Donald Trump Withdraws U.S. From Trans-Pacific Partnership

TPP agreement was aimed at curbing China’s advantages.

President Donald Trump’s formal withdrawal from the 12-nation Pacific trade agreement, announced Monday, creates an American policy vacuum in a fast-growing region that includes China and longtime U.S. allies.

Mr. Trump’s move fulfilled a promise to end U.S. participation in the proposed TPP deal, which was intended in part to show Japan, Australia, New Zealand, Vietnam and other Pacific countries that the U.S. was doubling down on a region strained by China’s increasing economic and military assertiveness.

The official order he signed Monday effectively buries an agreement that was backed by the Obama administration and many congressional Republicans, but died in the 2016 election season.

In one respect, Mr. Trump’s action was symbolic, because congressional leaders and the Obama administration had signaled after the November election that there was no path forward for the TPP.

Still, that symbolism was large for an administration that wants to show it is serious about jettisoning decades of mostly steady trade liberalization in favor of more confrontation with China and other trading partners, with the potential for big tariffs if those countries don’t come to the table ready to make concessions. Mr. Trump and his advisers have eschewed multilateral trade blocs.

“This abrupt action so early in the Trump administration puts the world on notice that all of America’s traditional economic and political alliances are now open to reassessment, renegotiation and possibly even reversal,” said Eswar Prasad, a Cornell University economist and former top China official at the International Monetary Fund.

China was not part of the TPP agreement, signed last February, and the TPP would have provided more trade competition for Beijing by establishing a regional bloc where most goods and many services could cross borders duty-free. Rules curbing state-owned enterprises and standards on labor and the environment would also put pressure on Beijing’s policies over time, according to the Obama administration.

But during the campaign, TPP countries watched helplessly as U.S. politicians and voters grew increasingly skeptical of any benefits of free-trade pacts for workers, making trade a front-and-center negative issue for the first time in years and helping propel Mr. Trump to the White House.

Sen. John McCain (R., Ariz.) called Mr. Trump’s move a serious mistake. “It will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it,” he said.

But Mr. Trump dismissed U.S. alliances in the campaign, and in his inaugural address Friday he made “America first” the theme, vowing to buttress U.S. borders because “protection will lead to great prosperity and strength.”

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