Issue Brief on “Impact of Trump Backing out of TPP: An Opportunity for China in the Region”


US President Donald Trump vowed to renounce the Trans Pacific Partnership (TPP) on his first day in office. He kept his promise since he considered it a potential disaster which would further wreck the already troubled economy of America.[1]American trade policies for centuries have been in favor of free trade and open market, but Mr. Trump, under his slogan for ”America first” has come up with a protectionist agenda. The TPP was considered as the largest trade agreement in history which, when combined, made up 40% of the world’s economy, and producing accumulative $2.8 trillion annual gross domestic product (GDP). The signatory states include United States, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.[2]

Importantly, China, the second largest economy in the world was not part of this alliance and TPP was the pillar of Obama’s Pivot to Asia. Pivot to Asia was a key strategic move to strengthen economic and military ties with Asia Pacific Rim. Furthermore, the Bush, as well as the Obama administrations viewed it as a key strategy in expanding US influence on the region and counter China’s economic rise.  Now the big question is how China is going to take advantage out of Trump backing away from TPP, and whether China is ready to rewrite the economic rules of the globalized world.

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