Global Pairings, Rethinking America

Is There Method to Trump’s Trade Madness?

Why are Republicans siding with Trump’s trade war? Is it because they are dead-set against the European economic model which seeks social balance?

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Takeaways


  • Republicans’ disgust with economic models other than their “you’re on your own, buddy” ideology does not end at America’s borders.
  • Why are Republicans siding with Trump’s trade war? Is it because they are dead-set against the European economic model which seeks social balance?
  • What if Americans ask for universal health care, paid vacation of more than two weeks, free education, paid maternity leave and many other basic benefits that are commonplace in the EU?
  • To protect their core clientele, Republicans must make sure that the economic feudalism that still pervades the US doesn’t just continue, but is preferably still expanding.
  • Given the profound lack of any sense of social responsibility, the diminished welfare of the American people is just collateral damage that Trump and his Republican Party readily accept.

One should always be leery to interpret Donald Trump’s policy moves as being guided by any consistent ideology. As for the Republican Party as a whole, that is quite a different matter. They are very conservative and hyper-ideological.

And this may explain why Congressional Republicans, traditionally ardent defenders of open trade, are completely caving to Trump’s tariff onslaught.

To many of these Congressional Republicans, Trump’s tariffs come in handy — to register their displeasure with an economic model that aims for social balance.

Republicans’ disgust with economic models other than their “you’re on your own, buddy” ideology does not end at America’s borders. This is why they stay so silent on Trump’s trade war.

Real-life evidence

In an unprecedented breach of diplomatic protocol, the new U.S. Ambassador to Germany, Richard Grenell, openly admitted to the subversive U.S. tactics when he commented in an interview with the far-right U.S. news outlet Breitbart a couple of days ago and said:

I absolutely want to empower other conservatives throughout Europe, other leaders. I think there is a groundswell of conservative policies that are taking hold because of the failed policies of the left.

Move over Vladimir Putin, the United States is now actively trying to influence European elections.

The big fear

These Republicans have an existential fear – and rightfully so – that Western European economies that are successful exporters and focus on social balance at the same time (think Germany and the Netherlands) might send a wrong message to the American workforce.

After all, Republicans have looked for years at certain EU countries’ exporting success with great concern. Here is why: On the one hand, U.S. politicians love to describe U.S. workers as the “most productive” workers on earth.

They also refer to their country, not least thanks to its ample natural resources, as the richest on earth.

On the other hand, the economic benefits in this economic wonderland are very unequally distributed. This isn’t just a matter of crass income inequality, but of the social benefits which the middle class ought to enjoy in such a glorious land.

And indeed, it is becoming ever harder to explain to the population at large why many Americans aren’t receiving paid vacation lasting for more than two weeks a year, or benefit from free education, paid maternity leave, truly universal health care and many of the other basic benefits?

The Republicans’ horror scenario? Imagine Americans asking in earnest for these benefits.

Those benefits are commonplace in the EU – and still a mere dream for most people in the United States. That is why Republicans love Trump’s constant talk about the EU out-subsidizing and “cheating” the United States.

Disrupting Europe’s social market economy model is the plutocrat party’s real target and any means will do. To protect their core clientele, they must make sure that the economic feudalism that still pervades the United States doesn’t just continue, but is preferably still expanding.

Taking advantage of America?

No wonder then that Trump and his coterie of nationalist advisers, all elderly white men, combine this torched earth strategy with the claim that countries like Germany and Japan have taken advantage of America’s generosity after World War II.

According to Trumpian folklore, these countries have cheated the United States by “forcing” their goods into the U.S. market and robbing U.S. workers of their jobs.

That German firms don’t operate on a lower cost basis than their American competitors, because German wages and benefits are higher than in the United States, is something that Trump and his Republicans ought to know, but either don’t or blatantly disregard.

What is left unsaid is that Trump and his followers engage in such blame games precisely for the purpose of not having to change the top-down economic formula they so rigorously defend at home.

The American worker will suffer

The rhetorically much-heralded American worker is going to be the real loser in all this. It is already clear that the job numbers created by all those “beautiful” new plants Trump sees being built in America are going to be puny. After all, we live in the age of robots and automation.

The only safeguard in protecting workers’ wages – a sensible degree of unionization and steady skills training embedded into the corporate culture – are a complete anathema to most U.S. firms and their Republican political protectorate. Under those circumstances, it is no wonder that U.S. real wages have been stagnant for decades.

Given this profound lack of social responsibility, the diminished welfare of the American people is just collateral damage that this President and his Republican Party readily accept.

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About Stephan Richter

Stephan Richter is the publisher and editor-in-chief of The Globalist. [Berlin/Germany]

About Uwe Bott

Uwe Bott is the Chief Economist of The Globalist Research Center. [New York/United States]

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