Rex Tillerson and the pursuit of profit in American foreign policy

Assuming he survives his confirmation hearing this week, Rex Tillerson will become the first secretary of state to have never served in government or the military, having instead spent 41 years in the business world working for oil giant Exxon.

{mosads}Some analysts and media have speculated President-elect Trump picked Tillerson because his work with Exxon helped him build strong ties and deep knowledge of Russia, laying the groundwork for improved relations with Vladimir Putin; thus Tillerson’s views on Russia will likely feature prominently at his confirmation hearings. Yet there is another more basic, and more profound, way in which Tillerson’s business experience likely appealed to Trump, and led him to believe Tillerson is the best man to implement his foreign policy. To a degree unlike any American administration in living memory, Trump is poised to organize American foreign policy around economic interests, elevating commercial objectives above all other concerns.

Historically, there was often a tension in American foreign policy between commercial and strategic interests. Throughout the Cold War, when developing county governments flirted with economic nationalist policies that would hurt American businesses, the State Department faced a dilemma. It could condemn government interventions in markets and use its leverage to fight for the rights of American businesses – generally by slashing foreign aid budgets – but doing so risked pushing developing countries toward the Soviet Union. Or it could prioritize maintaining strategic relations despite rising economic nationalism, often over the protestations of the business community and their supporters in Congress. The core strategic objective of American foreign policy, the containment of Communism, was frequently in conflict with robust support for American businesses abroad.

In the decades following the end of the Cold War, however, American foreign business interests and strategic interests more often converged. The U.S. looked to simultaneously spread democracy and capitalism around the world. The American foreign policy of encouraging countries to open their markets, protect property rights and the rule of law and engage in the global economy both helped American businesses thrive in new markets and tied countries into the rules-based, U.S.-led liberal order. Supporting the economic success of American companies abroad was an instrument for achieving broader foreign policy goals in America’s national interests.

Hillary Clinton epitomized this philosophy as secretary of state, making the practice of “economic statecraft” a hallmark of her tenure at Foggy Bottom. Clinton created the agency’s first Office of the Chief Economist, and in a famous “ambassadors-as-CEOs” memo directed diplomats to devote greater attention to helping US firms win contracts overseas. Clinton’s support for American businesses and embrace of economic tools reflected a worldview in which increasing trade and investment links both constituted and further fostered global liberal progress, where corporate success, capitalist economic development and effective political institutions all reinforced one another. (Call it a Davos-era update on the old modernization theory.) 

Advancing commercial goals was thus one piece of a larger strategic geopolitical vision. If American firms were losing out to Chinese competition for contracts in Africa and Asia, for instance, this was not only a blow to the firms themselves but also had broader strategic implications for American influence in the world.

If Clinton had won in November, we might have expected her presidency to fully institutionalize this approach to foreign policy, relying on economic instruments to promote the strengthening and spreading of the liberal capitalist order. But of course she did not, and thus we are left to ponder what will define Trump’s foreign policy. Based both on Trump’s previous statements and his selection of Tillerson, if there is an organizing principle of the emergent Trump/Tillerson foreign policy, it is an almost singular focus on commercial interests. That is, Trump’s foreign policy, like Clinton’s, is likely to place significant emphasis on economics and business concerns. Yet crucially, in stark contrast to Clinton, for Trump this is not one plank supporting a larger liberal internationalist strategy, but rather the ultimate goal in and of itself in a zero-sum mercantilist world.

Where Clinton espoused using economic tools to advance political objectives, Trump is likely to turn this maxim on its head, using political means and might to secure economic gains. Whether in calls to “take the oil” from Iraq and the Middle East, or suggestions that the US-Taiwan relationship could be used as a bargaining chip in an economic deal with China, Trump has repeatedly viewed foreign policies as instruments for promoting America’s immediate economic and commercial interests. The broader strategic, ideological and values-driven concerns which have typically been foundational to US foreign policy – promoting democracy and human rights, increasing American soft power and influence, cultivating a network of alliances and supporting an open and stable international order – are at best subservient to economic goals, and more likely altogether irrelevant.

This, far more than any alleged Russophilia, is the necessary context for making sense of Rex Tillerson as the next secretary of state. Tillerson’s key qualification for the job is the decades he spent learning how to manage political relationships with foreign governments well enough to ensure the oil and money keep flowing.

Tillerson mastered this art for Exxon – including, of course, in Russia – and now Trump appears to hope that, with the full resources of the State Department behind him, he will similarly succeed for a broader set of U.S. companies facing a range of commercial opportunities and challenges around the world. Adopting a transactional, deals-based approach to foreign policy, Tillerson will be charged with using America’s international political capital as leverage for extracting concessions from foreign governments to benefit America’s economic and business interests.

Is this an appropriate foreign policy for the world’s lone superpower? Will it serve America’s long term interests? Rather than focus on his ties to Russia, these are the types of questions senators should pose to Tillerson during his confirmation hearings.

Geoffrey Gertz is a post-doctoral fellow in the Global Economy and Development program at the Brookings Institution. His research focuses on the political economy of foreign investment.

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