In a sharp break from past policy, the United States has announced and is implementing a policy of economic nationalism in the name of political populism that seeks strict border controls over all forms of economic factors of production, products, services, investment, and people. The avowed purpose of this policy is to protect national security and to improve the balance of trade of the United States. This article argues that this policy of economic nationalism, on its face, is contrary to accepted rules, procedures, and principles of international law and threatens irreparable harm to the multilateral system of trade and investment developed under American leadership since World War II. Furthermore, because economic nationalism flies in the face of generally accepted economic principles and experience, it cannot attain its stated goals.

International economic imbalances facing the United States can be best addressed by employing macroeconomic tools and using established multilateral economic forums. Although the new United States’ policy of economic nationalism is directed at all U.S. trading partners, even against close allies such as the European Union, Canada, and Japan, a particular target of this policy is Chinese trade and investment. China’s emergence as a great economic power cannot be substantially impeded by U.S. unilateral actions. The rise of China can best be managed by (1) renewed emphasis on the existing rules of the multilateral trading system; (2) confronting China with new regional trade rules and investment rules agreed by the United States and its allies, principally the Transpacific Partnership Agreement and the Trans-Atlantic Trade and Investment Partnership Agreement; (3) a new “Trump Round” of trade negotiations at the WTO; and (4) continued bilateral engagement.