President Donald Trump is reportedly getting very close to yanking the United States out of the Trans-Pacific Partnership.
This week, two sources familiar with the matter reportedly told CNN that the president plans to sign an executive order to withdraw from the negotiating process of the 12-country trade agreement. (The countries that agreed to the Trans-Pacific Partnership in 2015 were the U.S., Canada, Malaysia, Australia, Japan, New Zealand, Mexico, Peru, Chile, Singapore, Brunei and Vietnam.)
Throughout his campaign, Trump was vocal about his plans to keep the U.S. from moving forward with the sweeping trade deal, known as TPP. He later doubled down on his rhetoric: In a video message, Trump said that on the first day of his presidency he would issue a notification of intent to withdraw from TPP.
According to CNN, a senior White House official said the executive order on TPP is expected to be the first Trump will issue today, and it will become the administration’s first major action on foreign policy.
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Trump’s stance on trade has put him at odds with the fashion industry, particularly with brands such as Nike and major trade organizations, including the American Apparel & Footwear Association (AAFA) and the Footwear Distributors & Retailers of America (FDRA), which were major proponents of TPP.
Matt Priest, president and CEO of the FDRA, said in November that his organization believes that the nixing of the TPP could be the end of an unprecedented opportunity to not only lower production expenses but also slash end costs to consumers and create more American jobs — something that Trump also campaigned on.
“We had a once-in-a-generation opportunity within our grasp. We had a Republican Congress and a Democratic president who wanted to pursue this,” Priest said. “We had a half a billion dollars in savings during year one and $6 billion in duty savings over a decade — those are big numbers, and they mean a lot.”
TPP supporters also believe the deal’s demise signals a new opportunity for China to strengthen its influence — something it is already aggressively pursuing via its Regional Comprehensive Economic Partnership (RCEP), which notably excludes the U.S., as the TPP excluded China.
Bart van Ark, chief economist at The Conference Board, said last year that he believes tearing up the TPP “could backfire” on the U.S., particularly when it comes to China.
“China was not part of that agreement, and therefore [the end of TPP] creates more room for China to push forward its own agreement within the region,” van Ark said.
Priest shared those sentiments. “It seems kind of nonsensical to scrap an agreement that would help us build our economic relationships in the region against a rising Chinese influence and also help American consumers. Now, two of those things have gone away, instantly,” Priest argued.