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IIn the short and turbulent time since Donald Trump made his quick speech about the trade policy in the White House Rose Garden, he did what even his bitterest critics could not provide – the global economy that is dangerously close to a recession, perhaps even a slump.
Even the 1917 Bolshevik revolution took a little longer to shake the world. It is difficult to exaggerate the far -reaching consequences of this sudden abandonment of US US policy to liberalize trade.
It is particularly striking that China refuted with 34 percent rates and filed a complaint with the World Trade Organization – a body that was effectively created by America, and that China eventually joined in 2001, an important moment in the spread of globalization.
No one can say where the statement of a trade war that on April 2, 2025 by Mr. Trump is made, we will not take. He proudly called it ‘Liberation Day’, when ‘the American industry was reborn, the day America’s Destiny was recycled, and the day we started to rich America again’. In fact, it was more like a reverse trade version of the Japanese attack on Pearl Harbor on December 7, 1941, a date that President Roosevelt declared famous “will be in notorious life”.
So far, the dramatic initiative of Mr. Trump on the way is to notorious.
It has wiped out trillions of the value of the world’s stock markets, and the distress is now spreading from manufacturing and resources sector to bank shares – which threatens a financial crisis. Many millions of people around the world have seen large sums from the value of their pension funds and other savings are wiped out.
This would not be the first time a crisis in the ‘real economy’ of trade and investment has caused a confidence in the financial system. The banks should be better prepared for a storm than in 2008. But any disruption of credit will further damage economic confidence, which adds a further reflection of the Trump tariff shock.
As so often, the president not only led wrong, but somewhat deceived about the present, the past and the future. In his speech on the day of liberation, he offers a great distorted version of the history of American Protectionism, and presents it as something that matches motherhood and apple pie, and an integral part of the American dream. The truth is that whatever role input taxes had to play in the development of the baby in 1789, their role in the Great Depression of the 1930s was to aggravate, extend and distribute its malignant consequences all over the world.
A repeat of this, or something, is what the world is now facing-and the tit-for-TAT rate residence is already starting. At one point in his remarks, Mr. Trump suggested that the notorious US Tariff Act of 1930, better known after its congress sponsors as the Smoot-Hawley Act, would have saved America from the slump if the rates had trapped. It is at best a partial reading of history. Historians can debate what effects the trade wars in the 1930s had on growth, employment, the rise of extremism and the coming of a world war – but the widespread acceptance of rates has worsened than otherwise.
The lesson was taught, and the post-war period introduced the first general agreement on rates and trade. The impressive growth in international trade that followed gave the world a whole unprecedented prosperity, and nowhere more than the abundant United States.
America did well from freer trade and globalization, most graphically demonstrated by its supremacy in technology. A trend away from manufacturing to services is a normal and welcome stage in the development of an advanced economy. There is no sense in America that makes its own cheap T-shirts again, as Mr. Trump wants, or even smartphones and electric cars. Even with rates on the levels, it would make more sense to get goods from East Asia.
Globalization, of course, contributed to China’s rise, but it did not harm America at all and made it the largest and one of the richest economies on earth. In the past few years, the US has enjoyed an enviable growth rates under successive presidents of both parties over the past few years. Americans live out their dream as a whole, and America is already ‘big’. That is why it is so bizarre and disturbing to listen to the president that he describes his country as ‘raped’, ‘looted’ and ‘requested’ by his trading partners.
It is fair to admit that some countries sometimes did not play fairly, dedicated the currencies manipulation and bowed the rules; But it did not hamper the growth of American wealth. To the extent that there are still malpractice, the response of Mr. Trump grotesque unveiled.
This week, the president of the United States has vandalized the global trading system, driven the world to another slump, rewriting history and turning economy on its head. This is more or less what he has already administered to America’s military and safety partnerships in his tilting to the Kremlin and away from NATO. At home, he made the constitutional norms and freedoms unpleasant and did so with depressing success.
In each area, Mr. Trump America back to isolationism, protectionism and nativism of a darker time in its history. In the case of trade, he creates a new mercantilism – a regime where politicians, rather than free markets and people, determine the economic activity of the country, with the guarantee that resources will be incorrect and made Americans poorer.
Mr. Trump likes to return to Ronald Reagan – he has a big portrait of the 40th president in the Oval Office, and has presented the slogan of the Gipper “Make America Great Again”. But Reagan, like Eisenhower, Nixon and the two President Bushes, would not realize what Mr. Trump does not do as even pragmatic common sense, let alone the right application of republican values. The madness must end.
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