U.S. President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies as China’s influence in the region rises.
Fulfilling a campaign pledge to end American involvement in the 2015 pact, Trump signed an executive order in the Oval Office pulling the United States from the 12-nation TPP.
“Great thing for the American worker,” Trump said as he signed the order on his third full day in office. The Republican says the trade deal would have damaged U.S. manufacturing.
The accord, backed heavily by U.S. business, was negotiated by former President Barack Obama’s administration but never approved by Congress. It had been the main economic pillar of the Obama administration’s “pivot” to the Asia-Pacific region to counter China.
Trump has sparked worries in Japan and elsewhere in the Asia-Pacific with his opposition to the TPP and his campaign demands for U.S. allies to pay more for their security.
Harry Kazianis, director of defense studies at the Center for the National Interest think tank in Washington, said Trump must now find an alternative way to reassure allies in Asia.
“This could include multiple bilateral trade agreements. Japan, Taiwan and Vietnam should be approached first as they are key to any new Asia strategy that President Trump will enact,” he said.
The new president also met with a dozen American manufacturers at the White House on Monday, pledging to slash regulations and cut corporate taxes, but warning them he would take action on trade deals he felt were unfair.
Trump, who took office on Friday, has promised to bring manufacturing plants back to the United States — an issue he said helped him win the Nov. 8 election. He has not hesitated to call out by name companies that he thinks should bring outsourced production back home.
He said those businesses that choose to move factories outside the country would pay a price. “We are going to be imposing a very major border tax on the product when it comes in,” Trump said.
Trump asked the group of chief executives from companies including Ford, Dell Technologies, Tesla and others to make recommendations in 30 days to stimulate manufacturing, Dow Chemical CEO Andrew Liveris told reporters.
Liveris said the CEOs discussed the border tax “quite a bit” with Trump, explaining “the sorts of industry that might be helped or hurt by that.”
“Look: I would take the president at his word here. He’s not going to do anything to harm competitiveness. He’s going to actually make us all more competitive,” Liveris said.
At a portion of the meeting observed by reporters, Trump provided no details on how the border tax would work. The dollar fell to a seven-week low against a basket of key world currencies on Monday and global stock markets declined amid investor concerns about Trump’s protectionist rhetoric.
“A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States — that’s not going to happen,” he said.
The president told the CEOs he would like to cut corporate taxes to the 15 percent to 20 percent range, down from current statutory levels of 35 percent — a pledge that will require cooperation from the Republican-led U.S. Congress.
But he said business leaders have told him that reducing regulations is even more important.
“We think we can cut regulations by 75 percent. Maybe more,” Trump told business leaders.
“When you want to expand your plant, or when Mark wants to come in and build a big massive plant, or when Dell wants to come in and do something monstrous and special — you’re going to have your approvals really fast,” Trump said, referring to Mark Fields, CEO of Ford, who sat around the boardroom-style table in the Roosevelt Room.
Fields said he was encouraged by the tone of the meeting.
“I know I come out with a lot of confidence that the president is very, very serious on making sure that the United States economy is going to be strong and have policies — tax, regulatory or trade — to drive that,” he said.
Trump told the executives that companies were welcome to negotiate with governors to move production between states, but
he was scheduled to hold a meeting later on Monday with labor leaders and U.S. workers, the White House said.
Between winning the presidential election in November and taking office, Trump hosted a number of U.S. CEOs in meetings in New York, including business leaders from defense, technology and other sectors. He also met with leaders of several labor unions, including the AFL-CIO.
By pulling out of the TPP, Trump made good on a pledge to scrap a deal he denounced as a “job killer” and a “rape” of U.S. interests.
Embarking on his first full week in office, the 45th U.S. president began rolling out his policy agenda after a tumultuous first weekend for his administration by signing a series of executive orders.
Among 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 U.S. allies against growing Chinese economic clout.
“We’ve been talking about this for a long time,” Trump said as he signed the executive order in the Oval Office.
“Great thing for the American worker what we just did.”
Promoted by Washington and signed by 12 countries in 2015, the TPP had yet to go into effect and U.S. 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.
The real estate mogul’s White House bid was fueled in part by a pledge to overturn trade deals — such as TPP and the North American Free Trade Agreement — that he says have drained U.S. jobs and destroyed its industrial heartlands.
Trump also signed two other orders, on freezing the hiring of federal workers and hitting foreign NGOs that help with abortion.
The Republican leader is looking to shift attention firmly back onto his policy agenda after a first few days that put his incoming administration on the back foot.
“Busy week planned with a heavy focus on jobs and national security,” he tweeted early Monday.
Since he was sworn in on Friday, Trump’s White House has been pilloried for lying to the public about inaugural crowds and over a campaign-style speech by the president before a memorial to fallen CIA officers.
On Saturday several million Americans poured onto the streets for women-led demonstrations against Trump, the scale of which were unseen in a generation, in a potent rebuke to the president.
Trump has upbraided top aides over unfavorable media coverage on everything from crowd sizes to suggestions he has ruled out releasing his taxes. He is the first presidential candidate in recent memory not to do so.
On Sunday the president vowed to swiftly start renegotiating NAFTA in upcoming talks with the leaders of Canada and Mexico.
Trump has already moved to curb Obama’s health care reforms and more quick legal tweaks — in the form of executive orders — are expected on immigration and limiting environmental legislation.
But more substantive changes will need buy-in from the Republican controlled Congress.
On Monday, Trump was hosting separate meetings with business leaders, unions and members of both houses of Congress.
He will also meet the speaker of the House of Representatives, Paul Ryan.
Tax reform is likely to be high on the agenda.
“What we’re doing is we are going to be cutting taxes massively for both the middle class and for companies, and that’s massively,” he said.
“A bigger thing, and that surprised me, is the fact that we’re going to be cutting regulation massively.”
Reform of Obama’s health care laws is also likely to be on the menu.
Trump has publicly promised that none of the tens of millions of Americans who obtained health insurance under Obama will lose it.
That makes any meaningful changes difficult to pay for.
But the more urgent task for Trump may be to keep always skeptical establishment Republicans on board the “Trump train.”
Trump’s approval rating is around 40 percent, according to the RealClearPolitics average, low for a president just starting out.
That could make legislators think twice about toeing the line with an unpopular leader.
But Trump’s bareknuckle style has also kept dissent in check, with some terrified they will become the object of a presidential tweet that sets off a world of political pain.
Sen. Ben Sasse was among the few who had mild criticism for Trump’s decision on the trans-Pacific trade deal.
“It’s clear that those of us who believe trade is good for American families have done a terrible job defending trade’s historic successes and celebrating its future potential,” he said.
“We have to make the arguments and we have to start now.”
On Thursday, Trump will travel to a Republican congressional retreat in Philadelphia to further build ties.
The following day, he will host British Prime Minister Theresa May — the fSeparately, after exiting the TPP, the new Republican president accused Japan and China of engaging in trade practices that are “not fair” to American companies.
As he signed the TPP order, Trump said: “We’ve been talking about this for a long time. Great thing for the American worker.”
Speaking in a meeting with business leaders earlier Monday, Trump stressed he wants “fair trade,” claiming countries such as Japan “charge a lot of tax” on U.S. products.
“If they’re going to charge tax to our countries — if as an example, we sell a car into Japan and they do things to us that make it impossible to sell cars in Japan. … It’s not fair,” he said.
Trump also singled out China, saying, “If you want to take a plant or you want to do something, you want to sell something into China and other countries, it’s very, very hard.”
“In some cases, it’s impossible,” he said. “They won’t even take your product.”