Donald Trump’s tariffs are part of a desperate attempt by a declining America to cling to its position as the world’s most powerful nation by using its economic heft to coerce rivals and allies.
Over the weekend, Donald Trump made good on his promise to impose trade barriers on key US trading partners. Citing the influx of narcotics and “illegal aliens,” the president announced plans to slap a 25 percent tariff on goods from Mexico and Canada (with a 10 percent carve-out for Canadian energy imports), while Chinese goods received a blanket 10 percent in addition to the levies already in place on imports from that country.
As economic policy tools, these measures are misguided. In addition to heightening the economic stress of domestic households, they will likely fail to permanently alter the trade deficit, the reduction of which is central to Trump’s neoprotectionist ambitions.
The geopolitical logic is as unsound as the economic one is unclear. The discrepancy between the tariffs on the United States’ immediate neighbors and the additional ones on China, which the elites of both parties identify as their main geopolitical rival, raises the question of what this opening salvo of the trade war is supposed to achieve.
Getting Your Friends in Line
It is possible that the consolidation of US power in the Western hemisphere, by tightening influence over resource-rich Canada (and possibly Greenland), is aimed at shoring up the United States’ position relative to China in the long term. But the absence of any sort of ultimatum or concrete demand — such as, say, a demand to reduce trade with China — makes this unlikely. Though initially citing the influx of fentanyl and immigrants as the main concern (neither of which would be stopped by trade barriers), Trump took to social media to decry trade with Canada as a subsidy and restate his call for the US to annex its northern neighbor.
Beyond the bluster and bellicosity, the aim of maintaining and expanding America’s full-spectrum global dominance — evinced by both MAGA and its thinking-people equivalent, Bidenomics — in the face of domestic social decline is consistent with the notion of tariffs not as tools merely for the coercion for rivals but primarily for the disciplining of allies, both at home and abroad.
Perhaps Trump views this kind of coercion as the more expedient path to rebalancing US trade without jeopardizing the lucrative capital inflows on which the rents of the oligarchic class, among them his selectorate, depend. Above all, however, it seems to coalesce more power in the hands of the executive. Perhaps the most plausible theory of Trump’s tariffs, then, is a psychological one, in which the greater political-economic goal of “Making America Great Again” is subordinated to his almost Nietzschean desire to accumulate personal power.
America Contra Mundum
In the long run, however, this approach might prove to erode US influence. Trump’s anti-globalist, unilateral heavy-handedness is already resulting in pushback and might give impetus to the formation of a broad anti-American alliance. Retaliatory trade barriers, the regulation and penalizing of US entities in foreign markets, and geopolitical isolation could follow.
But such an alliance is unlikely to be successful in the short run. Among its allies, the quest to reduce security and trade reliance on the United States will require Western liberal elites to choose between accepting policies antithetical to the values they proclaim to defend, or openly defying US power — two options considered anathema. Above all, however, with Europe’s fractured politics and endless fiscal consolidations continuing to stifle its economies, and China adjusting to the fallout from a collapsing asset bubble, the United States retains an advantage by having in abundance the global economy’s most valuable assets: net demand and energy security.
Being the largest fossil fuel producer in history, whose households are the global consumer of last resort, is a strong position from which to start a trade war — whatever its motives turn out to be. Trump has seemingly resolved to be the first-moving disrupter, knowing that the US is the most capable of absorbing global systemic disruption. The final chapter of the American century will not be brief.