Globalisation’s revenge: Trump may soon be faced

with consequences from the trade wars he has

launched
June 30, 2018, 2:00 AM IST Nayan Chanda in TOI Edit Page | Edit Page, India, World | TOI

President Donald Trump’s dramatic recent moves – from separating children from
their asylum-seeking parents to launching trade wars against all of America’s main
trading partners – have added an alarming new dimension to the adage that “all
politics is local.” Whether his goals are to deliver victory to the Republican Party in
November’s midterm elections or merely to ensure his own political survival, all of
these measures have significant global ramifications.

As special counsel Robert Mueller’s investigation of Russian meddling in the 2016

election continues to cast a pall over Trump’s presidency, preserving Republican
control of Congress in November has assumed almost existential importance.
Allowing Democrats to win control of the House opens the possibility of a vote to
impeach (though removing him from office requires a two-thirds vote in the Senate,
which remains unlikely). All of Trump’s actions now – his harsh anti-immigrant
measures and provocative trade tariffs and even seeking peace with North Korea’s
‘little Rocket Man’ – are designed to galvanise his supporters to block the energised
Democrats and prevent the so-called “Blue Wave” from crashing over his presidency.
However, this domestic battle has already triggered a global trade war, the
unintended consequences of which could ricochet back and hurt some of the very
voters Trump needs in November.

Candidate Trump secured his party’s nomination and ultimately the presidency by
capitalising on the anger and disillusionment of voters who felt marginalised by
globalisation, especially the demographic and cultural challenges brought on by
rising non-white migration and job losses wrought by global trade and automation.
Attendees at raucous Trump rallies across America’s heartland cheered as he blamed
foreigners – and America’s own entangling trade and security alliances – for their
misfortunes.

With the US riding an economic boom and unemployment at a record low, Trump
has stoked fears by casting Democrats as supporters of uncontrolled immigration
and trade competitors who threaten America’s Christian faith, culture and economic
independence. He has tried to present himself as a strong leader, prepared to take
tough, unpopular measures like separating children from their asylum-seeking
parents, discarding established legal protections, and launching tariff wars against
not only China but traditional allies like Canada, Japan and the European Union. To
showcase his deal making prowess, he has already proclaimed victory in transforming
North Korean leader Kim Jong-un from a “sick puppy” out to attack America to an
honourable and trustworthy leader who “loves his people” and is committed to
relinquish his nuclear arsenal in exchange for foreign investments. The absence of
evidence that North Korea intends to do any such thing is largely irrelevant to his
diehard supporters.

Still, reality is stubborn and pesky. The EU has hit back with counter tariffs (India too
has promised to impose higher tariffs) that threaten workers, farmers and traders
from many sectors – even the Harley-Davidson motorbike factory that Trump once
praised as an iconic American product. Faced with 31% EU tariffs, the company has
announced plans to move production outside the US and thus threaten many
domestic jobs. Trump’s tariffs on steel and aluminium imports have prompted
factories to cut losses by laying off workers. Farmers who supported Trump now
dread the loss of their main market as China threatens to retaliate with tariffs on
American soybean and other farm exports. US consumer goods manufacturers face
high costs for their imported components.

Trump the real estate mogul failed to appreciate the importance of the intricately
woven supply chain that underpins the globalised world economy. His attempts to
provide relief to big US steel and aluminium producers by imposing tariff on foreign
imports has endangered thousands of small businesses that rely on foreign inputs.
One such factory is a Missouri-based nail maker that has already been forced to lay
off hundreds of workers.

The fate of such manufacturers may not be the proverbial nail in the coffin of
Trump’s midterm campaign but a sharp reminder that globalisation can always bite
back.
DISCLAIMER : Views expressed above are the author's own.