As ever Trump is a figure of polarisation and the left's lightening rod . It's difficult to be balanced in such a partisan atmosphere and or an environment wherein one has to be for or against a particular subject matter, lest you be branded medieval style as an evil Trump bigot or a traitorous globalist.
There are several things to note ,though, and factually
1. The US was the one who created the current international order after the second world war, has benefited from it enormously and of course dominates the key institutions that were created as a result, such as the IMF, Bretton Woods (which made the global currency the US Dollar in all but name) , the world bank and the UN. These were NOT imposed externally by someone else onto the US, but were created by her and for her benefit.
2. The trade deficits of the US don't matter to the US as they do in other countries and this is partly why they are there . This is because the dollar is the global currency of trade. Hence the US can impose sanctions on any country and others fall in line. But more importantly when a country runs a massive trade deficit it either has to borrow to pay for what it needs in the short term , but eventually ends up facing a balance of payments crisis where that funding dries up and the balance snaps back into a realistic equilibrium . The US does not have to worry about any of this , because of their currency, so in extremis can borrow from itself at low cost.
3. The US heavily subsidises it's own agricultural base as does the EU and most other nations. Likewise anything deemed to be a strategic concern to a sovereign state is going to get more attention or support from a state. There is no country on earth who applies a purely free trade regime as envisioned by Adam Smith.
4. America and Europe , Canada etc have pretty low tariff barriers in non agricultural areas . Therefore it is worth the President asking why does the world not buy enough of our products ?
5.Furthermore tariffs and subsidies are negated by multinational companies. Rather than export vehicles to America from Japan or Germany, simply make the vehicles in America (which is what happens). The only thing is that the profits from these multinationals return back to the mother country. As people may or may not know the American tax regime is complex and has a higher rate of corporate tax than other governments impose. Thus American multinational companies do not repatriate all of the profits from overseas subsidiaries and this in turn effects the balance of payments statistics.
Finally is Trump engaging in the "madman" theory of diplomacy or is he just mad? I personally think he is simply acting as if international diplomacy is another reality tv show or New York property deal. In short he has to be the centre of gravity and also to win, but not just win, but be the only one standing while whoever is in his way is lying on the floor out cold.
This is also reflected in his desire to be lauded as an imperial figure , hence his delight when certain states have rolled out a massive red carpet and his personalized view of other heads of state, who are called by first names and analysed on whether they're strong or weak : "Justin", "Emanuel" and "school mam" ....along with a volcanic temperament which quickly changes from positive to outright hostile if he feels he's been slighted or challenged. But alongside this is some massive self regard that thinks everything is like a New York property deal that he can win. Unfortunately not all of the world's problems or just American problems can be solved that way .
No comments:
Post a Comment