Trade wars and an arms race will give way to world disorder


The month of March began with a sinister sense of déjà vu at a global level. US President Donald Trump’s threat to drag the world into a trade war, which in his opinion is “a good thing,” and Russian President Vladimir Putin’s flamboyant unveiling of a new generation of nuclear-tipped intercontinental ballistic missiles (ICBMs), which in his view are “invulnerable to enemy interception”. The announcement, coming weeks before Putin is slated to win another term as Russia’s president, is seen by analysts as setting the clock back to an era of superpower arms race amid growing fears that the world may be entering a new cold war.

In his commitment to his own mantra of putting “America first”, President Trump has been consistent in at least one thing, fulfilling the campaign promises that appealed to his core voter base. Among the things he repeatedly said is the unproven and controversial allegation that when it came to free trade, America was being swindled by its allies and foes alike. His populist-driven response would be to renegotiate multilateral trade agreements, such as NAFTA, and to protect beleaguered US industries, such as steel, oil, auto and coal mining.

And, surely, he did take a couple of steps towards that endeavour last Thursday by announcing that he was about to impose a 25 per cent tariff on steel imports and 10 per cent on aluminum. Two days later, amid strong rebukes from America’s closest allies and China, the president threatened to increase custom duty on cars imported from the EU. Whether he will make good on his threats later this week remains to be seen.

He justified his hard-hitting position on global trade in a number of tweets, one asserting that the US has “$800 billion yearly trade deficit because of our very stupid trade deals and policies. Our jobs and wealth are being given to other countries that have taken advantage of us for years. They laugh at what fools our leaders have been. No more!”


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