The sixteen national security strategies issued by presidents Ronald Reagan to Barack Obama reaffirmed U.S. leadership of a liberal international order, even as they acknowledged it enabled the rise of others and eroded U.S. economic dominance. President Donald Trump may decide that is no longer tenable. His forthcoming national security strategy will be closely scrutinized to understand what “America First” means for the U.S. role in the world and whether it represents a shift toward a narrower, neo-mercantile approach. 

A Potential Historic Turning Point

  • Historically, discussion of mercantilism has resurfaced in moments of upheaval, when accepted ideas on the relationship between politics and economics are thrown into question. 
  • In response to a financial crisis and structural shifts in the global economy, Obama pursued a strategic rebalance that sought to wind down major ground wars, increase investments in long-term U.S. competitiveness in an open-trading system, and strengthen U.S. partnerships in emerging centers of global economic growth.
  • Like previous presidents, Obama rejected nationalism and protectionism, concluding that the absolute benefits from supporting allies and globalization far outweighed the costs and risks.
  • The Trump administration has sent mixed messages about its strategy—at times signaling a neo-mercantile, transactional vision for the United States’ alliances and role.

Key Issues to Note in Trump’s Strategy

Does it acknowledge the limits of protectionism? Previous administrations did not do enough to assist Americans losing out from globalization. Protectionist measures could aid certain struggling industries, but if reciprocated, they could have significant negative consequences, especially for U.S. businesses and consumers benefiting from an open, global economy. Further, trade is not the only culprit. Myriad factors—from technology to underinvestment in education and job training—have contributed to job losses and stagnant wages.

Does it view trade in both strategic and economic terms? Trade has been a central pillar in U.S. strategy—not only to buttress economic growth but also to build partnerships with states with shared interests and values. If the alliance system weakens due to heightened friction over trade, it could undermine U.S. political and security interests.

How does it propose to avoid the increased threat of war that characterized the mercantile period? U.S. administrations since 1945 have recognized the value of international institutions and conventions that provide a framework for nations to compete, cooperate, and resolve differences peacefully. Absent U.S. leadership and support, this framework will weaken and the risk of interstate conflict will rise.

Introduction

Salman Ahmed is a senior fellow at the Carnegie Endowment for International Peace, where he focuses on the future of U.S. national security strategy and its role in promoting national economic interests.
Salman Ahmed

Senior Fellow
Geoeconomics and Strategy Program

The preparation of a national security strategy provides U.S. presidents and their administrations an opportunity to explain how they see the country’s place and role in the world. As the global environment evolves, it is natural for strategies to evolve accordingly. However, in the sixteen national security strategies submitted to Congress by presidents Ronald Reagan to Barack Obama, pursuant to the Goldwater-Nichols Act of 1986, certain core beliefs have largely held constant. Each president has used the national security strategy to reaffirm a central principle: that the United States should employ its unrivaled power to defend and advance a liberal international order based on strong alliances in Europe and Asia, open markets, and the promotion of democracy. In this respect, they have demonstrated remarkable continuity. It is not yet clear whether President Donald Trump will follow suit, but we may soon find out.

Trump’s administration is now preparing the seventeenth national security strategy. It is likely to be the most widely read and closely scrutinized in many years, both in the United States and abroad.

Trump’s administration is now preparing the seventeenth national security strategy. It is likely to be the most widely read and closely scrutinized in many years, both in the United States and abroad. The exercise is being overseen by the national security adviser, H. R. McMaster, a well-respected military strategic thinker. They face a daunting task.

In addition to overcoming legitimate confusion and skepticism about the purpose and value of the national security strategy, they will need to address prevailing questions about Trump’s America First vision. What does it mean, in practical terms, for the conduct of U.S. foreign, defense, and international economic policy? How will the strategy adapt or rework the seventy-year-old, bipartisan consensus that U.S. interests are best secured by upholding a liberal international order? Is America First compatible with the principles of leadership and mutual benefit that have permeated every national security strategy since the first one issued by Reagan in 1987? Or does America First really mean “America Only” and therefore represent a more fundamental tilt toward a zero-sum vision of relations among nations?

In their Wall Street Journal op-ed of May 30, 2017, McMaster and the director of the National Economic Council, Gary Cohn, offered a preliminary answer, indicating that “America First does not mean America alone” and proclaiming that “strong alliances and economically thriving partners” are a “vital American interest.”1 They elaborated in their New York Times op-ed of July 13, 2017, that “America First is grounded in American values—values that not only strengthen America but also drive progress throughout the world.”2 They reaffirmed that “America champions the dignity of every person, affirms the equality of women, celebrates innovation, protects freedom of speech and of religion, and supports free and fair markets.”3 These statements bear striking similarity to those found in the previous sixteen national security strategies. 

Alexander Bick
Alexander Bick
Alexander Bick is the associate director and a fellow at the Henry A. Kissinger Center for Global Affairs at Johns Hopkins School of Advanced International Studies.

Yet one sentence in McMaster and Cohn’s Wall Street Journal op-ed has commanded the most attention: “the world is not a ‘global community’ but an arena where nations, nongovernmental actors, and businesses engage and compete for advantage.” Speaking in Warsaw, Poland, on July 6, 2017, Trump referred on several occasions to the “community of nations.”4 But against the backdrop of what he has said and tweeted about the need for the United States to take a more assertive approach to protecting its own interests, and about the doubtful value to the United States of many traditional U.S. alliances and trade agreements, some have pounced on this Hobbesian portrait of the international system as confirmation that Trump aims to break sharply with his predecessors and resurrect a kind of political and economic nationalism from an earlier era—mercantilism.

Mercantilism has become a meme in covering Trump. A simple Google search for “Trump” and “mercantilism” produces thousands of hits, in publications ranging from obscure financial blogs to the pinnacles of the mainstream media.

Mercantilism has become a meme in covering Trump. A simple Google search for “Trump” and “mercantilism” produces thousands of hits, in publications ranging from obscure financial blogs to the pinnacles of the mainstream media. “Mr. Trump is bringing mercantilism back,” observed Binyamin Appelbaum in the New York Times, “challenging the last 200 years of economic orthodoxy that trade among nations is good, and that more is better.”5 “The benighted mercantilist policies reflected in slogans such as ‘America First’ . . . will be disastrous,” warns the economic historian Joel Mokyr.6 Trump has “expressed a mercantilist view of foreign policy. . . . in which countries took resources and constructed security arrangements that focused only on the direct immediate benefit to themselves,” wrote Charles Szrom.7 Looking at the composition of Trump’s cabinet, Dan Kopf writes in the online magazine Quartz that “Trump’s administration is packed with mercantilists.”8 These examples could be multiplied with ease.

With the continuing high degree of uncertainty over the relationship between presidential rhetoric and policy action, it is still too early to clearly characterize Trump’s strategic approach, whether in mercantilist terms or otherwise. And it is not just about Trump. Historically, interest in mercantilism has tended to resurface in moments of profound upheaval, when accepted ideas on the relationship between politics and economics are thrown into question.9 The great studies of the subject were penned in Germany during the period of rapid industrialization and urbanization following unification in 1871 and in the years after the Great Depression of the 1930s. And mercantile ideas found a new audience during the 1970s, when president Richard Nixon took the United States off the gold standard, the Organization of the Petroleum Exporting Countries succeeded in significantly increasing oil prices, and the world fell into recession for the first time in more than forty years.10

It is unsurprising, therefore, that discussion of mercantilism has reappeared today, as the United States struggles to (1) come to terms with the underlying causes and consequences of the 2008 financial crisis, (2) restore higher and more inclusive economic growth, (3) address a multitude of new challenges in labor markets due to rapid changes in technology and globalization, and (4) contend with the rise of China and the success of its alternative model of state capitalism—a model that has generated more than three decades of sustained economic growth.

Historically, interest in mercantilism has tended to resurface in moments of profound upheaval, when accepted ideas on the relationship between politics and economics are thrown into question.

As the moment and the man now occupying the White House thrust the term back into the public discourse, it is useful to refresh our understanding of mercantilism and situate some of the strategic choices now confronting the Trump administration within a longer historical debate. U.S. presidents have faced similar choices in the last sixteen national security strategies, and each time, to a certain degree, Republican and Democratic administrations alike rejected unbridled nationalism, protectionism, and a zero-sum conception of international trade. They did so knowing that while the United States remained the world’s preeminent economic and military power, over time its relative strength was declining. In his two national security strategies, Obama likewise rejected that course, reaffirming that U.S. leadership and sustainment of the liberal international order best served long-term U.S. interests. But he also concluded that a significant strategic rebalance in the ways and means the United States engaged in the world was required for it to both compete and cooperate more effectively with other nations.

The Trump team faces the same fundamental challenge. It could use its forthcoming strategy to reaffirm the U.S.-led international order, while offering different ways and means to enhance the position of the United States within it; or it could abandon this order in favor of pursuing U.S. interests defined in far more narrow, neo-mercantile terms. How the team answers a few key questions in that document will offer important clues as to the choice they are making.

What Is Mercantilism?

Given its frequent invocation over the past year, it is fair to ask: what is mercantilism? The answer is more complicated than one might think. To begin with, no one consciously set out to define or pursue policies under the name mercantilism. Rather, the term has become shorthand for describing a common set of practices and policies that evolved in Europe between the fifteenth and eighteenth centuries, as the very notion of the nation state was taking hold and long-distance maritime trade between Europe and Africa, Asia, and the Americas was rapidly accelerating. In navigating these fundamental transformations, leading merchants and statesmen departed from classical and medieval ideas to radically reconceive the relationship between wealth and power. Although there was considerable disagreement among individual mercantilists on matters of policy, they shared a basic project: to organize all instruments of state power to expand trade and industry, more effectively compete with foreign rivals, and enable their sovereigns to amass the resources required for war.

The term mercantilism was used for the first time in the 1750s, when French physiocrat Victor de Riqueti, Marquis de Mirabeau, derided what he called the “mercantile system.” Twenty years later, Adam Smith carried Mirabeau’s critique further, devoting nearly a quarter of his Inquiry into the Nature and Causes of the Wealth of Nations (hereafter The Wealth of Nations) to a systematic analysis of the limitations and failures of mercantile policy. From the beginning, mercantilism was a creation of its critics.

In the current context, the most salient features of mercantilism include a rejection of communitarian arguments in favor of explicit political and economic nationalism; a zero-sum conception of the benefits to individual states from international trade; and, at least partly as a consequence of these features, frequent and intense intra-European conflict.

In orientation, mercantilism was fundamentally nationalist.11 Its authors implicitly refused to be guided by rules and dictates set by those beyond their borders—whether other states or the church and the Holy Roman Empire, which in theory at least claimed dominion over all of Christendom. Instead, they addressed their proposals to monarchs and parliaments within the confines of the newly forming national borders. At the same time, within those borders, mercantilists sought to strengthen the state against internal rivals such as the nobility, guilds, and other actors. To be clear, this was not the nineteenth-century nationalism of blood and soil. While stereotypes of national character appear frequently in mercantile texts, the focus was squarely on strengthening the state as an institution. In this way, mercantilists made a central contribution to the erosion of inherited norms of Christian virtue and community that governed the political conduct of princes and replaced them with arguments based on raison d’état—arguments suited to a system of sovereign states self-consciously pursuing their own interests in rivalry with one another.12

In orientation, mercantilism was fundamentally nationalist. Its authors implicitly refused to be guided by rules and dictates set by those beyond their borders.

Power and plenty, as the economist and historian Jacob Viner explained, were the twin goals of mercantile policy. Mercantilists “sought enough superiority of power to ‘give the law’ to other countries, to enable conquest of adjoining territory or overseas colonies, or to defeat their enemies in war. It was general doctrine that strength was necessary as a means of protecting wealth and of augmenting it, while wealth was a strategic resource necessary to produce strength and to support its exercise.”13 The classic example of this interdependence of wealth and power is provided by Jean-Baptiste Colbert, first minister to Louis XIV of France. Colbert undertook literally dozens of projects to increase the prosperity of the kingdom, using the power of the crown to nurture French industry, encourage the construction of public works, attract skilled artisans from abroad, and open new markets to French overseas trade. This wealth, in turn, was made available when necessary to enhance the prestige and power of the king. “Trade is the source of finance,” Colbert famously wrote, “and finance is the vital nerve of war.”14

To the modern reader, the intimate link drawn here between money and power is entirely familiar. But in Colbert’s time, it was radically new—a consequence of the increasing importance of commerce to the successful conduct of statecraft. In medieval Europe, trade and industry were primarily a matter for the towns and cities—pursuits appropriate to the merchant but well beneath the status and majesty of a king. By the late seventeenth century, a ruler who neglected to cultivate trade and industry risked forfeiting a leading role in European politics.15 Contemporary anxieties about the United States’ ability to compete with China and the potential consequences for international politics are the modern expression of this challenge. Economic statecraft—meaning both the use of economic tools to achieve diplomatic ends and the use of diplomatic and military tools to advance economic objectives—is an inheritance from mercantilism.16

With few exceptions, mercantilists believed that international trade was zero-sum—at least in terms of the consequences for each individual state.

That does not mean, of course, that mercantilists conceived of trade in exactly the way that most economists do today. With few exceptions, mercantilists believed that international trade was zero-sum—at least in terms of the consequences for each individual state. Gains by one necessarily meant losses for another. In the extreme, this logic led some mercantilists to conclude that famine or pestilence in a rival state increased wealth at home. But in general, it manifested in a fixation with maintaining a favorable balance of trade. By ensuring that exports exceeded imports, the reasoning went, the state was guaranteed a steady income in precious metals, a critical resource for outfitting armies and navies, procuring military supplies, hiring mercenaries, and providing subsidies to allies in wartime. States employed numerous means to ensure a favorable balance of trade, including inducements or regulations designed to promote domestic manufacturing in specific sectors, tariffs, or other restrictions on the import of foreign goods, and in some cases, even legal prohibitions on making overseas payments in gold and silver.17

For Adam Smith, such measures made little sense: wealth consisted not in gold or silver but in the commodities that those metals could be used to buy. The balance of trade, from this perspective, was irrelevant, so long as trade allowed each country to benefit from its unique comparative advantage and increase its access to goods—and thus its wealth.

But mercantilists were less sanguine. They recognized that possession of precious metals was critical to the European balance of power. The discovery by Spain in the early sixteenth century of rich mines in the New World provided the Habsburg monarchs with a significant advantage over rival states—especially China, where European trade was conducted almost exclusively in silver until well into the eighteenth century.18 More generally, the combination of intra-European religious and dynastic conflicts with intense competition to secure markets and territory outside Europe sharply elevated the appeal of zero-sum arguments. Control over trade with Africa and Asia, for example, was the primary cause of three Anglo-Dutch wars in the mid-seventeenth century—wars that ultimately signaled the decline of Dutch commercial hegemony and its replacement by England as the preeminent naval power. More generally, European rulers were largely content to accept a state of near-constant warfare among their subjects “beyond the line,” at least until the 1640s.19 And for far longer, European wars spilled into the colonies or, conversely, originated in the colonies and spilled into Europe, as was the case with the Seven Years’ War between France and England in the mid-eighteenth century.

The tight analogy between the balance of trade and the balance of power that mercantilists drew contributed to a bellicose approach to foreign policy and to the frequency and intensity of warfare during the mercantile period.

The tight analogy between the balance of trade and the balance of power that mercantilists drew contributed to a bellicose approach to foreign policy and to the frequency and intensity of warfare during the mercantile period. Later writers would reject this analogy, arguing instead that the mutual benefits from trade made commerce an alternative to conquest or war.20

The Liberal Critique

Mercantilism was at once too ingrained and too diffuse to simply vanish, but by the end of the eighteenth century, its core principles were under sustained attack. By the third decade of the nineteenth century, mercantile policies were being replaced across Europe by an entirely different conception of political economy—liberalism. This transformation was solidified by the rise of Britain as the world’s dominant industrial, commercial, and financial power.

The most comprehensive assault on mercantilism was Adam Smith’s. In The Wealth of Nations, Smith explained how exchange between private individuals seeking to fulfill their own self-interest could, by an “invisible hand,” lead to benefits shared by society as a whole. What was true for the individual was also true for commerce between nations: through free exchange, each nation could find buyers for the surplus of its industries and ready access to goods unavailable at home or produced more cheaply abroad. While Smith recognized that the importation of foreign goods might harm a specific industry, he argued that the negative impact was more than compensated by the increase in overall wealth from trade. Rather than attempt to regulate this exchange, it was the responsibility of statesmen to create the most favorable conditions for it to flourish and to leave questions of trade to the merchants who understood them best.

Few, if any, of these ideas were entirely original.21 In the 1590s, at the peak of the first global empire built by Philip II of Spain, the lapsed Jesuit Giovanni Botero speculated that God created the seas to allow men to exchange with one another, to the benefit of all. The Dutch cloth manufacturer Pieter de la Court argued in the 1660s that state monopolies, by reducing the volume of trade, inhibited the accumulation of wealth. In the 1750s, Baron de Montesquieu explored in The Spirit of Laws how harmony could result from a balance of competing interests and how commerce could create bonds between potential adversaries. And Smith’s mentor, David Hume, attacked what he called the “jealousy of trade,” a common (but in his view unfounded) belief that one nation could flourish only at the expense of another:

Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expense. In opposition to this narrow and malignant opinion, I will venture to assert that the increase of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbours; and that a state can scarcely carry its trade and industry very far, where all the surrounding states are buried in ignorance, sloth, and barbarism.22

Smith’s synthesis placed enlightened self-interest at the center of political economy. If trade was positive-sum, the objective of statecraft was not to diminish the wealth of rivals but to foster economic liberty and commerce among nations to the benefit of all. His internationalism was not blind to power politics: Smith was clear on the state’s responsibility for national defense and readily accepted that trade in certain items related to military purposes should be restricted. But he decidedly tilted the balance from power to plenty. To the extent the state interfered in normal trade, it did so to its own detriment. Instead, the state’s role should be to administer justice, erect public works and public institutions (among which Smith included public education), and establish an environment conducive to commerce. These ideas have been greatly elaborated and formalized since Smith’s time, but they remain to this day the core of liberal thought and the substance of economics textbooks read by millions of students worldwide.

Smith’s synthesis placed enlightened selfinterest at the center of political economy. If trade was positive-sum, the objective of statecraft was not to diminish the wealth of rivals but to foster economic liberty and commerce among nations to the benefit of all.

That Smith’s ideas gained such currency is largely a consequence of Britain’s meteoric rise in the nineteenth century. As Smith was composing The Wealth of Nations, the Industrial Revolution was already gaining momentum all around him, though he never gave it a name. Its transformation of British society is visible in his illustration of the pin factory where, by the division of labor, ten men could produce 48,000 pins in a day, when a generation earlier, working alone, each man could produce in a day no more than twenty.23 These explosive gains in productivity were augmented by the widespread introduction of steam power in the 1780s. Britain’s dominance of the seas, its growing financial might, and the tremendous wealth flowing from its colonies established it as the first genuine global power.

With its significant edge in manufacturing and its global reach, no one benefitted from this opening of trade more than Britain. Beginning in the 1820s, Britain and then other European states began reducing duties and other barriers to trade. The Cobden-Chevalier Treaty of 1860 eliminated virtually all trade barriers between England and France, leading to a golden age of free trade that lasted until the late 1870s. At the same time, Britain’s defense expenditures were reduced to between 2 and 3 percent of its gross national product.24 Britain sought to maintain a balance of power in continental Europe but largely abstained from military intervention there, instead employing force primarily to open trade to new areas and preserve its access to existing markets, notably in Africa, China, India, and Latin America. London’s sophisticated financial institutions provided both liquidity and stability that facilitated the rapid expansion of international trade.

The United States was slow to embrace trade liberalization, and when it did so, the benefits were viewed largely through the prism of geopolitical competition with the Soviet Union.

There were of course limits to Britain’s influence; it could not, for example, compel the United States to abandon the protectionist policies it maintained throughout the nineteenth century.25 And there is a far darker story of coercion, exploitation, and social and economic dislocation on a vast scale that was a direct consequence of British colonial policy. But Britain’s vision for the international order—for a Pax Britannica—explicitly rejected mercantile competition in favor of a model of interstate harmony built and sustained by increasing material prosperity.

National Security Strategies From Ronald Reagan to George W. Bush

The United States inherited the mantle of British global hegemony, reluctantly, at the end of the First World War and ultimately embraced it after 1945. The transition between hegemons was perhaps uniquely cooperative and nonviolent, but it did not result in a simple continuation of the British liberal tradition.26 The reality is more complicated. The United States was slow to embrace trade liberalization, and when it did so, the benefits were viewed largely through the prism of geopolitical competition with the Soviet Union. Once the Cold War ended, the United States embraced trade liberalization afresh, leading to a rapid acceleration of global trade and financial flows. The new U.S.-led liberal order would bring enormous benefits in terms of increasing absolute wealth at home and abroad, but it also increased the U.S. economy’s exposure to foreign competition and contributed to a gradual erosion of its relative economic dominance.

The United States was staunchly protectionist throughout the nineteenth century and in the years leading up to the First World War. Tariffs were further increased during the interwar period, culminating in the Smoot-Hawley Tariff Act in 1930 and reciprocal policies across Europe that accelerated and deepened the consequences of the Great Depression. Trade liberalization began in earnest only after the Second World War, with the General Agreement on Tariffs and Trade signed by twenty-three nations in Geneva in 1947.27 Even after the United States became the champion of free trade abroad, it contended with the periodic resurgence of protectionist impulses at home. For example, as trade surpluses with Japan and other countries turned to deficits in the 1970s and 1980s, U.S. trade policy reflected increasing domestic sensitivity to perceptions of unfair foreign trading practices.28 This led at times to restricting imports, from steel and automobiles to textiles and televisions.

But U.S. trade policy cannot be understood in isolation from broader concerns about national security. In the wake of the Second World War, U.S. strategy was motivated primarily by the challenge of containing Soviet expansion. Then president Harry Truman employed a combination of policies designed to resuscitate Western Europe and Japan, integrate both into an international economic order led by the United States, and create multilateral institutions that advanced U.S. interests. Diplomatic and military competition with Russia went hand in hand with an expanding commitment to the security and economic development of states outside the Russian orbit. In this context, the immediate economic benefits of trade liberalization were subordinate to the need to engage and bind allies within a shared economic system; naturally, the Soviet Union and its client states were excluded from this system.

Once the Cold War ended, the United States embraced trade liberalization afresh, leading to a rapid acceleration of global trade and financial flows.

At the same time, the United States permitted restrictive trade policies by the European Economic Community and Japan and provided unprecedented levels of economic assistance through the Marshall Plan to revitalize industries destroyed during the war. These policies laid the foundation for a U.S.-led international order, based on free and open trade that has greatly benefited the United States—even if it has helped spur the economic growth of U.S. competitors, notably Germany and Japan.

This strategic orientation is reflected with remarkable consistency in the sixteen national security strategies prepared by Republican and Democratic administrations since 1987, when Congress legislated their annual submission, concurrent with the president’s budget request.29 The format and content of these strategies has varied considerably over time, based on presidential world views, risk tolerance and temperament, political ideology, and the moments in which they were prepared—from former president George H. W. Bush’s efforts to articulate a new role for the United States after the fall of the Berlin Wall to his son’s preparations, following the September 11, 2001, attacks, to invade Iraq. But on the fundamentals, there has been broad agreement. All the administrations’ strategies unabashedly and unequivocally stated that everything the United States does in the world should advance U.S. national interests: to keep Americans physically safe, make them economically prosperous, and defend their rights and way of life. The strategies all stressed the importance of building and sustaining the underlying sources of the United States’ strength and global influence, including its unrivaled military and economic power, healthy alliances, and the power of its example. And they all stressed that the success of this approach depends on sustaining an international system of trade and economic interdependence that benefits all.

The U.S. national security strategies all stressed the importance of building and sustaining the underlying sources of the United States’ strength and global influence, including its unrivaled military and economic power, healthy alliances, and the power of its example.

Reagan’s second strategy aggressively asserted that “an open world of enterprise and the free movement of people, goods, and ideas are not only the keys to our prosperity, but basic moral principles. We see an expanding global prosperity as enhancing our own.”30 At the same time, Reagan acknowledged that U.S. investment in other nation’s fortunes had already eroded the United States’ relative economic dominance vis-à-vis Western Europe and East Asia and would likely do so in time with respect to further growth in East Asia’s industrial economies, particularly that of China’s. But he defended this approach, believing that increasing global trade would underpin the United States’ security and economic interests just as it had done after the Second World War. He implored against “letting tensions and disputes over trade issues undermine domestic support for free trade, or become a catalyst for policies which only serve to reduce overall economic growth, and thus work in opposition to our security objectives.”31

George H. W. Bush doubled down on the same themes even after the Cold War had ended. He sought to integrate Russia and Eastern Europe into the U.S.-led global order, while reaffirming that “provided that the world economic system remains an open and expanding one, we ourselves will benefit from the growth of others.”32

Yet as he was calling for U.S. leadership to expand an open international trading system, Bush had to contend with escalating domestic anxiety over rising trade deficits with Germany and Japan. He therefore stressed in his 1990 national security strategy that the “key to reducing the deficit” was not to impose protectionist measures but instead to “increase domestic saving, thus closing the savings-investment gap and reducing import demand.”33 He saw a necessity in addressing “the domestic causes for the trade deficit,” while still ensuring that “market forces are free to operate at home and abroad, and that trade expands—rather than closing our markets.”34 The “strategic importance of unity among the industrial democracies,” he added, made it “essential that trade disputes be resolved equitably, without tearing the fabric of vital political and security partnerships.”35 He argued for managing these economic frictions wisely, especially as the United States concurrently grappled with the following question: “How do we maintain the cohesion among allies and friends that remains indispensable to common security and prosperity, as the perceived threat of a common danger weakens?”36

Bush answered this question in part by rallying allies and friends worldwide to oppose and repel former Iraqi president Saddam Hussein’s invasion of Kuwait—a decisive global response that he explained in the 1991 national security strategy offered a potential model and hope for a “New World Order.” This required avoiding the path taken in the aftermath of the First World War, when the nation had turned inward, with disastrous consequences for international security. “At a time when the world is far more interdependent—economically, technologically, environmentally—any attempt to isolate ourselves militarily and politically would be folly.”37 The antidote was to further invest in U.S. alliances, strengthen and enlarge “the commonwealth of free nations that share a commitment to democracy and individual rights,” deepen the U.S. commitment to international institutions like the United Nations, and support “Western Europe’s historic march toward greater economic and political unity” within the broader North Atlantic Alliance.38

An open global economy not only benefits allies, and by extension the United States’ economic growth and security, but potentially also benefits those who are not allies and could challenge U.S. leadership in the future.

Former president Bill Clinton built on this approach, placing even greater emphasis on enlarging the community of market democracies based on the understanding that “the more that democracy and political economic liberalization take hold in the world, particularly in countries of geostrategic importance to us, the safer our nation is likely to be and the more our people are likely to prosper.”39 He had in mind, first and foremost, drawing the former Warsaw Pact countries into this community. But, like his predecessors, he also envisaged increasing economic growth in the developing world and in turn expanding demand for U.S. exports, among other benefits.

With respect to Asia, Clinton asserted that growth “can and will benefit our nation” because “much of what Asia needs to continue its growth are goods and services in which we are strong.”40 But he cautioned that, “given its growing economic potential and already sizable military force, it is essential that China not become a security threat to the region.”41 Here Clinton mentioned in passing a U.S. national security dilemma that would grow in prominence. An open global economy not only benefits allies, and by extension the United States’ economic growth and security, but potentially also benefits those who are not allies and could challenge U.S. leadership in the future.

In writing his final national security strategies several years later, Clinton argued for striking a balance with respect to Russia and China. He called for being “mindful of threats to peace while also maximizing chances that both Russia and China move toward greater internal openness, stability and prosperity, seizing on the desire of both countries to participate in the global economy and global institutions, insisting that both accept the obligations as well as the benefits of integration.”42 He called for “holding Chinese leaders to the conditions of entry into the WTO [World Trade Organization], which offer the best hope of internal reform.”43 And he remained steadfast in the belief that “bringing the PRC [People’s Republic of China] more fully into the global trading system is manifestly in our national interest” because it is a “major potential market for our goods and services,” and into the next century, “hundreds of thousands of jobs across our country” would result from increased trade with it.44 He therefore argued that “we must continue our normal trade relationship with China, as every President has done since 1980, to strengthen our economic relationship.”45 By the time Clinton left office in 2001, the country was experiencing what his last national security strategy touted as “the longest U.S. economic expansion in history.”46

The terrorist attacks against the United States on September 11, 2001, could have narrowed the country’s immediate security interests, but they did not. To the contrary, the first national security strategy issued in 2002 by then president George W. Bush argued that the United States should employ all instruments of its power and influence to “create a balance of power that favors human freedom: conditions in which all nations and all societies can choose for themselves the rewards and challenges of political and economic liberty.”47 This strategy is most remembered for its chapter on weapons of mass destruction and the case for preemptive war that laid the ground for the invasion of Iraq, but also noteworthy was the argument that the promotion of political and economic freedom was central to defeating terrorism in the long term.

Bush saw democracy, the rule of law, freedom of speech, independent media, the marketplace of ideas, and respect for human dignity—all hallmarks of the liberal international order—as the necessary antidotes to political alienation and grievances, propaganda and misinformation, and hateful ideologies that created the context for terrorism to flourish. It was therefore manifestly in the United States’ interests to use the instruments of U.S. power and influence to promote these freedoms abroad. In his view, the September 11 attacks taught “that weak states, like Afghanistan, can pose as great a danger to our national interests as strong states.”48

Bush supported bringing Russia into the WTO and deepening the United States’ economic relationship with China, whose entry in the WTO would “create more export opportunities and ultimately more jobs for American farmers, workers, and companies.”

With respect to trade, Bush supported bringing Russia into the WTO and deepening the United States’ economic relationship with China, whose entry in the WTO would “create more export opportunities and ultimately more jobs for American farmers, workers, and companies.”49 To offset concerns about unfair trading practices, Bush called for greater vigilance to address government subsidies and dumping and to protect intellectual property. He also pledged to help domestic industries and workers adjust to the new global trading environment, particularly in the agricultural sector and U.S. steel industry, through trade adjustment assistance. And he committed to incorporate labor and environmental concerns into U.S. trade negotiations to create “a healthy ‘network’ between multilateral environmental agreements with the WTO, and use the International Labor Organization, trade preference programs, and trade talks to improve working conditions in conjunction with freer trade.”50

In the 2006 strategy, Bush expanded on these themes, calling on China, in its new role as a major global player, to be a “responsible stakeholder” that “fulfills its obligations and works with the United States and others to advance the international system that has enabled its success.”51 And he called out China to take specific steps toward that end, including relying more on domestic demand and less on global trade imbalances to drive its economic growth; continuing down the road of reform and openness; being more transparent in how it was using its new found wealth to expand its military; and refraining from trying to “‘lock up’ energy supplies around the world” or seeking to “direct markets rather than opening them up—as if they can follow a mercantilism borrowed from a discredited era.”52

Obama’s Strategic Rebalance

As Obama formulated his first national security strategy, the country no longer faced a single, overriding threat, as it did during the Cold War or following the September 2001 attacks. And it no longer enjoyed the freedom of action and economic prosperity it possessed in the 1990s. It was therefore a natural moment for Obama to revisit conventional wisdom and elements of the approach that had held constant in prior periods. In many ways, a similar situation persists today for Trump. This makes comparisons between the two presidents all the more enticing, but it also makes having a clearer understanding of Obama’s strategic approach vitally important.

In the absence of Obama providing a simple slogan or bumper sticker for his foreign policy, critics tried to label it themselves by pulling the phrase “strategic patience” out of context from the 2015 national security strategy.53 But those words described only some aspects of his strategy for dealing with a specific set of challenges. If one were to assign a slogan to capture the entirety of Obama’s approach, “strategic rebalance” would be more apt.

If one were to assign a slogan to capture the entirety of Obama’s approach, “strategic rebalance” would be more apt.

Obama’s first national security strategy, issued in 2010, reflected the same belief as his predecessors in the benefits of an open international trading system and the indispensability of U.S. global leadership for upholding international order.54 But he was aware of the need for adjustments to make this system yield more concrete gains for U.S. workers (for example, by modernizing the North American Free Trade Agreement, elevating labor and environmental standards in free trade agreements, and pressing China to take the various measures and reforms highlighted by Bush).55 And he was measured in his commitments of U.S. power to uphold and transform the international order, owing to near-term preoccupation with the 2008 financial and economic crisis, ongoing U.S. commitment and expenditures in Iraq and Afghanistan, and a growing awareness of longer-term structural shifts unfolding in the global economic and political landscape.

The National Intelligence Council’s 2008 report, Global Trends 2025: A Transformed World, provides a vivid illustration of how these structural shifts were described at the time. It began with a jarring assessment: “the international system—as constructed following the Second World War—will be almost unrecognizable by 2025 owing to the rise of emerging powers, a globalizing economy, an historic transfer of relative wealth and economic power from West to East and the growing influence of nonstate actors.”56

The report forecasted that aging populations in the developed world; growing energy, food, and water constraints; and worries about climate change would limit and diminish what would still be a historically unprecedented age of prosperity. The report went on to explain how this growth in absolute global wealth would likely be accompanied by major shifts in the relative power and wealth of nations. Even though the United States was expected to remain the most powerful country on earth, it would face a relative decline in leverage and strength, including in the military realm.

The report described the potential arrival by 2025 of a multipolar global order fraught with risks, including strategic rivalries revolving around trade, investment, and technological innovation and acquisition. It assessed that China was poised to have “more impact on the world over the next 20 years than any other country,” and, if current trends persisted, to have by 2025 the world’s second-largest economy and to be a leading military power, the largest importer of natural resources, and the biggest polluter.57 It added that China, a rising India, and a resurgent Russia (due to rising oil prices) were pursuing a model of state capitalism to power their growth.58 This involved far greater state intervention and direction of markets and industries. Even some U.S. allies and partners (for example, South Korea, Taiwan, and Singapore) were using variants of state capitalism to develop their economies. The report’s authors noted as one of the open questions “whether mercantilism stages a comeback and global markets recede” and whether, as a result, this would lead to “descending into a world of resource nationalism” and in turn increasing “the risk of great power confrontations.”59

Against this backdrop, Obama put forward a strategy that reaffirmed the United States’ core national interests in terms similar to Reagan’s: “the security of the United States, its citizens, and U.S. allies and partners; a strong, innovative, and growing U.S. economy in an open international economic system that promotes opportunity and prosperity; respect for universal values at home and around the world; and an international order advanced by U.S. leadership that promotes peace, security, and opportunity through stronger cooperation to meet global challenges.”60 But unlike in the time of Reagan, this was not a bipolar moment. And unlike in the time of George H. W. Bush and Clinton, the United States’ economic dominance over all others was not nearly as pronounced. To the contrary, faith in the U.S. “model” itself had been deeply shaken and undermined by the 2008 financial crisis, juxtaposed against China’s rapid ascent on the wings of its model of state capitalism.

To maintain commitment to the same ends the United States had pursued since 1945, while recognizing relatively fewer means at its disposal, Obama presented a strategy that altered the ways in which the United States would advance its interests in this rapidly evolving world. This entailed strategic rebalancing on several fronts.

Obama presented a strategy that altered the ways in which the United States would advance its interests in this rapidly evolving world. This entailed strategic rebalancing on several fronts.

First and foremost, he pressed for the U.S. government to spend more time, attention, and resources on building at home and less on costly foreign military interventions, where avoidable.61 The United States could not be strong abroad if it was not strong at home. That required increased investment in national competitiveness, resilience, and the power of its moral example, he argued. To enhance national competitiveness, Obama stressed the importance of providing high-quality education for young Americans, enhancing science and innovation, transforming the energy economy “to power new jobs and industries,” “lowering the cost of health care for our people and businesses,” and “reducing the Federal deficit.”62 To enhance national resilience, he called for “rebuilding an infrastructure that will be more secure and reliable in the face of terrorist threats and natural disasters,” focusing on education and science to “ensure that the breakthroughs of tomorrow take place in the United States,” and developing new sources of energy to reduce dependence on foreign oil.63

To fund these objectives and remain committed to reducing the federal deficit, the United States would need to make hard choices and avoid overreaching. These hard choices would ultimately include winding down major ground wars (including in Afghanistan after an initial surge), avoiding getting into new ones, and balancing increased defense and nondefense discretionary spending.

To strengthen its moral example, Obama prohibited torture “without exception or equivocation.”64 He pledged to increase attention to the legal aspects of countering terrorism and to balance “the imperatives of secrecy and transparency” in intelligence activities.65 He stressed giving greater weight to the protection of civil liberties, privacy and oversight, and fidelity to the rule of law, across all national security efforts. And he committed to demonstrating the United States’ unique ability and comparative advantage as a nation to “draw strength from diversity.”66

Second, while he reiterated a commitment to advancing all U.S. interests overseas—security, prosperity, values, and international order—simultaneously and with recognition of their interrelated nature, he nevertheless signaled an increased focus on prosperity. This was natural, as the United States and the world faced the worst economic and financial crisis since the Great Depression. The objectives he set were designed to prevent renewed instability in the global economy; save more and export more; encourage emerging markets abroad to increase domestic demand-driven models of growth; open foreign markets to U.S. products and services; deter threats to the international financial system; and build greater cooperation with international economic partners. Of course, previous administrations had all pursued these objectives, but it was a consuming focus for the Obama administration, in coming to office on the heels of a financial crisis.

Third, he proposed shifting toward even greater multilateral and collective action to tackle global threats and challenges the United States could not or should not counter on its own. This would entail turning to the G20 as the premier forum for international economic cooperation. It envisaged working through the G20 to pursue governance reform at the International Monetary Fund (IMF) and World Bank. Such reform was needed so that “the rapidly growing countries of the world see their representation increase and are willing to invest those institutions with the authority they need to promote the stability and growth of global output and trade.”67 It would mean “strengthening international institutions” more generally and employing U.S. leadership to “galvaniz[e] collective action that can serve common interests such as combating violent extremism; stopping the spread of nuclear weapons and securing nuclear materials; achieving balanced and sustainable economic growth; and forging cooperative solutions to the threat of climate change, armed conflict, and pandemic disease.”68 For this collective action to be effective, the United States would not only need to bolster ties with close friends and allies on all four continents but also “build deeper and more effective partnerships with other key centers of influence—including China, India, and Russia, as well as increasingly influential nations such as Brazil, South Africa, and Indonesia.”69 He added that U.S. cooperation with all these nations was essential, because “power, in an interconnected world, is no longer a zero sum game.”70 To the contrary, he elaborated, “the belief that our own interests are bound to the interests of those beyond our borders will continue to guide our engagement with nations and peoples.”71

Fourth, to advance these interests and objectives, he proposed restoring more balance in the use of U.S. instruments of power. This meant sustaining U.S. military might, but leading and complementing it more often and effectively with strengthened diplomatic, development, law enforcement, and intelligence operations. In September 2010, he issued a Presidential Policy Directive on Global Development that called for the “elevation of development as a core pillar of American power” and envisaged “development, diplomacy and defense to mutually reinforce and complement one another in an integrated comprehensive approach to national security.”72 This conviction informed his administration’s major investments in food security, global health, and pandemic disease prevention and response, including the Ebola crisis.

The Obama administration saw strategic value in locking in rules of the road governing relations among nations at a time when it had the strength to shape their substance.

Obama’s 2015 national security strategy highlighted two additional fronts in the strategic rebalancing effort but also revealed the difficulty of implementing it amid growing challenges to global order.73 First, it reaffirmed the president’s commitment to geographic rebalancing of U.S. presence and engagement in regions of increased global economic growth, starting with Asia and the Pacific. The “Rebalance to Asia and the Pacific” entailed, among other things, modernizing Pacific alliances, deepening new partnerships in Southeast Asia and India, intensifying cooperation and competition with China, and basing the majority of overseas U.S. Navy and Air Force fleets in the Pacific by 2020. It also envisaged concluding the twelve-nation multilateral free trade agreement, the Trans-Pacific Partnership (TPP), that would cover a region representing 40 percent of global trade. The TPP would help cement the rebalance and strengthen ties between the United States and its partners in Asia and the Americas.

Obama saw the United States playing a larger role in shaping the trajectory of the Western Hemisphere, whose burgeoning middle class created new markets and whose favorable energy position diminished dependence on the Middle East. He believed the United States would find it easier to lead in the hemisphere once it normalized relations with Cuba and jettisoned heavy political baggage it had been carrying in the region for some time. The peaceful, diplomatic resolution of the Iranian nuclear issue, meanwhile, could avert another major war and, potentially over time, diminish the need for such a heavy U.S. military presence in the Persian Gulf.

Second, the 2015 strategy elevated the promotion of a “rules-based” international order as a core U.S. national interest. The Obama administration saw strategic value in locking in rules of the road governing relations among nations at a time when it had the strength to shape their substance. In decades hence, the further diffusion of power and China’s rise would make that a far more difficult proposition. Accordingly, the TPP was not just about pursuing near-term economic benefits through lowering tariffs and overcoming trade barriers for U.S. goods and services. It was a strategic play aimed at strengthening the ties among U.S. allies and partners and shaping the rules and standards of the international economic order over the longer term. TPP, together with the Transatlantic Trade and Investment Partnership between the United States and the European Union, if completed, would “pu[t] the United States at the center of a free trade zone covering two-thirds of the global economy.”74

Global crises erupted that required responses running counter to the very shifts Obama was trying to effect.

While China would not be party to TPP at the outset, the door to its eventual admission would remain open, should it meet the requisite standards. At the same time, the United States would work with China, as the world’s two major emitters, to set the global standards for prevention, preparedness, and response to carbon pollution. And, as set forth in the strategy, the Obama administration committed to working with China and other major international players to “promote rules for responsible behavior” in “shared spaces—cyber, space, air, and oceans—that enable the free flow of people, goods, services, and ideas.”75

These are several of the strategic shifts Obama pursued to better position the United States, in his view, to advance its interests and exercise sustained global leadership. But they were not fully implemented or put on solid long-term footing, as bipartisan congressional support could not be secured and realities on the ground intervened. Republicans on Capitol Hill did not support appropriating the amount of funds he sought for rebuilding critical infrastructure at home. They did not act swiftly to enable governance reform of the IMF and World Bank. Nor could they deliver ratification of the TPP in the face of widespread opposition from the Democrats to Obama’s trade agenda. The path to TPP ratification changed dramatically once Trump, who campaigned vigorously against it and multilateral trade agreements more generally, gained the party’s nomination and prevailed in the general election.

Meanwhile, global crises erupted that required responses running counter to the very shifts Obama was trying to effect. The rise of the self-proclaimed Islamic State and diffusion of the terrorist threat from South Asia to the Sahel forced redeployment of military and nonmilitary resources to the wider CENTCOM (U.S. Central Command) area of responsibility. Russian aggression in Ukraine made clear that a Europe whole, free, and at peace could no longer be taken for granted. In turn, this required a rededication of resources and support for the North Atlantic Treaty Organization.

These developments provoked contradictory criticisms—that Obama had rebalanced too much or not enough. Some attributed the Islamic State’s rise, the descent to chaos in Syria and the broader region, and even increased Russian adventurism, to Obama’s reluctance to assert U.S. power, particularly military power, in the Middle East. Following a similar logic, critics also argued that a greater demonstration of U.S. resolve and show of force had been warranted to counter Russian and Chinese coercion of U.S. allies and partners in Europe and Asia. Conversely, others saw maintenance of a robust and expanding counterterrorism architecture, particularly in the Middle East and Afghanistan, as indicative of walking back from the promised rebalance from these regions toward economic opportunities elsewhere in the world.

Even though Obama was unable to fully effectuate his proposed strategic rebalance, a number of important accomplishments had been achieved before he left office. The United States was no longer shouldering the burden for expensive ground wars in Afghanistan or Iraq, but instead had a much smaller military footprint in those countries and had mobilized a global coalition to combat the terrorist threat, with particular success against the Islamic State. The financial crisis had been largely overcome, with unemployment reduced to under 5 percent and seventy-five straight months of job growth.76 The United States was favorably positioned in areas of emerging growth, especially in the Western Hemisphere and Asia, notwithstanding the failure to ratify the TPP. And the United States had significantly reduced (but by no means eliminated) dependence on Middle East oil, shifting its energy position from a strategic liability to a source of strength. All of this was achieved by Obama while maintaining his predecessor’s commitment to U.S. leadership and an open trading system.

It is not a black and white choice between mercantilism and liberalism: private enterprise and alliances played key roles in the age of mercantilism, just as international trade was never completely free even during liberalism’s ascendancy.

Shortly before leaving office, Obama reflected on key strategic choices that would face his successor and other world leaders. In his last address to the United Nations General Assembly in September 2016, he spoke to the “paradox that defines our world today.”77 He noted that a quarter century after the Cold War’s end, “the world is by many measures less violent and more prosperous than ever before.” He elaborated on the progress that had been achieved, particularly as a result of the integrated global economy, but then dedicated the bulk of his speech to the course corrections required to sustain domestic and international support for it.

Obama sounded the alarm over stagnant wages for average workers and rising income inequality. He called for “making the global economy work better for all people and not just for those at the top.” He called out advanced economies, including the United States, to restore support for unions and confront the reality of major job losses in the manufacturing sector due both to globalization and technological advances. He also called out “governments with export-driven models”—an obvious reference to China—to stop pursuing “mercantilist policies” that “threaten to undermine the consensus that underpins global trade.” These, among other course corrections he proposed, reflected his belief and anxiety that reform of the system would be required to sustain support for it. The critical choice leaders faced was whether to “press forward with a better model of cooperation and integration” or “retreat into a world sharply divided, and ultimately in conflict, along age-old lines of nation and tribe and race and religion.”

Trump’s Neo-Mercantilism?

The international order and open trading system now face the greatest challenges since the end of the Cold War. Their future remains uncertain, and much hinges on Trump’s policy decisions and international reactions to them. It is not a black and white choice between mercantilism and liberalism: private enterprise and alliances played key roles in the age of mercantilism, just as international trade was never completely free even during liberalism’s ascendancy. In today’s liberal international order—as ideas, people, goods, and services flow freely across borders—many countries nonetheless pursue policies designed to promote their national industries. In formulating foreign and economic policy, each state must select a blend of approaches that leverage its unique comparative advantages and meet the particular challenges of the moment.

Trump’s aversion to government regulation, is entirely at odds with the strong belief among mercantile writers that the state can, and should, directly intervene in the economy to promote the national interest. But his early statements and actions show multiple affinities with the nationalist, zero-sum logic of the mercantile period.

Trump could seek to preserve the U.S.-led international order, while proposing his own mix of policies to better serve average U.S. workers and families. He could use all the instruments of U.S. power—as the mercantilists advised, in ways similar or quite different from Obama—to make the United States more competitive within that order and to assist those not able to reap its benefits. And he could propose new ideas to strengthen the alliances and international institutions that have helped keep the United States safe from external threats. Or he could repudiate and renounce U.S. leadership of the liberal international order, break sharply with past predecessors going back to Reagan, and pursue a decidedly more mercantile approach to the U.S. role in the world. On this front, the Trump administration’s forthcoming national security strategy will offer an important opportunity to clarify the mixed messages it has proffered to date.

On the surface, Trump’s ideas break with traditional mercantilism in important ways. His aversion to government regulation, for example, is entirely at odds with the strong belief among mercantile writers that the state can, and should, directly intervene in the economy to promote the national interest. But his early statements and actions show multiple affinities with the nationalist, zero-sum logic of the mercantile period. In his presidential inaugural address, Trump decried that the United States had for decades “enriched foreign industry at the expense of American industry” and “made other countries rich while the wealth, strength, and confidence of our country has disappeared over the horizon.”78 Speaking at a Boeing event in South Carolina some weeks later, he threatened firms with “a very substantial penalty to be paid when they fire their people and move to another country, make the product, and think that they’re going to sell it back over what will soon be a very, very strong border.”79 He then proposed a budget to Congress that would drastically cut critical funding for U.S. diplomacy, development, and trade assistance, promising instead to increase military spending—not to underwrite the international order, but to ensure that the United States is sufficiently strong, on its own, to be able to deter any potential adversary.80 And he pulled the United States out of a series of international agreements, including the TPP and, most recently, the Paris climate accord.

There is clearly a yearning in key segments across the political spectrum for a thoughtful and honest conversation on what it will take to help those struggling in today’s integrated and automated global economy.

Taken together, his statements and decisions suggest a neo-mercantile strategy, in which the United States’ role in the world would be primarily transactional and adversarial, the broad consensus in favor of free trade would be sacrificed to satisfy specific domestic constituencies, and the tools of U.S. statecraft would be oriented primarily toward a narrow definition of self-interest. There would be little room for sustained international cooperation to address common problems or for the kind of moral leadership on issues like human rights and democracy that the United States has aspired to for the past seventy years.

As many commentators have noted, the relationship between rhetoric and real policy under Trump remains deeply uncertain, and for many at home and abroad, confusing. Even as Trump questions forthrightly the benefits to the United States of its commitment to traditional allies, including trade relationships with them, his senior advisers travel the world assuring those same allies that the United States remains committed to these alliances and relationships.

The Trump administration could clarify its positions and change the conversation by candidly providing its views on at least three questions.

First, does it view trade in both economic and strategic terms? Trade has long been a key pillar in U.S. strategy to promote shared prosperity and strengthen ties with other democratic nations who share U.S. interests and values. Not all trading relationships are the same, and not all relationships are merely transactional. As made clear in the national security strategies issued by Reagan to Obama, the United States has always viewed questions of trade from both an economic and strategic perspective. Does the Trump administration as well? Not only as a means to enrich the United States but also as a means to strengthen its partners? If it does, that could go a long way in reassuring longtime allies that the United States is not walking away, leaving them to look for new partners. If it does not, then this could indeed mark a historic turning point.

Second, what is the administration’s overall strategy for the United States to compete more effectively with China and other economic powers over the long term and to ensure the strategy’s success ultimately benefits average American workers and families? There is clearly a yearning in key segments across the political spectrum for a thoughtful and honest conversation on what it will take to help those struggling in today’s integrated and automated global economy. That includes lifting stagnant wages, restoring social mobility, contending with job losses due to both globalization and new technologies, and keeping consumer goods and services accessible and affordable.

Were the United States to question the wisdom of the international framework itself, renounce its special responsibilities, and insist it simply behave and be treated the same as all other nations, then we can expect the same in return.

An honest conversation on this question entails going beyond promising lower taxes, less regulation, and better trade deals to acknowledging the difficult trade-offs. Within the context of the national security strategy, that means squaring the investments the U.S. government could make to enhance its economic competitiveness (for example, in national infrastructure, education, and job training) with the costs it must incur or could avoid for major military engagements abroad. It means forthrightly acknowledging that the United States has huge competitive advantages in an open, integrated global economy, while devoting special attention to the industries and communities that are losing out. And it means coming to terms with questions of reciprocity. The United States’ legitimate demands of others come with obligations as well; likewise, any protectionist measures by the United States are likely to be met abroad with a response in-kind that could have devastating consequences for economic growth.

Finally, how does the Trump administration plan to cooperate constructively with China and other major powers to advance mutual interests, as it simultaneously competes with them? How will it keep the United States safe over the long term without investing in international institutions and conventions initially designed to prevent a third world war? Previous administrations recognized that nations do not always have shared interests and are simultaneously cooperating as partners and competing as rivals. To ensure such competition remains peaceful, all participant nations in this order have consented to wage it within the bounds of an agreed framework. They have created institutions and mechanisms to monitor and enforce compliance with the agreed-upon rules. And the United States, as the world’s most powerful nation, has assumed special responsibilities for ensuring the framework’s survival. That has meant employing all instruments of national power to defend the framework, while constraining the exercise of that power.

There is ample cause for the United States to question whether others are abiding by or assuming their responsibilities adequately, especially Russia and China. Others, likewise, will continue to point to major inconsistencies in the United States’ own role in defending and abiding by the framework. But were the United States to question the wisdom of the framework itself, renounce its special responsibilities, and insist it simply behave and be treated the same as all other nations, then we can expect the same in return—and with it the threat of the frequent and potentially catastrophic warfare that epitomized the age of mercantilism. If the Trump administration believes that it can pursue a neo-mercantile approach while avoiding this outcome, the forthcoming national security strategy would be a good place to explain how.

Notes

1 H. R. McMaster and Gary D. Cohn, “America First Doesn’t Mean America Alone,” Wall Street Journal, May 30, 2017, https://www.wsj.com/articles/america-first-doesnt-mean-america-alone-1496187426.

2 Gary D. Cohn and H. R. McMaster, “The Trump Vision for America Abroad,” New York Times, July 13, 2017, https://www.nytimes.com/2017/07/13/opinion/the-trump-vision-for-america-abroad.html.

3 Ibid.

4 Donald J. Trump, “Remarks to the People of Poland,” Office of the Press Secretary, White House, July 7, 2017, https://www.whitehouse.gov/the-press-office/2017/07/06/remarks-president-trump-people-poland-july-6-2017.

5 Binyamin Appelbaum, “On Trade, Donald Trump Breaks With 200 Years of Economic Orthodoxy,” New York Times, March 10, 2016, https://www.nytimes.com/2016/03/11/us/politics/-trade-donald-trump-breaks-200-years-economic-orthodoxy-mercantilism.html?_r=0.

6 Joel Mokyr, “How ‘America First’ Could Become America Last,” PBS Newshour, June 12, 2017, http://www.pbs.org/newshour/making-sense/column-america-first-become-america-last/.

7 Charles Szrom, “The Mercantilism of Donald Trump,” RealClearWorld, September 23, 2016, http://www.realclearworld.com/articles/2016/09/23/the_mercantilism_of_donald_trump_112059.html.

8 Dan Kopf, “Trump’s Signature Trade Policy Was Debunked by Adam Smith More Than 200 Years Ago,” Quartz, January 26, 2017, https://qz.com/894085/donald-trumps-mercantilist-trade-policy-was-debunked-by-economist-adam-smith-more-than-200-years-ago/.

9 Philip J. Stern and Carl Wennerlind, “Introduction,” in Mercantilism Reimagined: Political Economy in Early Modern Britain and Its Empire, eds. Philip J. Stern and Carl Wennerlind (New York: Oxford University Press, 2014), 5–6.

10 Robert Gilpin, The Political Economy of International Relations (Princeton, NJ: Princeton University Press, 1987), 19.

11 Eli F. Heckscher, Mercantilism, vol. 2 (London: George Allen and Unwin, Second Edition, 1955), 13.

12 Henry A. Kissinger, Diplomacy (New York: Simon and Schuster, 1994), 59.

13 Jacob Viner, Essays on the Intellectual History of Economics (Princeton, NJ: Princeton University Press, 1991), 267.

14 Ibid., 133.

15 Istvan Hont, “Free Trade and the Economic Limits to National Politics,” in The Economic Limits to Politics, ed. John Dunn (Cambridge, MA: Cambridge University Press, 1990), 41–120.

16 See Robert D. Blackwill and Jennifer M. Harris, War by Other Means: Geoeconomics and Statecraft (Cambridge, MA: Harvard University Press, 2016).

17 Heckscher, vol. 2, 31–49.

18 Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, NJ: Princeton University Press, 2000), 159–61.

19 John Shovlin, “Trade, International Competition, and Political Economy,” in Stern and Wennerlind, Mercantilism Reimagined, 315.

20 Sankar Muthu, Enlightenment Against Empire (Princeton, NJ: Princeton University Press, 2003).

21 Albert O. Hirschman, The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph (Princeton, NJ: Princeton University Press, 1977).

22 David Hume, Essays: Moral, Political, and Literary (Indianapolis, IN: Liberty Fund, 1987), 327–28.

23 Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Book I, Chapter 1, edited with an Introduction, Notes, Marginal Summary and an Enlarged Index by Edwin Cannan (London: Methuen, 1904).

24 Paul Kennedy, The Rise and Fall of the Great Powers (New York: Vintage Books, 1987), 153.

25 Stephen D. Krasner, “State Power and the Structure of International Trade,” in International Political Economy: Perspective on Global Wealth and Power, eds. Jeffry A. Frieden, David A. Lake, and J. Lawrence Broz (New York: W.W. Norton and Company, 2010), 36.

26 Kori Schake, Safe Passage: The Transition from British to American Hegemony (Cambridge, MA: Harvard University Press, forthcoming).

27 Ibid., 30.

28 Robert E. Baldwin, “U.S. Trade Policy Since 1934: An Uneven Path Toward Greater Trade Liberalization,” National Bureau of Economic Research, Working Paper no. 15397, October 2009, http://www.nber.org/papers/w15397; J. David Richardson, “U.S. Trade Policy in the 1980s: Turns—and Roads Not Taken,” National Bureau of Economic Research, Working Paper no. 3725, June 1991, http://www.nber.org/papers/w3725.pdf.

29 Taylor Group, “National Security Strategy Archive,” http://nssarchive.us/.

30 “National Security Strategy of the United States,” White House: Ronald Reagan, January 1988, 2, http://nssarchive.us/NSSR/1988.pdf.

31 Ibid., 12.

32 “National Security Strategy of the United States,” White House: George H. W. Bush, March 1990, 6, http://nssarchive.us/NSSR/1990.pdf.

33 Ibid., 22.

34 Ibid., 22.

35 Ibid., 22.

36 Ibid., 8.

37 “National Security Strategy of the United States,” White House: George H. W. Bush, August 1991, 2, http://nssarchive.us/NSSR/1991.pdf.

38 Ibid., 3.

39 “A National Security Strategy of Engagement and Enlargement,” White House: William J. Clinton, July 1994, 2, http://nssarchive.us/NSSR/1994.pdf.

40 Ibid., 24.

41 Ibid.

42 “A National Security Strategy for a Global Age,” White House: William J. Clinton, December 2000, i, http://history.defense.gov/Portals/70/Documents/nss/nss2000.pdf.

43 Ibid.

44 “A National Security Strategy for a New Century,” White House: William. J. Clinton, December 1999, 62, http://nssarchive.us/NSSR/2000.pdf.

45 Ibid.

46 “A National Security Strategy for a Global Age,” White House: William J. Clinton, December 2000, ii, http://history.defense.gov/Portals/70/Documents/nss/nss2000.pdf.

47 “The National Security Strategy for the United States of America,” White House: George W. Bush September 2002, i, https://www.state.gov/documents/organization/63562.pdf.

48 Ibid., ii.

49 Ibid., 28.

50 Ibid., 19.

51 “The National Security Strategy for the United States of America,” White House: George W. Bush, March 2006, 41, https://www.state.gov/documents/organization/64884.pdf.

52 Ibid.

53 The full quote from the preface of the 2015 national strategy is as follows: “The challenges we face require strategic patience and persistence. They require us to take our responsibilities seriously and make the smart investments in the foundations of our national power. Therefore, I will continue to pursue a comprehensive agenda that draws on all elements of our national strength, that is attuned to the strategic risks and opportunities we face, and that is guided by the principles and priorities set out in this strategy. Moreover, I will continue to insist on budgets that safeguard our strength and work with the Congress to end sequestration, which undercuts our national security.” See “National Security Strategy,” White House: Barack Obama, February 2015, ii, https://obamawhitehouse.archives.gov/sites/default/files/docs/2015_national_security_strategy.pdf.

54 “National Security Strategy,” May 2010, White House: Barack Obama, https://obamawhitehouse.archives.gov/sites/default/files/rss_viewer/national_security_strategy.pdf.

55 Author interviews with senior White House officials close to Obama, June 2017, Washington, DC.

56 National Intelligence Council, Global Trends 2025: A Transformed World (Washington, DC: National Intelligence Council, November 2008), vi, https://www.dni.gov/files/documents/Newsroom/Reports%20and%20Pubs/2025_Global_Trends_Final_Report.pdf.

57 Ibid., vi.

58 Ibid., vii.

59 Ibid., v.

60 “National Security Strategy,” White House: Barack Obama, May 2010, 7.

61 Ibid., 9.

62 Ibid., 2.

63 Ibid.

64 Ibid., 36.

65 Ibid.

66 Ibid., 37.

67 Ibid., 33.

68 Ibid., 3.

79 Ibid.

70 Ibid.

71 Ibid.

72 “Fact Sheet: U.S. Global Development Policy,” White House: Barack Obama, September 22, 2010, https://obamawhitehouse.archives.gov/the-press-office/2010/09/22/fact-sheet-us-global-development-policy.

73 “National Security Strategy,” White House: Barack Obama, February 2015.

74 Ibid., 17.

75 Ibid., 12.

76 Patrick Gillespie, “A Record 75 Straight Months of Job Growth Under Obama,” CNN, January 6, 2017, http://money.cnn.com/2017/01/06/news/economy/december-jobs-report-2016/.

77 Barack Obama, “Address to the 71st Session of the United Nations General Assembly,” White House: Barack Obama, September 20, 2016, New York, https://obamawhitehouse.archives.gov/the-press-office/2016/09/20/address-president-obama-71st-session-united-nations-general-assembly.

78 Donald J. Trump, “Inaugural Address,” Office of the Press Secretary, White House, January 20, 2017, Washington, DC, https://www.whitehouse.gov/inaugural-address.

79 Donald J. Trump, “Remarks at Unveiling of Boeing 787 Dreamliner Aircraft,” Office of the Press Secretary, White House, February 17, 2017, North Charleston, South Carolina, https://www.whitehouse.gov/the-press-office/2017/02/17/remarks-president-trump-unveiling-boeing-787-dreamliner-aircraft.

80 Colin Kahl and Hal Brands, “Trump’s Grand Strategic Train Wreck,” Foreign Policy, January 31, 2017, http://foreignpolicy.com/2017/01/31/trumps-grand-strategic-train-wreck/.