2017 - The Year of the Trump Card on Trade

This week global decision makers are meeting for the 2017 World Economic Forum in Davos, Switzerland. The post-Cold War global institutional order arguably faces its most serious challenge with the election of Donald Trump, Brexit, looming elections in Italy and France, the European migrant crisis and worsening economic equality.

Donald Trump's pre-inauguration threat of imposing a 35 percent tax on the US import of luxury German cars just days before Davos epitomizes the fundamental discord between populist and globalist value systems.

However, the likelihood that Trump will successfully pass legislation that imposes new tariffs on European exports to the United States is unlikely given that the majority of Republicans in Congress are pro-free trade.

This institutional opposition to his populist and local mandate means that other more radical strategies could be pursued by the incoming administration.

President-elect Trump does have the constitutionally mandated power to withdraw from treaties without congressional input. There is recent precedence with President George W. Bush's unilateral withdraw from the Anti-Ballistic Missile Treaty in June 2002.

The post-WWII international framework in trade and politics was largely established by the international treaty system and there is very little to stop the incoming Presidential administration to simply pick-up and leave where it chooses to do so. Indeed, trade agreements such as NAFTA could very face a Trump chopping block. Alternatively, Trump could use this threat as a bargaining chip to force congress to impose modest tariffs against countries instead of an executive forced total withdraw.

It is going to be an interesting year. In particular, the future appointment of a new Justice to the US Supreme Court could be very influential in determining the future interpretation of the separation of legislative and executive powers.

A Trump appointment not surprisingly may be distinct in their support for the expansion of executive purview, something that contrasts deeply with Republican lawmakers' policy over the last 30 years.