Trump is trying to 'de-globalize' the Chinese and US economies, former WTO chief says

  • Trump has imposed tariffs on Chinese goods since the start of the year in an attempt to reduce the U.S.'s trade deficit.
  • Lamy believes that globalization will remain a dominant feature of global trade, and it will involve the U.S. and China -- but not the two countries together.
President Donald Trump speaks during a press conference with China's President Xi Jinping at the Great Hall of the People in Beijing on November 9, 2017.
Nicholas Asfouri | AFP | Getty Images
President Donald Trump speaks during a press conference with China's President Xi Jinping at the Great Hall of the People in Beijing on November 9, 2017.

President Donald Trump is trying to "de-globalize" the U.S. and Chinese economies, the former head of the World Trade Organization (WTO) told CNBC on Monday.

Trump has imposed tariffs on Chinese goods since the start of the year in an attempt to reduce the U.S.'s trade deficit. The controversial policy is intended to reduce the attractiveness of Chinese products, given that they become pricier with tariffs imposed on them. But the decision to impose tariffs on China has led to retaliatory measures from Beijing, which has also increased the price of U.S. imported goods for Chinese consumers.

The ongoing dispute will make both economies less "entwined" and thus less globalized, Pascal Lamy, former director-general of the WTO told CNBC's "Squawk Box Europe."

"The U.S. is trying to push back on China and Donald Trump's view is that the U.S. and the Chinese economy are too much together, and they need to be more separated. The purpose is a sort of de-globalization of the U.S. and China, which he thinks it is necessary to contain China's rise," Lamy, who is President Emeritus of think tank, the Jacques Delors Institute, said.

He explained that this separation between the Chinese and the U.S. economies "will have trade consequences."

"My own expectation is that these economies will be disentangled slowly but surely … We will have a less homogenous globalization, that's the real issue, which we have to take care of in the short-term," he added.

Lamy believes that globalization will remain a dominant feature of global trade, and it will involve the U.S. and China -- but not the two countries together. For instance, the U.S. will still look to be close to the European Union in terms of trade. The Trump administration also agreed last week to a newly-revised version of a trade deal with Canada and Mexico.

Lamy said domestic attitudes towards global trading relations had changed in the last decade. "The mood has changed from where it was 10 years ago on opening trade. I think the main feature of that is not a trade issue, it is a domestic issue," he said.