10619, 1052 AMGlobalization Is Not in RetreatPage 1 of .docx

10/6/19, 10:52 AMGlobalization Is Not in Retreat
Page 1 of 8https://www.foreignaffairs.com/print/1122156
Home > Globalization Is Not in Retreat
Monday, April 16, 2018 - 12:00am
Globalization Is Not in Retreat
Digital Technology and the Future of Trade
Susan Lund and Laura Tyson
SUSAN LUND is a Partner at McKinsey & Company and a
leader of the McKinsey Global
Institute. LAURA TYSON is Distinguished Professor of the
Graduate School at the Haas School
of Business at the University of California, Berkeley. She
served as Chair of the White House
Council of Economic Advisers during the Clinton
Administration.
LAURA TYSON is Distinguished Professor of the Graduate
School at the Haas School of
Business at the University of California, Berkeley. She served
as Chair of the White House
Council of Economic Advisers during the Clinton
administration.
By many standard measures, globalization is in retreat [1]. The
2008 financial crisis and the
ensuing recession brought an end to three decades of rapid

growth in the trade of goods and
services. Cross-border financial flows have fallen by two-thirds.
In many countries that have
traditionally championed globalization, including the United
States and the United Kingdom, the
political conversation about trade has shifted from a focus on
economic benefits to concerns
about job loss, dislocation, deindustrialization, and inequality
[2]. A once solid consensus that
trade is a win-win proposition has given way to zero-sum
thinking and calls for higher barriers.
Since November 2008, according to the research group Global
Trade Alert, the G-20 countries
have implemented more than 6,600 protectionist measures.
But that’s only part of the story. Even as its detractors erect
new impediments and walk away
from free-trade agreements, globalization is in fact continuing
its forward march—but along new
paths. In its previous incarnation, it was trade-based and
Western-led. Today, globalization is
being driven by digital technology and is increasingly led by
China and other emerging
economies. While trade predicated on global supply chains that
take advantage of cheap labor is
slowing, new digital technologies mean that more actors can
participate in cross-border
transactions than ever before, from small businesses to
multinational corporations. And
economic leadership is shifting east and south, as the United
States turns inward and the EU and
the United Kingdom negotiate a divorce [3].

of 8https://www.foreignaffairs.com/print/1122156
In other words, globalization has not given way to
deglobalization; it has simply entered a
different phase. This new era will bring economic and societal
benefits, boosting innovation and
productivity, offering people unprecedented (and often free)
access to information, and linking
consumers and suppliers across the world. But it will also be
disruptive. After certain sectors fade
away, certain jobs will disappear, and new winners will emerge.
The benefits will be tangible and
significant, but the challenges will be considerable. Companies
and governments must prepare
for the coming disruption.
THE NEW ERA
The threads that used to weave the global economy together are
fraying. Beginning in the 1980s,
the falling costs of transportation and communication, along
with a raft of new multilateral free-
trade agreements, caused international commerce to swell.
Between 1986 and 2008, global
trade in goods and services grew at more than twice the pace of
global GDP. For the last five
years, however, growth in trade has barely outpaced global GDP
growth. A weak and uneven
recovery from the Great Recession explains part of the trade
slowdown, but structural factors are
also to blame [4]. Global value chains, which gave rise to a
growing trade in manufactured parts,
have reached maturity; most of the efficiency gains have
already been realized. Although the
location of production will continue to shift among countries in

response to differences in wages
and the prices of other factors of production—from China to
Vietnam and Bangladesh, for
example—these shifts will merely change the patterns of trade.
They will not increase its overall
volume.
Cross-border financial flows—which include purchases of
foreign bonds and equities,
international lending, and foreign direct investment—grew from
four percent of global GDP in
1990 to 23 percent on the eve of the financial crisis, but they
have since fallen to just six percent.
Trade in services, meanwhile, has increased, but it is growing
slowly and is unlikely to assume
the role that trade in goods has played in driving globalization.
That’s because most services
simply cannot be bought and sold across national borders: they
are local (dining and
construction), highly regulated (law and accounting), or both
(health care).
This is where digital flows come in, from e-mailing and video
streaming to file sharing and the
Internet of Things. The movement of data is already surpassing
traditional physical trade as the
connective tissue in the global economy: according to Cisco
Systems, the amount of cross-
border bandwidth used grew 90-fold from 2005 to 2016, and it
will grow an additional 13-fold by
2023. The number of minutes of all Skype calls made now
equals approximately 40 percent of all
traditional international phone call minutes. Although digital
flows today mostly link developed
countries, emerging economies are catching up quickly.

This surge in the movement of data not only constitutes a huge
flow in and of itself; it is also
turbocharging other types of flows. Half of all trade in global
services now depends on digital
technology one way or another. Companies can cut losses on
goods in transit by installing
tracking sensors on shipments—by 30 percent or more, in
McKinsey’s experience. They can also
reach consumers around the world without going through retail
shops. AliResearch (the research
arm of the Chinese online shopping company Alibaba) and the
consulting firm Accenture project
that by 2020, cross-border e-commerce will reach one billion
consumers and total $1 trillion in
annual sales.
The countries that led the world during the last era of
globalization may not necessarily be the
same ones that thrive in the new one [5]. Consider Estonia,
which has a population of just 1.3
million but has emerged as a giant in the digital era. Its
pioneering e-government initiative allows
Estonians to go online to vote, pay taxes, and appear in court,
all with a digital identity card.
Once an economy based heavily on logging, Estonia is now
home to the founders of Skype and
other technology start-ups, and it has historically been one of
the fastest-growing economies in
the EU.

Digital flows are also upending the corporate world. Giant
multinational firms have long
dominated the trade in goods and services, but digital platforms
have made it easier for smaller
firms to muscle their way in. So-called micro-multinationals can
use online marketplaces to reach
far more customers than ever before; Amazon hosts two million
third-party sellers, and Alibaba
hosts more than ten million. Some 50 million small and
medium-sized enterprises use Facebook
for marketing, and nearly 40 percent of their fans are foreign.
Digital platforms and marketplaces
such as these are creating vast new opportunities for small
businesses, which form the bedrock
of employment in most countries.
THE RISE OF THE REST
As globalization has gone digital, its center of gravity has
shifted. As recently as 2000, just five
percent of the companies on the Fortune Global 500 list, the
world’s largest international
companies, were headquartered in the developing world. By
2025, by the McKinsey Global
Institute’s estimate, that figure will reach 45 percent, and China
will boast more companies with
$1 billion or more in annual revenues than either the United
States or Europe. The United States
continues to produce the majority of digital content consumed
in most parts of the world, but that,
too, will likely soon change, as Chinese Internet giants such as
Alibaba, Baidu, and Tencent rival
Amazon, Facebook, and Google. China now accounts for 42
percent of global e-commerce
transactions by value. The country’s investments in artificial
intelligence [6], while still lagging

behind those of the United States, are more than double
Europe’s. In 2017, China announced an
ambitious investment plan designed to turn the country into the
world’s leading center for artificial
intelligence research by 2030.
The geography of globalization is even changing within the
developing world. The McKinsey
Global Institute predicts that roughly half of global GDP growth
over the next ten years will come
from some 440 rapidly expanding cities and regions in the
developing world, some of which
Western executives may not be able to find on a map, such as
the city of Hsinchu in Taiwan or
the state of Santa Catarina in Brazil. Moreover, as many as one
billion people in these places will
see their incomes rise above $10 a day, high enough to make
them significant consumers of
goods and services—at the same time that tens of millions of
Americans, Europeans, and
Japanese will enter retirement and reduce their spending.
The world economy is already adapting to this new reality.
Today, more than half of all
international trade in goods involves at least one developing
country, and trade in goods between
developing countries—so-called South–South trade—grew from
seven percent of the global total
in 2000 to 18 percent in 2016. So open is Asia that the region
more than doubled its share of
world trade (from 15 percent to 35 percent) between 1990 and
2016. Remarkably, more than half
of that trade stays within the region, a similar proportion to that
found in Europe, a much richer
region with its own free-trade zone.

As Washington pulls back from global trade agreements [7], the
rest of the world is moving
forward without it. After the United States withdrew from the
Trans-Pacific Partnership, the
remaining 11 countries negotiated their own pact, the
Comprehensive and Progressive
Agreement for Trans-Pacific Partnership, which was signed in
March. This version left out 20
provisions that were important to the United States, including
ones concerning copyright,
intellectual property, and the environment. Separately, a number
of Asian countries are
negotiating the Regional Comprehensive Economic Partnership,
a trade deal that includes all the
members of the Association of Southeast Asian Nations plus
Australia, China, India, Japan, New
Zealand, and South Korea—but not the United States. If
ratified, this agreement would cover
about 40 percent of global trade and nearly half of the world’s
population. Meanwhile, the EU has
struck new bilateral trade arrangements with countries including
Canada and Japan, and it is
negotiating one with China. So busy is the EU making such
deals, in fact, that its agricultural,
environmental, and labor standards may soon become the new
benchmarks in global trade.
One notable aspect of this realignment is that China has gained
a greater voice as a champion of
globalization. To provide a counterweight to Washington-based

economic institutions, Beijing has
launched numerous initiatives of its own, including the Asian
Infrastructure Investment Bank,
which has attracted 57 member nations, many of them U.S.
allies that joined over the objection
of the United States. Together with Brazil, India, and Russia,
China was a driving force behind
the creation of the New Development Bank, an alternative to the
World Bank. The China-Africa
Investment Forum, an annual meeting begun in 2016, is gaining
momentum as a platform for
deals in Africa. Then there is the Belt and Road Initiative [8],
China’s $1 trillion plan to add
maritime and land links in Eurasia. Although still at an early
stage, it could prompt a major shift in
the pattern of global investment, spurring faster economic
growth across Asia and connecting
many countries that the last era of globalization left behind.
THE COMING DISRUPTION
Although it will lead to countless new opportunities, the new
era of globalization will also present
considerable challenges to individuals, companies, and
countries. For one thing, because
openness will be so rewarded, developing countries now at the
periphery of global connections
risk falling further behind, especially if they lack the
infrastructure and skills to benefit from digital
trade. With global trade tensions mounting, it is essential to
recognize that countries will reap
economic gains not from export surpluses but from both inflows
and outflows. In fact, as in the
past, it is precisely the countries that open themselves up to
foreign competition, foreign
investment, and foreign talent that stand to benefit the most in

the new era.
One consequence of openness has been immigration [9]. In the
past 40 years, the number of
migrants worldwide has tripled. Today, almost 250 million
people live and work outside their
country of birth, and 90 percent of them do so voluntarily to
improve their economic prospects,
with the remaining ten percent being refugees and asylum
seekers. Economic migrants have
become a major source of growth. According to the McKinsey
Global Institute, they contribute
approximately $6.7 trillion to the world economy every year, or
nine percent of global GDP—
some $3 trillion more than they would have produced had they
stayed in their home countries.
But for some workers, the rapid expansion of trade has led to
stagnant wages or lost jobs. As the
economists David Autor, David Dorn, and Gordon Hanson have
found, of the roughly five million
U.S. manufacturing jobs lost between 1990 and 2007, a quarter
disappeared because of trade
with China. And as the economist Elhanan Helpman has
concluded, although globalization
explains just a small part of the rise in inequality over the last
few decades, it has still contributed
to it, by making the skills of experts and professionals more
valuable while lowering the wages of

workers with less education and more generic skills.
Globalization has its winners and losers [10],
and in theory, the gains should be big enough to compensate the
losers. But in practice, the
benefits have rarely been redistributed, and the communities
and workers harmed by
globalization have turned to populism and protectionism.
The new era of globalization will also prove disruptive, in that
it will intensify competition; indeed,
it already has. New ideas now flow around the world at an
astonishing speed, allowing
companies to react to demand faster than ever before. Fashion
retailers such as H&M and Zara
can take a trendy idea and turn it into clothing on the rack in
just weeks, rather than the months it
used to take. The flip side is that the period during which a
company can profit from an
innovation before competitors copy it has shrunk dramatically.
As a result, product life cycles
have become shorter—by 30 percent over the past 20 years in
some industries. Meanwhile, the
variety of products is exploding, and many industries are
adopting “mass customization,” using
technology to produce built-to-order goods without sacrificing
economies of scale.
The growing economic clout of developing countries is also
changing the rules of competition.
Companies from emerging economies are taking a growing
share of global revenue, and their
governance structures differ from those of companies in the
United States and other developed
countries. In emerging markets, firms are more often state- or
family-owned and less often
publicly traded. They therefore face less pressure to hit

quarterly profit targets and can make
longer-term investments that take time to pay off. Developing-
world companies also tend to enjoy
lower costs of capital, lower taxes, and lower dividend payouts,
enabling them to sell goods and
services at smaller profit margins compared with U.S. and
European companies. The balance
sheets reveal the difference: for companies in advanced
economies, improvements in overall
profits stem largely from growing margins, whereas for
companies in emerging markets, they
come from growing revenues.
Because the rise of digital flows is increasing competition in
knowledge-intensive sectors, the
importance of intellectual property is growing, generating new
forms of competition around
patents. One example is the development of “patent thickets,”
clusters of overlapping patents
that companies acquire to cover a wide area of economic
activity and impede competitors.
Another is the practice of “patent fencing,” whereby firms apply
for multiple patents in related
areas with the intention of cordoning off future research in
them. The smartphone industry and
the pharmaceutical industry have been particularly hard hit by
these tactics.
As digital flows grow, some governments have turned to digital
protectionism. Invoking concerns
about cybersecurity [11], China enacted a new law in 2016 that
requires companies to store all
their data within Chinese borders, pass security reviews, and
standardize the collection of
personal information, effectively giving the government access
to vast amounts of private data. A

similar law went into effect in Russia in 2015. Rules requiring
companies to build data servers in
each country where they operate threaten their economies of
scale and increase their costs. Not
surprisingly, these and other forms of digital protectionism
inhibit economic growth—reducing
growth rates by as much as 1.7 percentage points, according to
the Information Technology and
Innovation Foundation.
Digital technologies are also affecting companies’ decisions
about where to locate their factories.
For most manufactured products, digitally driven automation is
making labor costs less relevant,
reducing the appeal of global supply chains premised on low-
cost foreign workers. Today, when
multinational companies choose where to build plants, they
more heavily weigh factors other
than labor costs, such as the quality of the infrastructure, the
distance to consumers, the costs of
energy and transportation, the skill level of the labor force, and
the regulatory and legal
environment. As a result, some types of production are shifting
from emerging markets back to
advanced economies, where labor costs are considerably higher.
(In 2015, for instance, Ford
moved its production of pick-up trucks from Mexico to Ohio.)
Three-dimensional printing could
have a similar effect. Already, companies are using 3-D printers
to produce parts for tankers and

gas turbines in the locations where they are needed. These
trends are good news for the United
States and other developed countries, but they are bad news for
low-wage countries. It’s now far
less clear that other developing countries in Africa and Asia
will be able to follow the path that
China and South Korea did to move tens of millions of workers
out of low-productivity agriculture
and into higher-productivity manufacturing.
BE PREPARED
In the new era, digital capabilities will serve as rocket fuel for a
country’s economy. Near the top
of the policy agenda, then, should be the construction of robust
high-speed broadband networks.
But governments should also create incentives for companies to
invest in new digital
technologies and in the human capital they require, especially
given how low productivity growth
has stayed. Since digital literacy will be even more essential
than it already is, schools will have
to rethink their curricula to emphasize digital skills—for
example, introducing computer coding in
elementary school and requiring basic engineering and statistics
in secondary school.
When negotiating trade agreements, policymakers will need to
make sure that issues such as
data privacy and cybersecurity figure prominently. Currently,
rules vary widely from place to place
—the EU’s new data regulations that are scheduled to come into
effect this year, for example, are
far more restrictive than those in the United States—and so
governments should seek to
harmonize them when possible. The trick will be to strike the

right balance between protecting
individual rights and remaining open to digital flows.
Negotiators should also seek to remove
tariffs and other barriers that have hampered trade in computer
hardware, software, and other
knowledge-intensive products. Laws requiring data to be stored
locally are particularly
burdensome in the era of cloud storage. And to make it easier
for smaller companies to ship
smaller quantities of goods globally, customs regulations will
need to be revamped to do away
with much of the red tape that exists. The World Trade
Organization’s Trade Facilitation
Agreement, which came into effect in 2017, has helped simplify
the import-export process, but
there is room to broaden it.
In order to maintain political and societal support for digital
globalization, governments will have
to make sure that its benefits are distributed widely [12] and
that those who have been harmed are
compensated. (Indeed, it was partly the failure to do this during
the last era of globalization that
led to the populist backlash rocking the United States and other
countries today.) To help those
displaced by globalization both old and new, governments
should offer temporary income
assistance and other social services to workers as they train for
new jobs. Benefits should be
made portable, ending the practice of tying health-care,
retirement, and child-care benefits to a
single employer and making it easier to change jobs. Finally,
governments should expand and

improve their worker-training programs to teach the skills
needed to succeed in the digital era, a
move that would reverse the decline in spending on worker
training that has taken place over the
past decade in nearly all advanced countries.
Work-force training alone will not solve the problems faced by
smaller communities built on
declining industries; what’s also needed are initiatives to
revitalize local economies and nurture
new industries. At the same time, governments should recognize
that the geography of
employment is changing. In the United States, for example, the
jobs are moving from smaller
Midwestern cities to faster-growing urban areas in the South
and the Southwest. So the goal
should be to make it easier for people to move to where the jobs
are—for example, by offering
one-time relocation payments to help defray the costs of
moving.
The era of digital trade will also pose considerable challenges
for the private sector. Setting aside
the serious problem of cyberattacks, companies will need to
invest more in digital technologies,
including automation, artificial intelligence, and advanced
analytics, in order to remain
competitive. That will mean developing their own digital
capabilities and partnering with, or
acquiring, digital players. Successful global companies, whether
large or small, will also need to
compete strenuously in the global battle for talent, especially

for top managers who have both an
understanding of technology and an international perspective.
Firms can gain an edge in this
battle by spreading their research and development and other
core functions across the world, a
shift that would tap talent from different places, thus ensuring
diversity of thinking.
Corporate strategy will also need to be reset: no longer will
companies be able to rely on highly
centralized approaches to producing and selling their goods now
that consumers around the
world expect customized products to meet their tastes.
Increasingly, companies will need a
strong local presence and a differentiated strategy in the
markets where they compete. That will
require strong relationships with governments and a
commitment to corporate social
responsibility.
Globalization is not in retreat. A revamped version of it, with
digital underpinnings and shifting
geopolitics, is already taking shape. In its last incarnation,
globalization became a battleground
for opposing forces: on one side stood the political and business
elites who benefited the most,
and on the other stood the workers and communities that
suffered the most. But while debates
raged between these two groups about the effects of
globalization, globalization itself proceeded
apace. Today, the same debates about globalization’s effects on
employment and inequality
continue, even as its new, digital form is gaining momentum.
Rather than relitigating old debates,
it is time to accept the reality of the new era of globalization
and work to maximize its benefits,

minimize its costs, and distribute the gains inclusively. Only
then can its true promise be realized.
Copyright © 2019 by the Council on Foreign Relations, Inc.
All rights reserved. To request permission to distribute or
reprint this article, please visit
ForeignAffairs.com/Permissions.
Source URL:
https://www.foreignaffairs.com/articles/world/2018-04-
16/globalization-not-retreat
Links
[1] https://www.foreignaffairs.com/articles/world/2017-06-
13/why-globalization-stalled
17/globalization-rage
[3] https://www.foreignaffairs.com/reviews/review-essay/2017-
10-16/why-british-chose-brexit
[4] https://www.foreignaffairs.com/articles/united-states/2016-
02-15/age-secular-stagnation
[5] https://www.foreignaffairs.com/reviews/review-essay/2016-
02-15/innovation-over
[6] https://www.foreignaffairs.com/articles/china/2017-12-
05/artificial-intelligence-and-chinese-power
[7] https://www.foreignaffairs.com/articles/americas/2016-11-
22/tpp-rip
[8] https://www.foreignaffairs.com/articles/asia/china-s-
infrastructure-play

[9] https://www.foreignaffairs.com/topics/refugees-migration
[10] https://www.foreignaffairs.com/reviews/review-
essay/2017-08-15/what-kills-inequality
22/how-us-can-play-cyber-offense
[12] https://www.foreignaffairs.com/reviews/review-
essay/2017-10-16/how-should-governments-address-inequality
10/5/19, 6:27 PMReckless Choices, Bad Deals, and Dangerous
Provocations
Home > Reckless Choices, Bad Deals, and Dangerous
Provocations
Friday, September 27, 2019 - 8:00am
Reckless Choices, Bad Deals, and Dangerous Provocations
Trump’s Foreign Policy Is in a Downward Spiral Toward 2020
Hal Brands
HAL BRANDS is Henry Kissinger Distinguished Professor at
Johns Hopkins-SAIS, a scholar at
the American Enterprise Institute, and a Bloomberg Opinion
columnist.
Superpowers have a lot of room for error. Unlike lesser nations,
they can shrug off many of the
consequences of failed policies. Their weight and influence can
compensate for subpar
statecraft. But bad policy eventually takes its toll on everyone.
And right now, bad policy is taking
its toll on the United States.

As U.S. President Donald Trump nears the fourth year of his
presidency, he confronts the
damage wrought by his own policies almost everywhere. The
Trump administration has
maneuvered itself into diplomatic cul-de-sacs with Iran, North
Korea, and Venezuela. It has
undermined its own efforts to end the war in Afghanistan. The
economic damage from Trump’s
trade war with China is mounting, and Beijing shows few signs
of giving in. At the same time, the
president’s laceration of alliances leaves the United States
weaker and more isolated.
For three years, Trump has played fast and loose with American
power—picking fights with little
thought to how and whether the United States can win them,
damaging relationships he needs to
accomplish his objectives, and shunning the systematic policy
work that superpowers must
embrace. The cost of this negligence is finally coming due.
Things could get worse in 2020. The president has always styled
himself as the ultimate deal-
maker, and his desire for diplomatic breakthroughs will grow as
the presidential election
approaches. Yet U.S. competitors can see that Trump is in a
tight spot, so they will offer him a
choice between bad deals and no deals. They may even pursue
escalatory strategies to dial up
the pressure on a floundering superpower. A few constructive
initiatives notwithstanding, the
overall trajectory of Trump’s foreign policy has been steadily
downward. Year four could be the
most dangerous yet.

A YEAR OF BAD CHOICES
Trump’s foreign policy has unfolded in phases, corresponding
to each of his years in office. In
2017, the “axis of adults”—principally Secretary of Defense
James Mattis, Secretary of State Rex
Tillerson, and National Security Adviser H. R. McMaster—
constrained some, if not all, of Trump’s
most disruptive impulses. In 2018, Trump broke free [1],
installing more pliant advisers and
Provocations
pursuing his own policy priorities—such as withdrawing from
the Iran nuclear deal and imposing
punitive tariffs on allies. The current year, 2019, has been the
year of living dangerously, as
Trump’s ill-considered and sometimes contradictory policies
have started to catch up with him.
And 2020 is shaping up to be the year of bad choices: one in
which Trump’s gambits finally
unravel and his options diminish.
Consider the state of U.S. policy toward the three rogue regimes
that have consumed so much of
the administration’s attention. In Venezuela, President Nicolas
Maduro is entrenching [2] himself
for the long haul, and Trump’s threats to use force to bring
about regime change have been
exposed as cheap bluster. Similarly, in North Korea, the
president’s mix of maximum pressure

and maximum engagement has failed to deliver progress toward
denuclearization, leaving him
clinging to the fantasy that he has solved [3] that problem even
as Pyongyang improves [4] its
nuclear and missile arsenals. And in the Persian Gulf, Trump’s
abandonment of the Iran nuclear
deal has backfired: Iran responded to American sanctions with
its own maximum pressure
campaign, attacking tankers in the Gulf, downing a U.S. drone,
and carrying out a dramatic
assault on Saudi Arabia’s oil infrastructure [5]. The resulting
crisis has rattled the global oil market
and revealed that Trump had little desire for the showdown his
confrontational policies were
bound to provoke. His administration is now torn between
efforts to intensify the pressure on Iran
and Trump’s own desire to launch negotiations to bring Tehran
back into the compliance with the
deal he scuttled.
Trump’s policies have run into trouble elsewhere, as well. In
Afghanistan, the president is
searching, reasonably enough, for a way to negotiate an end to
that conflict, but he has
simultaneously undermined his diplomats by telegraphing [6]
his desire to withdraw U.S. troops
before November 2020. And contrary to Trump’s boast that
trade wars are easy to win, his
commercial conflict with China has not played out as planned.
Reciprocal tariff hikes are surely
doing real damage to the Chinese economy, but they are also
increasing the recessionary
pressures on the U.S. economy. Having initially sought to cut a
deal, the Chinese government
now shows little interest in the economic grand bargain that
Trump reportedly seeks. The

president deserves credit for taking a harder line against a rising
challenger, and the Pentagon’s
China-focused defense strategy is a positive step. But in nearly
three years, the Trump
administration has still not developed a comprehensive [7]
approach for competing with China—in
part because Washington’s attention is elsewhere, on
Venezuela, North Korea, and Iran.
At a time of great upheaval, even a superpower needs allies. But
Trump’s public attacks on allied
leaders; unilateral abandonment of international agreements;
and punitive tariffs against close
U.S. allies have weakened the relationships that Washington
will need to confront short-term
crises like the one in the Persian Gulf as well as grave longer-
term threats from China and
Russia. U.S. allies in Europe have hesitated [8] to follow
Trump’s lead in resisting Chinese
domination of the world’s 5G telecommunications networks, for
example, in part because of the
Trump administration’s allergy to meaningful consultation and
in part because they worry that the
U.S. president will ultimately make a bilateral trade deal with
Beijing, leaving them isolated.
Similarly, European allies have distanced themselves from
Trump’s confrontation with Tehran
(although they now agree with the U.S. assessment that Iran was
behind the attacks on Saudi
Arabia), while mounting a longer-run effort to blunt U.S.
financial power by creating mechanisms
to bypass American sanctions.

Provocations
To be fair, Trump deserves credit for some of his more
constructive policies, such as modestly
strengthening the U.S. and NATO posture in eastern Europe,
expanding defense assistance to
Ukraine, and presiding over a badly needed increase in the
defense budget. His basic instincts—
that China poses a severe threat to U.S. interests, that U.S.
alliances need updating, and that
unfettered economic integration is not necessarily an unalloyed
good—are far from crazy. And
even Trump’s haphazard policies have put U.S. competitors
under strain. Foreign policy is
ultimately about results, though, and this administration has
relatively little to show on many of
the issues that the president has put front and center.
This is not especially surprising. Since Trump took office, he
has combined disdain for the block-
and-tackle work of policymaking—setting objectives and
priorities, connecting goals to
capabilities, realistically assessing U.S. competitors as well as
the geopolitical environment,
negotiating in a systematic and disciplined manner—with an
offense-in-all-directions approach
that generates multiple crises while weakening the United
States’ overall diplomatic
effectiveness. The price of that approach is now apparent.
NO TIME FOR A REBOOT
An ordinary administration would take this moment to repair the
policymaking process and

steady the ship of state. But Trump’s hollowed-out
administration, in which turnover is rampant
and dozens of mid- and upper-level posts remain vacant, is ill
equipped for a serious turnaround.
The president recently appointed a new national security
adviser, Robert O’Brien, and a well-
respected Asia adviser, Matthew Pottinger, as deputy national
security adviser. Yet it seems
unlikely that these officials will have a real mandate for change.
The national security process
ultimately reflects the president’s personality, and so far Trump
has shown himself incapable of
the introspection required to admit when his policies are failing
or the discipline needed to devise
and execute effective statecraft. Personnel may change in the
late innings of Trump’s presidency,
but the quality of policy probably won’t improve dramatically.
As a result, 2020 is likely to be a rough year in U.S. foreign
policy. The United States will face
multiple crises and critical decisions at once. Handling several
challenges simultaneously is hard
enough when an administration is firing on all cylinders. The
difficulty multiplies when the team in
power is short-handed and the president behaves erratically. At
best, then, the United States will
limp through 2020, stumbling from crisis to crisis, struggling to
shape events and use its vast
power effectively.
Yet there is also another possibility—one that seems more
benign but could actually be quite
damaging. As a self-proclaimed deal-maker, Trump sees
coercion as the prelude to negotiating
favorable agreements. As the 2020 election approaches, he will
probably feel pressure to

conclude deals that allow him to claim victory and deliver on
earlier promises. A peace accord
with the Taliban will be high on Trump’s list (despite his public
claims that he ended the peace
talks). So will deals to de-escalate the crisis with Tehran and
the trade war with Beijing. As
Thomas Wright of the Brookings Institution has written [9],
Trump will want to pivot away from
confrontation and toward diplomacy. The president recently
broke with former National Security
Adviser John Bolton, the last official who strongly opposed this
agenda.
Provocations
There’s only one problem: Trump has a weak negotiating hand
and his interlocutors know it. In
Afghanistan, the Taliban has every reason to expect that Trump
will grow more desperate—and
more pliable—in the run-up to November 2020. Chinese leaders
have now seen how jumpy the
U.S. president gets when the stock market swoons, presumably
confirming their belief that
China’s authoritarian system can withstand the pain of a trade
war better than the United States.
For his part, North Korean leader Kim Jong Un knows that a
president who has prematurely
declared victory in nuclear diplomacy can ill afford [10] to see
a new crisis flare up. And the
Iranians have discovered that Trump talks tough and deploys
sanctions aggressively, but—in

typically contradictory fashion—doesn’t really want a major
diplomatic or military crisis in the
Gulf.
So Trump’s interlocutors won’t be in a hurry to conclude
agreements unless they can drive some
hard bargains. The Iranians have shown [11] little interest in
Trump’s efforts to initiate talks at the
UN General Assembly, making clear that they want significant
sanctions relief first. When the
president reached [12] for a Camp David summit to end the war
in Afghanistan, the Taliban
ultimately held him at arm’s length. The Chinese appear to have
backed away from their earlier
effort to reach a grand economic bargain with Washington—in
part because they worry that
Trump won’t honor it but also because they seem to think that
time [13] is working in their favor.
Trump may even discover that pressure tactics work both ways.
If Pyongyang believes that
Trump is in a tough political position, why not increase its
leverage with a few select
provocations? Such a strategy appears to be behind Kim’s
recent short-range missile tests. In a
similar vein, if Iran perceives Trump to be simultaneously
hostile and weak, why not use missiles,
special forces, and other asymmetric capabilities to generate
counter-leverage? This is precisely
the playbook Iran has used since Trump’s campaign of
“maximum” economic pressure really
began to hurt in early 2019. The same basic strategy—pressing
for advantage at a moment of
apparent American weakness—could easily appeal to other
competitors as well. Rather than a
year of diplomatic breakthroughs, 2020 could be a year of

dangerous provocations.
INTERNATIONALISM REVIVED?
Better news about the United States’ role in the world comes in
the realm of public opinion. Many
commentators saw [14] Trump’s victory in 2016 as a harbinger
[15] of a broader [16] American retreat
from global leadership. Why else would Americans choose a
president who vehemently criticized
so many features of the international order Washington built
after World War II? Yet something
interesting happened after Trump became president: Americans
became modestly more
internationalist in their views.
Recent polling shows that American support for free trade has
risen considerably [17] since 2016.
Support for key military alliances and stationing troops
overseas has also risen. And while
concepts like the “liberal international order” are meaningless
[18] to most Americans, a clear
majority of respondents to a recent poll by the Center for
American Progress believe the jargon-
free equivalent: “Our country’s commitment to taking a leading
role in shaping security and
economic affairs around the world after World War II led to
safer and more prosperous lives for
Americans.”
Provocations

To be sure, there are still cracks [19] in the political foundation
of American internationalism. The
same polling shows that Americans will be reluctant [18] to
support an ambitious foreign policy
unless pressing domestic problems are addressed first. Yet the
Trump presidency hasn’t
dramatically eroded public support for an internationalist
foreign policy. On the contrary,
Americans are increasingly supportive of some of the policies
that Trump has most vehemently
attacked, such as trade and alliances. It is hard to say precisely
why this is happening. But given
that Trump’s foreign policy approval [18] ratings are low—
around 40 percent—it seems plausible
that his conduct is reminding some Americans why stable,
constructive American leadership is
necessary.
If Trump loses in 2020, the next president may be able to
harness this rising popular
internationalism in a bid to repair the damage Trump has done
to the United States’ position in
the world. Alas, given what has happened over the last three
years, and what is likely to happen
in the next, there will be a lot to repair.
Copyright © 2019 by the Council on Foreign Relations, Inc.
All rights reserved. To request permission to distribute or
reprint this article, please visit
ForeignAffairs.com/Permissions.
Source URL: https://www.foreignaffairs.com/articles/2019-09-
27/reckless-choices-bad-deals-and-dangerous-
provocations

Links
[1] https://www.theatlantic.com/ideas/archive/2019/07/trump-
tries-to-fix-his-foreign-policy-without-bolton/593284/
[2] https://www.worldpoliticsreview.com/articles/28201/is-
trump-suddenly-looking-for-a-diplomatic-breakthrough-with-
venezuela
[3]
https://www.apnews.com/79a6ec899f4c4fa08adbd05d4315ae24
[4] https://www.vox.com/2019/8/12/20801816/north-korea-
nuclear-missile-tests-trump
[5] https://www.washingtonpost.com/opinions/2019/09/17/how-
trump-played-himself-gave-irans-hard-liners-what-they-
wanted/
[6] https://www.nbcnews.com/news/military/trump-wants-pull-
all-troops-out-afghanistan-2020-election-n1038651
[7]
https://www.japantimes.co.jp/opinion/2019/06/21/commentary/
world-commentary/americas-indo-pacific-strategy-
wont-scare-china/
[8] https://www.foreignaffairs.com/articles/china/2019-08-
12/old-world-and-middle-kingdom
[9] https://www.theatlantic.com/ideas/archive/2019/09/trumps-
foreign-policy-pivot/597901/
[10] https://www.nytimes.com/2019/02/28/world/asia/trump-
north-korea-nuclear-sanctions.html
[11] https://www.independent.co.uk/news/world/americas/iran-
donald-trump-hassan-rouhani-meeting-united-nations-
saudi-arabia-a9115086.html
[12]
https://www.nytimes.com/2019/09/08/world/asia/afghanistan-
trump-camp-david-taliban.html
[13]
https://www.scmp.com/news/china/economy/article/2161726/ti
me-beijings-side-china-not-trump-will-triumph-trade-
war-former
[14] https://warontherocks.com/2017/05/is-american-

internationalism-dead-reading-the-national-mood-in-the-age-of-
trump/
[15] https://www.washingtonpost.com/outlook/2019/04/16/us-
grand-strategy-rip/
[16] https://www.ft.com/content/782381b6-ad91-11e6-ba7d-
76378e4fef24
[17] https://www.nbcnews.com/politics/meet-the-press/support-
free-trade-reaches-new-high-nbc-wsj-poll-n1043601
[18]
https://www.americanprogress.org/issues/security/reports/2019/
05/05/469218/america-adrift/
[19]
https://books.google.com/books/about/The_Lessons_of_Tragedy
.html?id=h_OFDwAAQBAJ

10619, 1052 AMGlobalization Is Not in RetreatPage 1 of .docx

Recommended

Recommended

More Related Content

Similar to 10619, 1052 AMGlobalization Is Not in RetreatPage 1 of .docx

Similar to 10619, 1052 AMGlobalization Is Not in RetreatPage 1 of .docx (20)

More from aulasnilda

More from aulasnilda (20)

Recently uploaded

Recently uploaded (20)

10619, 1052 AMGlobalization Is Not in RetreatPage 1 of .docx