WAR is very much on people’s minds today in Washington, DC, and New York City. Maybe it is a hot topic in Beijing and Moscow, too. There is certainly concern in Ottawa, London, Paris, Berlin and Mexico City.
Why is this so? Part of the explanation points directly to the foolish, callow and greedy actions of US president Donald Trump. At the end of last week he did several things that have unsettled markets around the world. He began the week by rattling his economic sabre at America’s NAFTA trade partners, Mexico and Canada. Negotiations with America’s two biggest neighbours and two of its three largest trading partners on the 20-year-old regional trade pact have not been going harmoniously.
Then, later in an eventful week, Trump did something for which there can be almost no reasonable explanation. He unilaterally announced a 25% American tariff on imported steel and a 10% tariff on imported aluminum. Markets sagged in New York and elsewhere. Respected economists in the US and especially Europe were quick to condemn the move, pointing out that its only justification could be campaign pledges Trump made during the 2016 election.
Republicans have championed free trade almost since the days of John Maynard Keynes. Free trade punishes market inefficiencies and may well compel national economies to make corresponding corrections. Democrats in the US, whose major constituency has been and largely remains organized labour, have been cooler toward free trade, but have not consistently fought against it.
Trump tramped around during the 2016 election boasting to workers in the depressed American Rust Belt that trade pacts had hurt them and that he would work to restore dilapidated US industrial sectors. In areas such as West Virginia, northeast Ohio, western Pennsylvania and much of the automobile industry-dependent upper Middle West, this played well. A plausible case can be made that this strategy won the election for him
But serious policymakers in important nations are speaking out quite forcefully against Trump’s latest impulsive foolishness. A trade war sparked by the impetuous, often thoughtless US president will almost certainly sabotage a heartening world economic surge which is likely founded on globalism and many of the very policies that Trump criticised for political gain. He has forgotten that he now represents the US national interest and that interest is most definitely not served by selfish, tariff-based international economic policies.
But the week was not limited to the dire economic consequences of Trump’s obdurate short sightedness. Potentially ominous news emerged from both Beijing and Moscow. In the Chinese capital, that nation’s constitution has been amended by the Central Committee of the Chinese Communist Party to rescind a two-term limit on the country’s president and vice president.
This means President Xi Jinping, who assumed the presidency almost exactly five years ago, may potentially serve indefinitely. As he has methodically aggregated power and influence during a political career that has seen him rise quickly through the Communist party ranks, Xi has revealed strong nationalistic tendencies and a propensity for aggressive foreign engagement.
There are reports that Xi admires his counterpart in Moscow. Vladimir Putin chose last week to announce a new weapons system he claimed could elude and penetrate existing US anti-missile defense systems. Whether this is actually true or not – many US observers are sceptical, at least for now – Putin’s own brand of strongly nationalistic aggression beyond Russian borders seemingly got a boost.
Putin’s continued assertiveness in Syria provides further evidence he may be starting to give up on Trump’s impressionability and foreign policy ignorance as a facilitator of significant Russian strategic and tactical advantage. There is little if any evidence that Russia plans to scale back its hostile attempts to manipulate American elections this year. Virtually every senior American national security policy leader has warned against just this. Only Trump appears to continue to keep his head in the sand.
It all adds up to a growing feeling of pessimism about the future of international economic and political relations. Things aren’t perfect now: There are active wars raging in Syria, Afghanistan and elsewhere in the Middle East. A deepening economic crisis in Venezuela threatens regional stability. Other crises persist. But hope for responsible American leadership recedes with each passing day.