Trump Chooses Chaos

Tariffs on China and Bolton’s arrival set off alarm bells

Up to now, Trump has produced a lot more rhetoric than concrete decisions. But his decision to impose tariffs on imports from China poses one of the most serious threats to international stability. Protectionism not only damages international trade and the global economy, but it also destroys the principle of multilateralism, which ensures that trade differences between states are settled at negotiation tables with appropriate arbitration, rules, guarantees and mediation. As soon as the president’s decision became known, stock markets plummeted (Wall Street fell by 2.8 percent), terrified of Beijing’s anticipated reaction to the tariffs. The cost of these tariffs is estimated to be between $50 billion and $60 billion. (China will probably ration imports of sorghum, soybean and pork, some of the sources of income for U.S. agriculture.)

Washington thus enters a phase of tense economic uncertainty, which can only be resolved by the administration’s return to the world order. This is the unexpected event, or the ‘black swan’ that could curb global growth this year. People feared this event would occur, and now it’s here. The imposition of tariffs is a paranoid exercise and an example of ignorance of basic economic principles. Everyone knows the effects: less growth for the country, more inflation in the medium term, and a loss of jobs. And this doesn’t include the damage that retaliatory measures will cause. But the main damage caused by this sheer nonsense from Trump is the chaos and uncertainty it brings into world trade. It alters the geopolitical board by unnecessarily antagonizing China and confirms the devastating idea that U.S. economic policy remains in the hands of the most radically protectionist components who have no wish to maintain the world order. It is upon this world order that peace, stability and economic growth have been based since at least the end of World War II.

The capture of U.S. foreign policy by the most right-wing, ideological, militaristic and nationalist sector of the Trump administration has been confirmed with John Bolton’s appointment to the post of national security advisor. Bolton was one of the hawks in the war in Iraq, and today he supports breaking the nuclear deal with Iran as well as military confrontation with North Korea. In a short space of time, his predecessor, Gen. H.R. McMaster, as well as Secretary of State Rex Tillerson and Gary Cohn, Trump’s chief economic adviser who opposed the trade war, have been dismissed. Such actions point toward a profound turn to the right and toward Trump’s aggressive nationalism.

Europe has breathed a sigh of relief to have been freed, temporarily, from the crazy steel and aluminum tariffs, without knowing much about what the rest of the journey will bring. But there is no doubt that it will suffer the consequences of the disorder that Trump has introduced, and that it should try to stop his administration from sabotaging world order and prosperity for all.