Do Trump’s Policies Make Sense?

 By Henry Srebrnik, Moncton Times & Transcript

The United States emerged from the Second World War as the leader of the free world. As America projected its power around the globe, it spent the post-war decades remaking much of the world in its own image.

Donald Trump is the first U.S. president since then to challenge the role that his country set for itself. Truly a tornado, in a matter of weeks he has upended the so-called “rules based international order.”

In his first few months in office, Trump has expressed a desire to bring Canada, Greenland, the Panama Canal, and the Gaza Strip under direct American control. He suggested that Ukraine provoked Russia’s invasion, and bypassed Kyiv for direct peace talks with Moscow. He has also expanded his trade offensive against China. Many foreign policy experts who have long feared that the U.S. under Trump is abandoning its role as a defender of democracies and aligning with autocracies like Russia think it is now indeed coming to fruition.

“We have seen events of world-historical proportions. The United States has switched sides. It was long the anchor of global democracy, and while its foreign policy sometimes did not honour its own values and principles, it was nevertheless a pro-democratic power that was deeply committed to the protection of its democratic allies,” remarked M. Stephen Fish, a political scientist who specializes in democracy and authoritarianism at the University of California at Berkeley.

“It’s hard to see the United States ever recovering its power and prestige,” Fish added. “The influence that it has enjoyed over the last 80 years have all been squandered by Trump.” 

This is no new thing. Nearly 40 years ago Trump took out full-page advertisements in three American newspapers to criticize the United States’ commitment to the defence of the world’s democracies. The Trump White House has said it will no longer be the primary guarantor of European security, and that European nations should be responsible for their own defence.

He has long vocalized his opposition to NATO’s Article 5, the collective defense clause, which stipulates that other NATO allies must come to the defense of a member country if it is attacked. He has often claimed that NATO countries are taking financial advantage of the United States by failing to meet a requirement that members spend at least two per cent of their gross domestic product (GDP) on defense. He has repeatedly stipulated he would only supply protection to members who are willing to meet agreed defence spending targets.

The damage Trump has done to NATO “is probably irreparable,” contends Robert Kagan, a conservative commentator and senior fellow at the Brookings Institute in Washington. “The alliance relied on an American guarantee that is no longer reliable, to say the least.” Yet eighty years of reliance on the United States has left many European democracies exposed.

Not content with disrupting the transatlantic security relationship, Trump has also upended the global economy. Trump’s foreign policy when it comes to trade is one that has publicly rejected globalism and, in his words, has “embraced patriotism.” His “America first” policy treats international relations as a zero-sum game where there can only be one winner.

This means increased tariffs from the United States; the creation of trade blocs; the use of economic coercion, including import bans and financial sanctions; severe restrictions on immigration; and, finally, industrial policies with the implied subsidization of domestic producers.

Trump contends that the global trading system has been rigged against U.S. interests and is responsible for large trade deficits, declining U.S. manufacturing, and the offshoring of American jobs, resulting in the hollowing out of the middle class. He promises to return the United States to the “manufacturing superpower of the world” through “rebalancing trade” towards domestic production.

Vice President JD Vance contended in a speech recently that globalisation has failed because the idea was that “rich countries would move further up the value chain, while the poor countries made the simpler things.” As that has not panned out, especially in the case of China, the U.S. is moving away from universalism and internationalism into mercantilism. Trump fits that mold almost perfectly.

The Trump administration is pursuing an age-old economic policy called import substitution industrialization (ISI). That policy is based on a theory that an economy can stimulate growth in its industrial sector using tariffs and numerical quotas on imports to protect domestic “infant industries” from foreign competition.

Tariffs, Trump asserts, will encourage consumers to buy more American-made goods, increase the amount of tax raised and lead to huge levels of investment in the country. They will level the playing field and protect American workers from foreign labour, who often work in slave-like conditions for next to nothing. They will create jobs by reshoring foreign factories to America. For five decades, after all, America has embraced the globalist experiment and has lost over six million manufacturing jobs.

No nation of the scale and global importance of the United States has ever adopted such an ISI policy regime. Many economists fear that such a policy would throw its major trading partners into recession. So what? thinks Trump, that’s their problem.

One thing is certain, though: America’s current policies have landed the country with a $37 trillion federal debt and a $2 trillion annual deficit. That is not sustainable.