Plan B: Building a trading network rather than retaliating against Trump?

Monica's post offers up the reasoning behind Trump's tariffs but what is missing is the link between protectionism and post industrialism and the reasons why his approach will cause an awful lot of economic pain to the people who think they will benefit.
Basically, in post industrial countries the jobs and industries that have been outsourced to poorer countries are not the ones which will pay good wages and acceptable working conditions which is why migrant labour is often shipped in to do those jobs. Further to that, post industrial countries rely on their population being well educated, the US education is extremely poor compared to countries like Singapore, South Korea, Japan, Germany etc. Closing the federal Education Dept will not improve the standard of state education and reducing federal funds for scientific research (another DOGE mistake) will weaken the US in scientific developments which are essential to a post industrial society.
The US is also short of most of the minerals which are essential to modern technology so even if they can build the facilities for making advanced semiconductor chips etc (currently imported from Taiwan, China and other Asian countries) they will still have to import those minerals unless they can get them from Canada, Ukraine or Greenland!
Trump's approach to solving the problems that the US has is akin to throwing all the pieces of a jigsaw up in the air and hoping some come together, whilst a much more sensible approach is to build an initial framework by putting all the straight edged pieces together first! His tariffs won't work because they will cause huge inflation, probably a recession and will make the poor in the US even poorer. He's completely misguided because he wants to take the US back to it's industrial past and that's not possible.

Out of chaos will come order, I’m sure all countries will re-access their future, no more than China it has been allowed to manipulate agreements and the financial system, in a great many ways. Chairman Xi has had his own way for too long, playing by international rules is not going to be easy for him

Rather than 'undercutting' America, Freya5 China responded just as it was asked to.

As M0nica explained so well, all this goes back to the decisions made in the decade when Thatcher and Reagan were in power, during which they effectively handed our industries over to anyone who could make things cheaper.

In this country, not only were the coal mines closed without anything to replace those jobs, but vast areas—often in the Midlands and the North—were hollowed out by opening the floodgates to the cheapest sellers. America is 40 times larger than the UK, and their industries suffered in exactly the same way, leading to the creation of the Rust Belt, among other consequences.

It is evident that Trump has recognised the problem; however, it is his complete lack of political nous that is frightening. He behaves, unsurprisingly, just like Thatcher and Reagan. All he seems to care about is money and power, while the politics that maintain global stability appear to be outside his remit.

Like M0nica, I am advocating for a more restrictive import policy, working with countries we have long, historic ties with. But please do not think we have Trump to thank for this; it was already in motion—the EU was a step in that direction. We need this to be handled by those who have a political perspective. That way, we may avoid the dire consequences of abject poverty and war."

M0nica absolutely 👍

I tend to agree with MOnica. And in keeping one's eye on the ball it's important not to contaminate an evaluation of Trump's economic and political strategy with evaluation of his personal values, morals, history, etc., as many have tended to do.

M0nica

What Trump is doing is ending Globalisaton. Globalisation came in with Thatcher, Reagan and the Friedmanites and was based on one of the simplest economic theories that I learnt in my first weeks as a student studying economics.

Essentially this theory says that every country should specialise in producing what it can do easier/cheaper/faster than another country. If one country can produce 2 cars and 20 aeroplanes and another can produce 2 aeroplanes and 20 cars then it makes sense for each country to specialise and one produce 40 cars and the other 40 aeroplanes.

The downside of this is that what works in theory on a piece of paper or on a computer screen, doesn't work as well in the messy complication that is the real world. Mrs Thatcher was happy to see manufacturing destroyed in this country because other countries (China, SE Asia) could do it better and cheaper. She believed that we were much better, and better placed, to provide services to the world, financial, engineering, medical etc.

Except, that having little or no manufacturing has led to high unemployment, a lack of job security and far too many people having to work in the gig economy. The same is true of the USA. Huge previously wealthy, cities ike Detroit and Chicago have been destroyed, the car industry that provided their wealth, has disappeared to countries that can build cars cheaper - Like China, in fact manufacturing generally has moved to China, an enormous country with an enormous population, and because it dominates world manufacturing, it has a stranglehold on most countries and as we have seen recently because it makes most of the world supply of mobile phones, computers telephone systems, theycan use these to infiltrate national security systems.

I am beginning to understand where Trump is coming from and why he has the support he has. It is taken a maverick like him, to play on the real worries of Americans of lost jobs, lost opportunities, fear for a future and old age of poverty, to say that globalisation has not worked as it is meant to have.

It has pulled many in developing countries out of poverty, it has taken technology and manufacturing to many populous countries previously too dependent on agriculture and exporting raw materials. But it also enables individual countries to wield ecoomic power over others.

Colonisation and empire building in the modern age does not require occupying territory. All you need is economic power, look how the Chinese have been colonising Africa by loans of money for infrastructure, built by the Chinese so there is no technology transfer, to local people, now they are signing up mineral rights as a way for African countries to repay those loans, and using the power of these loans to get African countries to support it by voitng with them in the United Nations.

Do not get me wrong I deplore Trump as a person, and for everything he stands for, butI am beginning to understand the wheres and whys of his support and of the swing to the right politically throughout Europe. Globalisation has lifted many people out of absolute poverty, but made many people poor. It has brought immense wealth, but that wealth is concentrated in too few hands. It has stopped countries in Africa from developing a more industrial base and the political stability and prosperity that goes with it.

I suspect the world does actually need a period of protectionism, so that countries can balance their economies, so that large power blocs cannot dominate the world because other countries are dependent on them, for the basics of everyday living. We need a period when the welfare of individuals and indivdidual countries is put ahead of acquiring wealth.

And actually it needs a catastrophe like Trump to do it.

Sorry for a very long post.

Very interesting post, and what I have read in various articles.what I heard this morning, from America, was that China has been undercutting America for years, so it's no surprise that China has been hit with the hardest tarrifs.
Matt Goodwin called it hyper globalisation, an interesting read also.

Yes, very good post Monica.

I am beginning to understand where Trump is coming from and why he has the support he has. It is taken a maverick like him, to play on the real worries of Americans of lost jobs, lost opportunities, fear for a future and old age of poverty, to say that globalisation has not worked as it is meant to have.

Many people like strong leaders.
It went a bit out of fashion amongst women I think. I think it may be back again now?

I dont think I reaslised until this minute, that I am one of them, in essence. Hadnt thought of it in those terms before.

Is Starmer weak or strong?
I think his demeanor/character
is weaker.? That is how he comes across to me. But his actions have been quite strong up until now.
Probably help explain why I am in two minds about him.

Good post*Monica*. Another thing to remember is the media likes headlines and quiet thoughtful responses don't makes good headlines. I listen to interviews and they are generally trying to get a response that the interviewee clearly doesn't want to give. I'm sure there's lots of discussion going on which is being kept private for the time being.

Thank you MOnica for that informative post.

That makes a lot of sense M0nicaPerhaps some good might come of Mr. Trump’s unusual policies in a roundabout way.

Nail on the head MOnica 👏👏👏

What Trump is doing is ending Globalisaton. Globalisation came in with Thatcher, Reagan and the Friedmanites and was based on one of the simplest economic theories that I learnt in my first weeks as a student studying economics.

Essentially this theory says that every country should specialise in producing what it can do easier/cheaper/faster than another country. If one country can produce 2 cars and 20 aeroplanes and another can produce 2 aeroplanes and 20 cars then it makes sense for each country to specialise and one produce 40 cars and the other 40 aeroplanes.

The downside of this is that what works in theory on a piece of paper or on a computer screen, doesn't work as well in the messy complication that is the real world. Mrs Thatcher was happy to see manufacturing destroyed in this country because other countries (China, SE Asia) could do it better and cheaper. She believed that we were much better, and better placed, to provide services to the world, financial, engineering, medical etc.

Except, that having little or no manufacturing has led to high unemployment, a lack of job security and far too many people having to work in the gig economy. The same is true of the USA. Huge previously wealthy, cities ike Detroit and Chicago have been destroyed, the car industry that provided their wealth, has disappeared to countries that can build cars cheaper - Like China, in fact manufacturing generally has moved to China, an enormous country with an enormous population, and because it dominates world manufacturing, it has a stranglehold on most countries and as we have seen recently because it makes most of the world supply of mobile phones, computers telephone systems, theycan use these to infiltrate national security systems.

I am beginning to understand where Trump is coming from and why he has the support he has. It is taken a maverick like him, to play on the real worries of Americans of lost jobs, lost opportunities, fear for a future and old age of poverty, to say that globalisation has not worked as it is meant to have.

It has pulled many in developing countries out of poverty, it has taken technology and manufacturing to many populous countries previously too dependent on agriculture and exporting raw materials. But it also enables individual countries to wield ecoomic power over others.

Colonisation and empire building in the modern age does not require occupying territory. All you need is economic power, look how the Chinese have been colonising Africa by loans of money for infrastructure, built by the Chinese so there is no technology transfer, to local people, now they are signing up mineral rights as a way for African countries to repay those loans, and using the power of these loans to get African countries to support it by voitng with them in the United Nations.

Do not get me wrong I deplore Trump as a person, and for everything he stands for, butI am beginning to understand the wheres and whys of his support and of the swing to the right politically throughout Europe. Globalisation has lifted many people out of absolute poverty, but made many people poor. It has brought immense wealth, but that wealth is concentrated in too few hands. It has stopped countries in Africa from developing a more industrial base and the political stability and prosperity that goes with it.

I suspect the world does actually need a period of protectionism, so that countries can balance their economies, so that large power blocs cannot dominate the world because other countries are dependent on them, for the basics of everyday living. We need a period when the welfare of individuals and indivdidual countries is put ahead of acquiring wealth.

And actually it needs a catastrophe like Trump to do it.

Sorry for a very long post.

petra

I can’t see how Macron can swing this as no eu member country can negotiate a trade deal on its own or with another block.

It’s not coming from Macron as far as I know, it’s a collaborative effort- if anybody is ‘leading’ it’s Mark Carney, but as it would be mutually beneficial all EU states would be as involved as France, as well as UK, Australia, etc.

Seems like the only sensible idea, given that we’re dealing with a madman. The tit for tat with China has escalated, as is to be expected.
I never want to buy American again - trouble is my iPhone is up for replacement and I love it.

I can’t see how Macron can swing this as no eu member country can negotiate a trade deal on its own or with another block.

fancythat

How effective would that all likely to be, in reality?

It could be very effective for raw materials, as USA as far as I know isn’t the exclusive source for any of them.

I wouldnt do the begging negotiation.
True, he could get more punitive.
I suppose any Country can do that at any time.

More effective than sitting back waiting for more punitive tariffs or going with a begging negotiation to Trump.

How effective would that all likely to be, in reality?

DH and I were discussing a move such as this, over the weekend. I can’t really see a different option while the US have such a volatile person as President.

Yes, I have thought all along that this is the only way forward, rather than get into a ridiculous trade war, or try to appease America it makes more sense to outlaw Trump until the USA gets a more rational and cooperative leader.

I'm in agreement with seriously discussing this. Trump is aggressively punitively across so many nations thinking he can affect or destroy all our countries and we just let it happen.