President Donald Trump reportedly wants to yank the US out of the World Trade Organisation, a move that would upend the decades-old international trading order.
Jonathan Swan at the news website Axios cited an anonymous source on Friday as saying Trump had repeatedly asked his advisers about pulling the US out of the WTO and had said the rest of the world used the organisation to "screw the United States".
The WTO is the body meant to settle international trade disputes using a rules-based system, theoretically ending unfair trade practices and tamping down the threat of trade wars. The organisation grew out of the General Agreement on Tariffs and Trade and was officially founded in 1995.
Removing the US from the WTO would undermine the legitimacy of the organisation, remove the largest economy from it, and ignite the possibility that countries would no longer follow the system of trade rules created by the international community.
According to Axios, White House officials push back on Trump's suggestions to leave the WTO and typically dismiss the suggestion despite Trump having brought up the idea multiple times.
Trump would need congressional approval to pull the US out of the WTO, something he is unlikely to receive.
At the same time, Edward Alden, a senior fellow at the Council on Foreign Relations, told Business Insider that Trump's disregard for WTO rules in the implementation of the steel and aluminium tariffs could make pulling out of the group unnecessary.
"While you never know with this president, I consider it unlikely that Trump will try to pull the US out of the WTO," Alden said. "He has already shown that he can pursue the policies he wants without regard to WTO rules. The WTO has not been a constraint on this administration."
Alden added, however, that if Trump did pull the plug, it would be a serious negative for the global economy.
"Obviously if he did try to pull out, that would create greater trade uncertainty, which is not good for the economy," he said. "But there is plenty of uncertainty as it is already."
Simon Lester, the associate director of the Cato Institute's Herbert A. Stiefel Centre for Trade Policy Studies, told Business Insider that the US leaving the WTO would most likely lead to "an economic disaster" and pointed to three "big losses" from an exit.
Treasury Secretary Steven Mnuchin pushed back on the report, saying it was "an exaggeration" to say Trump wanted to pull the US out of the WTO. He called the Axios report "fake news." The White House's legislative director, Marc Short, said that Trump was frustrated with the WTO, but that he was not aware of any plan to get the US out of the organisation.
Swan defended the report on Twitter following Mnuchin's denial.
"Aka — for the Twitter users going berserk — Mnuchin LIED," Swan tweeted. "Trump has explicitly told his adviser he wants to withdraw from the WTO many times. Mnuchin has been in the room when he has said this. Every sentence in our story is accurate, including the way we framed the plausibility.
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