Democratic Coalition
For its part, the U.S. is trying to build a more traditional coalition among free-market democracies. Last month, trade ministers from the U.S., EU and Japan expressed concern that “non-market-oriented” policies are hurting their workers and businesses and undermining global trade. Without naming China, they agreed to discuss new rules for addressing the market-distorting effects of state-owned enterprises and industrial subsidies.
That’s an improvement from earlier this year, when Trump was making more enemies than friends. At meetings of the G-20 and NATO, he vexed America’s traditional allies with his tariffs on steel and aluminum and distaste for global institutions. Since then, the president has launched formal trade talks with Europe and agreed on a revised trade agreement with South Korea and to start talks with Japan.
He has also reached a deal with Canada and Mexico, which their lawmakers must still approve, on a successor to the North American Free Trade Agreement.
The new Nafta, to be rebranded the U.S.-Mexico-Canada Agreement, contains a clause that allows any of the countries to terminate the agreement if one of them signs a trade deal with a “non-market economy.” While no country is named, the measure is clearly aimed at stopping Canada or Mexico from doing a deal with China.
“The U.S. is making an effort to isolate China on trade,” said Stephen Jen, CEO of Eurizon Slj Capital Ltd, an asset-management firm based in London. Efforts by China to win European support failed “because the EU is quietly pleased that the U.S. is confronting China on issues that have also bothered the EU,” said Jen.
This story provided by Bloomberg News.