Is it Foolish To Pretend To Reverse Globalization After Trump Impose Tariffs ?

When a leader tries to navigate against the wind of history, it is the whole country that runs the risk of shipwrecked in the storm. It is what American citizens must be thinking after Donald Trump's announcement of imposing burdensome tariffs on steel import (up to 53%) and aluminum (up to 23.6%). Because the first affected will be the consumers, who will have to pay an overprice for agricultural products, for example, or by others as common as beer or car that every day leads them to work. On the other hand, with the intention of supporting a part of its electoral base (the steelworkers), Trump would be hurting the industrial workers of other sectors, who also relied on his promises. For the time being, Wall Street has already reacted with strong falls to the decision of the American president, which can provoke a trade war between the US and powers such as Brazil, Canada, China or the EU.

The measure will have caught very few by surprise, because it was part of the protectionist program with which Trump won the election. It is a consequence of America First, which although it can benefit entrepreneurs and workers in the metallurgical sector, which needs a deep re conversion to be competitive at the global level, can also have consequences for many other sectors. First, because of the rising cost of production, which, coupled with the increase in wages, could generate a negative impact in the form of loss of efficiency, in American industry. But also, because of the reprisals that the affected countries would legitimately take against what they rightly consider to be a challenge on the part of the US.

The European Union has already warned that next Wednesday it will analyse the negative consequences that this resolution may have for its companies and the measures to be taken to counteract it. The President of the Commission, Jean-Claude Juncker, warned that the EU is not going to stand idly by and see how thousands of jobs and the viability of hundreds of community companies are put at risk. 15 years ago, the Bush administration threatened a special 30% tax on steel from Europe, which finally did not apply to Brussels ' firmness of responding with the same forcefulness. It is to be expected that Trump rectify on time and everything remains in an outburst to which we are accustomed to the populist leader.

Because the consequences would not only thin US-EU relations. Trump's announcement is an open trade war declaration against several of its allies, such as Canada, Brazil, South Korea, or Mexico, and especially against China. The Communist power, which owns much of the US debt, exports large quantities of steel and aluminum annually to the US, and such high rates would be hard to bear and assume without any proportionate response.

Trump has invoked national security reasons to boost the renewal of the country's industry and incentive its own raw materials in major infrastructure projects and in the military industry. But these protectionist measures, which could be effective at other times in history, are currently lacking in viability. Economic globalization, which is in an advanced state of development and has generated a high level of well-being for most of the world's population, cannot be reversed, and less capriciously. Applying nationalist criteria to increasingly delocalized production processes implies creating misalignment that could cause collapse situations with unexpected effects. Today, the market is global, both agricultural and industrial production and financial flows. Navigating upstream is going against economic progress.