Why Trump’s Protectionist Economic Policies represent the most significant threat to the global economy and what you can do about it.
Please briefly comment why you chose the answer you did: “”
Why Protectionism is kind of a big deal: It is possible to argue that any of the above in the poll represent the most significant threat to the global economy, but I strongly believe that Donald Trump’s trade policies, namely abandoning the TPP in favor of a set of protectionist tariffs, are the gravest threat to the global economy and might lead to the most significant depression in history. The TPP’s economic gravity was insanely immense, as the deal started off with just America, and four tiny south east Asian countries including Brunei, Singapore, New Zealand, and Chile. However, the deal eventually came to include several trillion dollar economies, including Australia. Trump’s abandoning the deal is essentially abandoning a massive opportunity for cheaper imports and destroying the export opportunities of a multitude of countries. This, in addition to Trump’s promise for higher tariffs on imports to the United States is a recipe for disaster. Washington Post journalist, Simon Denyer: Trump “sees trade as a zero-sum game, and sees anyone ‘beating’ the United States as a threat.” Historically, this zero – sum attitude toward trade has led to global problems. For example, the Smoot Hawley Tariff, passed in 1930, is arguably responsible for the American Great Depression as well as the global economic depression in the 1930’s. Trumps protectionist economic plan will likely have the same effect, perhaps on a bigger scale. Trump has argued that his tariffs are necessary as the United States is in a trade deficit with a considerable amount of countries it trades with. However, a trade deficit simply means that the country with the deficit has the economic capability to import more than it exports. In America, prices will sky rocket as global competition decreases. Less Chinese trade with the United States will have a domino effect, as when the Chinese economy begins to plummet, the economies of Chinese trading partners, such as Australia and Korea will begin to plummet. With the lack of American trade, prices will also increase in these countries, halting economic progress.
In addition to grave economic consequences, Trump’s trade policies have geopolitical implications as well: While the above are all significant threats, American protectionist policies, if implemented, might be the greatest threat facing the world today. From the standpoint of American foreign policy, Trumps abandonment of the TPP in favor of protectionist policies lessens the United State’s presence in Asia. Former secretary of defense Ash Carter claimed” that the passage of the TPP is as important as adding another aircraft carrier.” He meant that this trade deal is necessary for containing China, as one of the United States unstated goals with the TPP is to increase the economic power of the smaller Asian countries such as Vietnam, so they are able to better compete with China. Trumps protectionist economic policies therefore enforce a unimodal Asia with China as the hegemon with limited competition. This is bad for the United States interest in Asia. Trumps protectionist economic policies will foster economic regionalism, as trade among Asian countries will increase with the lack of US presence in the region. In 2009, Obama tried to impose tariffs of Chinese tires, but a minor trade battle broke out in which China responded with a over 100% tariff on Chicken feet from the US. Trump’s tariffs will result in a trade war of a larger scale.
These video explains why protectionism is bad for economies in depth:
Is there anything I can do about it? Unfortunately, it seems that countries are accepting that the TPP is dead, and are accepting the inevitability of American tariffs. However, Americans can still elect senators that support free trade and that are anti protectionism. This issue transcends party lines; while the Republican Party is traditionally pro free trade, people within the Democratic and Republican Parties have different opinions. The best way to get involved is to actively support candidates from whatever party who are against Trumps Tariffs and trade plans. The media has been largely silent on this issue, choosing to report on Russian involvement in the election and on the conflict in Syria. Thus, we have the responsibility to raise awareness.
Ben Sasse, A republican, supports free trade, despite being in Donald Trump’s party.
Prices will increase the most for the following items:
Thinking about getting wasted in college? According to many sources, the price of Mexican Alcohol and fruit will increase especially if Trumps Tariffs are implemented.
The price of cars will increase drastically also, as companies will be forced to make them in the United States. Many argue that protectionism will better the economy since jobs will be “brought back,” but in reality the net gain from having lower prices is higher than the few jobs “brought back.”
Sources and Further Information: