Make America 1929 Again

During his election campaign, Trump never stopped waxing lyrical about China who he stigmatised for all types of wrongdoing, citing high levels of damage to American interests due to unfair business practices. However, a year after being elected, it’s against his closest allies – Canada and Europe – that Trump is raging, all the while staying strangely and worryingly silent on China. Having had no qualms with repeatedly calling China the “Bad Guy”, here he is now announcing on May 31^st – unilaterally and with immediate effect – a 25% customs tariff on steel and aluminium imports from these countries, which equates to the considerable sum of 23 billion dollars’ worth of imports per year.

Can we treat secular allies as both competitors and adversaries? What is the logic that underpins this abhorrent decision of Trump’s? The logic that is irreparably alienating his closest partners, who would have otherwise made for useful back-up in a trade stand-off between the US and China. Beyond the uncertain economic consequences for the United States, who might nevertheless be hit with rises in inflation and unemployment, the country will undoubtedly relinquish even more international influence. The protectionism established in 1928 was a root cause of the Great Depression. Let us not forget that the Republican Party at the time hoped “to support certain industries that cannot compete with foreign producers because of their low wages and living standards”, and the “Hawley-Smoot” law established in June 1930 that strengthened tariffs on a number of imports from 39 to 53%.

These details don’t really matter to Trump though, whose sole motivation seems to be of a political nature. He has barely taken into account the economic logic that clearly anticipates job losses following punitive expeditions, because he wants show to the losers of globalisation and those in unstable jobs in his own country that he is looking after them, that he hasn’t forgotten them. It’s obvious that it’s these left-behind social classes who will pay the highest price for the recent measures, but they will nevertheless convince themselves that their President is defending their interests. Whatever the consequences for the international relations stage, and even if the US is brought before the WTO at the price of a loss of confidence with Europeans that would have nefarious effects even in the long term, the fact is that the President of the United States of America has declared an all-out trade war.

There’s no doubt about it, Trump’s aim is to shake up the world order because he’s convinced he’ll come out on top. We just have to look back to his Tweet of 2 March that kicked off the hostilities: “Trade wards are good, and easy to win”.