Macroscope | The world must accept that Trump firmly believes it needs the US, more than the US needs it
If the rest of the world won’t dance to his tune, the new president is perfectly prepared to pull up the economic drawbridge
If Asia, and indeed the rest of the world, is to get to grips with US President Donald Trump’s apparent agenda on currencies, jobs and trade, then it is important not to think of him as a maverick but rather to recognise that Trump’s positions, at least on economic policy, fit into a historical narrative.
It would currently appear he believes that his nation can essentially be economically self-sufficient, that the rest of the world needs the United States more than America needs it, and that if the rest of the world won’t dance to his tune, then the US can pull up the economic drawbridge.
And while such a stance might be deeply unpalatable to liberal thinkers around the world who have championed free trade and globalisation, it is a position that will resonate with Trump’s electoral base and that borrows from policies adopted by previous US presidents going back almost a century.
Trump’s talk of an import tax which, while intended to stimulate US job creation would lead to US consumers paying higher prices – echoes of earlier measures, notably 1922’s Fordney-McGumber tariff and the 1930 Smoot-Hawley Tariff Act.
The latter legislation provoked retaliatory measures from the US’ trading partners and, contributed to the creation of the conditions in which the Great Depression of the 1930s unfolded.