That is counterproductive and dangerous
arrived in the Oval Office he promised to restore America’s might. His method has turned out to be a wholesale weaponisation of economic tools. The world can now see the awesome force that a superpower can project when it is unconstrained by rules or allies. On May 30th the president threatened crippling tariffs on Mexico after a row over migration. Markets reeled, and a Mexican delegation rushed to Washington to sue for peace. A day later preferential trading rules for India were cancelled.
Foreigners accept all this because, on balance, it makes them better off. They may not set the rules of the game, but they get access to American markets and fair treatment alongside American firms. Globalisation and technology have made the network more powerful although America’s share of worldhas fallen, from 38% in 1969 to 24% now. China cannot yet compete, even though its economy is approaching America’s in size.
First, instead of using tariffs as a tool to extract specific economic concessions, they are being continuously deployed to create a climate of instability with America’s trading partners. The objective of the new Mexican tariffs—fewer migrants crossing the Rio Grande—has nothing to do with trade. And they breach the spirit of. Alongside these big fights is a constant barrage of petty activity. Officials have skirmished over foreign washing machines and Canadian softwood lumber imports.
The damage to America’s economy so far has been deceptively small. Tariffs cause agony in export hubs such as northern Mexico, but even if Mr Trump imposes all his threatened tariffs, the tax on imports would be worth only about 1% of America’s. His poll ratings at home have held up, even as they have slumped abroad. His officials believe the experiment in weaponising America’s economic network has only just begun.
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