Trump, Economic Nationalism, Unintended Consequences and Blowback
Donald Trump loves a good trade war.
It has all the thrills and spills of a normal war, without the bloodshed (direct bloodshed) and makes great TV.
Donald Trump's 'American First' agenda and its pursuit of trade wars with Mexico, Canada, China and the EU, all point towards a new age of American led Economic nationalism.
However, continuing down this road will only lead to American companies having a challenging time operating and profiting abroad.
The road to economic nationalism is always paved with unexpected potholes. Just look at Brexit.
Please note that this article is not going to cite specific trade policies or rates, as the Trump Administration changes so quickly, I am going to talk in broad terms throughout this article. As let be fair to President Trump, he is mercurial (or flip-flpos).
The Pre-Trump World
Since the collapse of the Soviet Empire in 1989-1991, America and 'the West' have been the dominant players in world politics and economics.
Indeed, America during the period post-Collapse of the Soviet Union and Pre-9/11 was a Colossus (as Neil Ferguson titled his book on the subject).
It operated in an 'America First' fashion, however, it spoke the language of sharing, co-operation and leadership. And although it was certainly the first among equals, it allowed and understood that allies also needed their own space diplomatically and economically to prosper.
This meant even during the 9/11 Wars, even when allies might not have believed the actions of Americans made sense (invading Iraq), they still acted as Allies, provided funds, diplomatic support and did not question the fundamentals of the relationship.
Anti-Americanism was present in many, if not most, societies. It, however,r existed in the fringes of political and economic discourse.
Trumpian Economic Nationalism
Now, the new 'golden age' as Donald Trump puts it, sweeps in both a hardened 'America First' attitude in terms of policy, diplomacy and rhetoric.
However, the most damaging part of this new Trumpian Economic Nationalism is the way it is implemented destroys trust in future American presidents.
This now brings many allies' questions about whether America is a true friend or just a friend of convenience.
Economic Blowback
These 'American First' trade wars are going to change the way close allies of America act, and importantly, how they spend and invest their money.
Essentially, American First Economic Nationalism will trigger similar policies across Europe and Asia.
American businesses and consumers will feel this economic blowback over the coming months and years.
For instance, around 90-95% of all hardwood used in American buildings comes from Northern Canada. This is now going to get more expensive as it is going to be used as a political football.
European countries have gotten the message that you need to buy weapons from countries you can trust, which means more spending with BAE Systems and Finnmecanica and less with Boeing, General Dynamics and Lockheed Martin.
Tariffs will put the price of goods and raw materials up that America cannot produce at the price Americans are used to.
Boycotts and alternative spending will also increase across societies as consumers get fed up, and new non-American trade deals come into force like the recent UK-India trade deal.
Although these measures are not going to break the US economy, they will, over time, affect standards of living and erode the value of the Dollar.
The blowback from Trump's policies risks pushing America deeper into quasi-isolation, to which other powers will fill the void, a void and place that America may not be able to reclaim in the future.
In a Globalised world, economic nationalism will always have unforeseen consequences.
Thank you for taking the time to read this article. We appreciate it.
We have also written a number of books, which you can view here.
We have also created a number of digital resources, which you can view here.
You can also connect with me on:
[LinkedIn])tab:https://www.linkedin.com/in/josephdavidhenry/) Instagram Tik Tok and X