Tuesday, 7 August 2018

Trump's economic warfare

The administration of President Trump appears to be engaged in economic warfare: with everyone. Certainly, if there is a rational  underlying economic strategy, it eludes me.

There are, of course, some aspects of his tariffs and sanctions (and threats of such) that do make some economic sense. For example, Trump's demand that other Nato countries spend more on defence is clearly designed to increase the market for US arms manufacturers. Similarly, Trump's opposition to Nord Stream 2 is clearly designed to enable the US to sell liquid natural gas to Europe and to negatively impact the Russian economy by reducing its sales of natural gas.

However, much of Trump's imposition of tariffs and economic sanctions, rather than promoting US economic or even geopolitical interests, seem designed simply to harm others, and even economic interests within the US itself, and to push other countries into an alliance in opposition to US hegemony.

For example, the latest of the sanctions against Iran, which include the threat of secondary sanctions against anyone who has economic dealings with Iran, can only result in pushing Iran away from improved relations with western powers (which would have the assets in the US sanctioned) and into closer economic and political relations with China and Russia: the two countries the Trump administration identified as the greatest threats to US hegemony. On its face, Trump's economic sanctions against Iran are in direct contradiction to his administration's declared national "defence" policy.

The Trump administration is also engaged in using sanctions against an overt ally and long time member of Nato: namely, Turkey. This tactic can only result in other Nato members questioning the Trump administration's commitment to the alliance and inevitably reviewing the value of their membership of the organisation.

In a similar vein, Trump's imposition of tariff's on goods from US allies do not appear to directly assist US economic interests and indeed obviously result in direct harm to some US economic interests. Moreover, such actions have caused confusion and anger in foreign capitals, resulting in even ardent foreign supporters of the US demanding retaliatory measures.

This confusion seems to beset the Trump administration itself. Whilst imposing tariffs and sanctions, the US demands that the sanctioned countries should help the US in achieving its policy objectives. Even small children know, you cannot hit someone and simultaneously expect them to go out of their way to help you.

If there is a coherent strategy underlying Trump's tariffs and sanctions, it appears to be based on the notion that the US is the world superpower and can exhort any deal it wishes from whomever it wishes by dealing with each country separately. In other words, Trump seems to be determined to destroy the  multilateralism of the contemporary international order.

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