Having initially focused on reducing the trade deficit, the Trump administration has raised a broader array of China-related issues:
- Concerns over challenges to US firms doing business in China, such as restrictions on foreign direct investment (FDI)
- Requirements such as mandatory joint venturing and technology transfer
- Regulations seen as challenging competitiveness
- Intellectual property protection
- US national security, including cyber threats and China’s stronger presence in Asia
2. Europe: how stable is the Union?
The nationalist challenge to EU cohesion has driven the negotiations over the UK’s withdrawal from the EU, the ascendance of the Five Star Movement and the Northern League coalition government in Italy, and the standoff between the EU and Poland over the supremacy of EU law. Meanwhile, Angela Merkel, who has mediated critical European crises over the past 10 years, stepped down as the leader of her party and announced she will end her political career in 2021. French President Emmanuel Macron, who positioned himself as a pro-European integrationist, is facing stiff resistance against his ambitious domestic reform agenda.
While Europe faces profound internal challenges, external ones loom large. Immigration and refugee flows have been managed in an ad hoc manner at best, and Russia’s military and cyber threats have grown.
Meanwhile, European leaders have been flummoxed by the US. President Trump has repeatedly questioned the need for NATO; the US has imposed tariffs on European steel and aluminum imports and threatened tariffs on automotive imports; and it has expressed support for Brexit, suggesting the UK would be “better off” without the EU, prompting European leaders to question US commitment to shared transatlantic objectives.
3. Global trade: evolution, not revolution
Despite the significant attention global trade received during the past two years, evolution, not revolution, has been the overriding paradigm in global trade relations. In fact, the G20 summit in late 2018 closed on a pro-trade and pro-investment note.
The US administration has been at the center of events in the trade arena near and far. In one of his first official acts, President Trump withdrew the US from the long-anticipated Trans-Pacific Partnership (TPP). The remaining 11 members moved on without the US, setting up a transformational Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), covering 480 million people and a combined 13.3% of global GDP.