Can you demolish the world economic order twice?

 

 

Quinn Slobodian>>

Can you demolish the world economic order twice? The first time Trump was elected, there were dire prophecies about how his policies would affect global trade. His tariffs would destroy the world economy, we were warned—even by people who had for years warned us about the excesses of globalization. Joseph Stiglitz called the US withdrawal from NAFTA a “nightmare scenario.” The rollout was indeed pretty chaotic. China was the main target, but Canada and the EU ended up in the crosshairs for apparently infringing on America’s capacity to produce enough steel and aluminum to protect its own national security. It got arcane quickly. The EU imposed retaliatory tariffs on Harley Davidson motorcycles and bourbon. It was like a first-year macroeconomics class in reverse: as if England wanted to make its own wine and Portugal wanted to make its own cloth. Wasn’t this irrational? Even worse, wasn’t it inefficient?

Yet the political sense of the trade turn soon became clear—and not just to team Trump. Trade policy would be the most obvious continuity between his administration and Biden’s. Progressive pundits praised Trump’s trade representative, Robert Lighthizer, as his “one good appointee,” and there were whispers that he might make it into the new administration. By 2021 tariffs had been rebranded as the royal road to a just energy transition. In rhetoric, the break with the free trade consensus—however incomplete the bond had been in the first place—seemed total.

What should we expect, now that Trump’s logic of hyperbole has forced him to escalate by talking about tariffs of up to a thousand percent on products from China? We should probably listen to his allies when they say that these are the negotiation tactics of a madman rather than concrete policy proposals. Indeed, trade might be one of the policies on which one administration and the next differ least. Abandoning the pretense of green capitalism will allow Trump to pivot back to the carbon- and extraction-driven development that has always underpinned modern American growth. It will hasten the euthanasia of ESG and accelerate the return to the high times of asset price inflation and share buybacks that characterized both Democratic and Republican administrations since the financial crisis.

Industrial policy will be conducted once again by tax breaks rather than subsidies. Lighthizer will return, perhaps as treasury secretary. The World Trade Organization, born in 1995 and useful only insofar as it delivered on American goals, will continue its senescence and likely early interment before it reaches middle age. Badly needed debt relief for the global south will lose any chance of US support. Trade will be nakedly transactional, with the thin silver lining that a space could be opened for at least rhetorical attention to globalization’s effects on deindustrializing heartlands.

Will any of this lead to greater social justice or reduced inequality? There’s no reason to think so. With the rise of J.D. Vance, National Conservatism’s claim that the GOP is the new party of the working class has been realized at the ballot box—but there’s no sign that it will flatten the country’s ever-steeper hierarchies of wealth. Think tanks of the libertarian and post-neoliberal right will jockey for proximity to the president while the man himself remains focused on the one thing he has always excelled at: going bankrupt and still coming out on top.