, given the U.S. has an army of trade lawyers and created the system:
- The “Economic Report of the President” for 2018, which bears Trump’s signature on Page 11, states: “[T]he United States has won 85.7 percent of the cases it has initiated before the WTO since 1995, compared with a global average of 84.4 percent. In contrast, China’s success rate is just 66.7 percent.”
The good news is that no policy has ever been put in place to move this idea along. But according to Axios, that could also be the bad news:
But Trump is unmoved by those arguments, according to sources with direct knowledge:
- Trump’s economic advisers do push back in the moment when he raises the idea of withdrawal.
- But they’ve never put in place a policy process to take the idea seriously, according to four sources with direct knowledge of his private comments.
- That dismissive attitude in the face of Trump’s insistence could ultimately prove to be a mistake — as history has shown with other policy ideas of which aides do not approve.
They point out that the consequences of pulling out would be so profound, that no one has taken this idea seriously at this point. And some in the trade industry who already think Trump is crazy on trade…well they don’t think he’s crazy enough to do that:
Why this matters: A U.S. withdrawal from the WTO would send global markets into a spiral and cast trillions of dollars of trade into doubt.
- It would also blow up an institution that for 70-plus years has been a pillar of global economic and political stability.
- The consequences of a U.S. withdrawal are so profound that, like Trump’s senior advisers, the trade community hasn’t seriously entertained the possibility that Trump would try to withdraw.
- A top trade lawyer in Washington said: “We think he’s nuts, but not that nuts.”
So the bottom line is no one has taken Trump seriously on this and there is no policy put in place to make this happen. Also, as Axios points out, Trump couldn’t just do this unilaterally. He would need the approval of Congress to get out of the WTO.
But don’t rule it out just yet. Congress has already shown that they don’t want to fight with Trump, especially before an election. So if Trump suddenly decides to get all stompy foot on the idea, who knows what Congress will do…