Chubb Chairman and CEO Evan Greenberg voiced dissatisfaction about the “America First” political direction of the United States and how it is causing damage to world trade and politics.
“I am concerned about my country’s America First brand of nationalism and its impact on our image and leadership in both trade and geopolitics in the short and potentially longer term,” Greenberg wrote in his letter to shareholders included with Chubb’s recently released 2017 annual report. “By diminishing the country’s reputation for reliability, the overly nationalistic approach damages our credibility.”
While Greenberg has supported Trump’s tax reform law, he’s voiced steady concerns about other policies, using at least one previous earnings call last year to critique plans to restrict immigration as well as nationalist/protectionist sentiments spreading internationally. His new shareholder letter makes a particular target of the America First strategy, something President Donald Trump has made a cornerstone of his trade and foreign policy. While Greenberg did not mention Trump by name, he said the strategy Trump supports has been harmful on multiple levels.
“Our rejection of multilateral agreements like the Trans-Pacific Partnership is a missed opportunity to lead with a vision of market-oriented, rules-based trade,” Greenberg said. “When it comes to trade, we are becoming a source of potential instability at a time when we are needed to galvanize like-minded countries in a unified direction.”
He said that an America First approach was a harmful rejection of the global multilateral system that the U.S. has supported for nearly 70 years.
“Our approach to bilateral negotiations now seems to reflect a narrow view of our interests while ignoring the interests of trading partners as if somehow it is simply a privilege to trade with the United States,” Greenberg wrote. “It overestimates our power and underestimates the value of trade agreements for the country.”
NAFTA, China and the Perils of Protectionism
Greenberg’s concerns also apply to an ongoing issue close to home. In last year’s shareholder letter, Greenberg expressed worry about Trump’s threats to tear up the NAFTA (North American Free Trade Agreement) deal between the United States, Canada and Mexico. This year, he pointed out that U.S. firms operating in Mexico and Canada have plenty at stake, including Chubb, and that the renegotiation or cancellation of the NAFTA agreement could cause widespread economic and political harm.
“It’s troubling to imagine a NAFTA that goes backwards – our first principle for renegotiation should be to do no harm,” he wrote. “Interrupting the $1.3 trillion in annual trade across our borders, or reverting to the high tariffs and other trade barriers that preceded NAFTA, would be devastating for workers, farmers, service providers and exporters in all three countries.”
Greenberg said the NAFTA deal and others like it ensure a “rules-based system of trade, and one that’s fair,” adding that America has been in the lead of promoting that concept for years.
Greenberg wants to see that rules-based trade approach with China. In recent weeks, the U.S. and China have punched and counterpunched, respectively, with the threat of tariffs on billions of dollars of products.
Greenberg said he agreed that China continued to have “market access barriers and industrial policies” that prevented greater economic and commercial ties, as well as a more level playing field for trade.
But instead of a trade war, Greenberg said the U.S. should work with “like-minded partners that have similar issues with China-related trade and investment policies and negotiate, seeking practical solutions that address their business interests.”