If the US refuses to build trade relations, or becomes known for breaking agreements, then that gives China the opportunity to come in and instead establish their entertainment, technology, banking, and consumer goods companies. This would be clearly at the expense of the US and would gradually erode our economic influence around the world.
People around the world drink Coke, eat McDonalds, search on Google, get loans from Wells Fargo, buy stuff on their Visas, etc, largely due to these agreements. This money funnels back to the US to pay salaries, taxes and dividends.
So, short-term, US sheep farmers benefit from not having to compete on fair terms with New Zealand wool. But long-term, all other Americans lose as the income streams from established American companies are transferred to their non-US counterparts.
That's why the TPP is so important, it specifically excludes China because the goal is to further entrench US companies in SE Asia/Oceania. If the US backs out, then that gives China the opportunity to come in and sell the low-cost smart phones AND overpriced sugar water.
We are competing with China for trade partners and it seems backwards to me to forfeit.
What do you think they are doing with that money in tax havens? They buy US bonds and invest that money in our markets.
The US is eating the apples but China owns the orchard.
That's just one example but I was impressed when I saw it. And they have been adding 1 new LINE per year in Beijing, wheras we don't even add 1 new station per year in most US cities.
Have you been to China recently?
We spend most on military, social security and medicare. China doesn't.
https://lh5.googleusercontent.com/Rv5UHrNsvcucvflDwwz_pqEjjH...
Or rather to Bermuda, to fill the 0.5% tax-free accounts. So the sheep farmers are screwed and everyone else is screwed too. This is why people reject free trade (or think they do that by voting someone like Trump, which is another topic).
http://smallbusiness.house.gov/uploadedfiles/april_recess_sm...
China's actively seeking trade deals all over the world. The US taking a strongly antitrade position could improve their relative position. The devil is really in the details, though.
The geopolitical implications of Trump's isolationist position is going to be significant.
Since the China FTA came into effect, China has replaced the US as NZ's number 1 trading partner. The US is 4th on that list.[3]
Actual graph showing surplus:
[1]http://thediplomat.com/2014/01/feeding-the-dragon-lessons-of...
[2] http://www.stats.govt.nz/browse_for_stats/industry_sectors/i... [3] http://www.stats.govt.nz/browse_for_stats/snapshots-of-nz/nz...