Last week, the leaders of the world’s two largest economies gave important speeches offering diametrically opposed visions of the global economic order.
President Donald Trump’s inauguration speech on Friday made a forceful case for an “America First” policy that would defend the national economy from globalization. “One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind. The wealth of our middle class has been ripped from their homes and then redistributed all across the world,” Trump said, later adding, “We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.”
Three days earlier, at the World Economic Forum in Davos, Switzerland, Chinese President Xi Jinping presented his country as a defender of economic globalization and an exemplar of international cooperation on issues like climate change. “Pursuing protectionism is just like locking oneself in a dark room,” Xi argued. “While wind and rain may be kept outside, so are light and air. No one will emerge as a winner in a trade war.”
China is now closer to the international norm than the U.S. on such key issues as trade, climate change, and Israel-Palestine. Is America at risk of abdicating its international leadership role to China, just as the British Empire did in 1945?
Xi’s words at Davos were met with applause by the global elites there, suggesting some support for China’s ascension. “If people want to say China has taken a position of leadership, it’s not because China suddenly thrust itself forward as a leader,” Zhang Jun, head of the Chinese Foreign Ministry’s Office of International Economic Affairs, said. “It’s because the original frontrunners suddenly fell back and pushed China to the front.”
Trump’s protectionism is only one sign of that abdication of global leadership. “America First” encapsulates a larger turn to isolationism, as seen in Trump’s hostility to the Paris Climate Accord (which Xi insists is still necessary) and institutions like NATO, the United Nations, and the World Trade Organization.
“I warned you all back in October that the Chinese would seem like the last great liberals in the world,” Washington Post columnist Daniel Drezner wrote on Tuesday. “And now it appears to have come to pass.” He later added, “A large fraction of the world still believes in the liberal order that the United States helped to erect 70 years ago, even if the current U.S. administration does not. They will look to any country willing to publicly defend that power.”
Examples of this shift are already evident. Trump’s rejection of the Trans-Pacific Partnership has caused Asian nations like the Philippines, Singapore, and Malaysia to gravitate toward China’s alternative to the TPP, the Regional Comprehensive Economic Partnership. The Trump administration also seems to be abandoning the two-state solution, and China has decided to fill the vacuum. After Trump proposed moving the U.S. embassy to Jerusalem, Xi called for East Jerusalem to be capital of a Palestinian state and offered $7.6 million in aid to the Palestinians.
Drezner acknowledges that there is some hypocrisy in China taking up this mantle, since the nation itself practices mercantilism. But such hypocrisy is not uncommon: Earlier global hegemons, including the British Empire and the U.S., didn’t alway live up to the free trade principles they foisted on other countries. Indeed, part of the advantage of global hegemony is that it allows for greater room for hypocrisy in the dominant power.
If China does become the new global hegemon, it will act differently than the U.S. A dictatorship that values stability, China has no interest in democracy promotion or human rights (both of which Trump seems intent on abandoning anyway). China’s preferred trade agreements cut tariffs, without the labor or environmental protections that former President Barack Obama pushed for in TPP. At Davos, Xi pointedly praised “economic globalization” rather than globalization, period. Even within the domain of “economic globalization,” China doesn’t share the U.S.’s protectiveness of intellectual property.
Free trade and globalization are both likely to survive the Trump era. But the end result of Trump’s isolationism could be quite different than what he envisions. The country he’s most hostile to could assume the mantle of globalization, allowing it to set the terms for trade in a way that harms rather than benefits American workers. In supposedly putting America first, Trump could achieve quite the opposite, knocking the U.S. from its perch.