(Yicai) April 11 -- “America First” trade and investment policies have become an important plank of the US government’s economic strategy. Ostensibly, they aim to promote US economic development and ensure national security, but will in fact undermine not only the stability and development of global supply chains, but also the rules-based international economic order established after World War II.

The claim for the “America First” trade policy is that it will alleviate the trade deficit, increase fiscal revenue, and promote the return of manufacturing to the United States by imposing tariffs and restricting technology exports. The investment policy aims to reinforce US strengths in technology and industry as well as national security through capital controls. These policies are characterized by the prioritization of US interests, firmer distinction between allies and adversaries, a generalization of the concept of national security, and intervention via administrative means.

For companies that rely on global supply chains, the uncertainty created by US policies makes it difficult to develop a long-term development strategy. In addition, measures such as arbitrarily imposing tariffs and describing them as “reciprocal” have seriously violated World Trade Oragnization rules and undermined the multilateral trading system set up post-Second World War.

Under the “America First” policies, globalization is being disrupted. The traditional globalization model represented by trade in goods has shown signs of slowing down, and regional and local industrial chain restructuring has been intensifying. However, new forms of trade, such as digital and green trade, are still growing rapidly. Economic globalization has not declined but has been reshaped by digitalization, environmental issues, and inclusiveness.

Although the unilateral policies of the US have caused short-term shocks, they cannot reverse the fundamental demand for cross-border allocation of production factors. In the future, globalization will be multi-centric and multi-dimensional, and the key lies in whether we can reconstruct an inclusive and sustainable global governance system. The experience and practice of emerging economies such as China may provide vital momentum for this process in areas such as regional cooperation, digital governance, and artificial intelligence.

(The author is a professor and dean of the School of Trade Negotiations, Shanghai University of International Business and Economics.)

Editor: Tom Litting