Some have described the election of Donald Trump as a “political earthquake.” That doesn’t begin to describe it. A more fitting analogy would be the asteroid that struck the earth millions of years ago, wiping out the dinosaurs and most other living species. The world was forever changed.
Sure, the sun came up the morning after Trump’s election and normal life resumed. People living off the grid would never know that anything had happened. But fasten your seat belts, folks. You haven’t felt it yet, but the blast wave from that asteroid strike is on its way. If Trump implements the trade policy he promised during the campaign, we’re in for a very rough ride. I’m afraid that few people really comprehend what’s coming.
Don’t get me wrong. It needs to be done. If Trump doesn’t do it, America will continue to be sucked into the vortex of the poverty-sharing scheme of globalization until we have nothing left. Incomes will continue to decline. Health care and college educations will become even less affordable. Forget any dreams of a secure retirement. Infrastructure will crumble further while the national debt soars.
So it has to be done, but entire economies – big ones – have been built on manufacturing for export to the U.S. Globalization won’t go down without a fight. It’ll begin with sniping from every corner of a vast network of globalization cheer-leaders that support their special interests, including the World Bank, the International Monetary Fund, the World Trade Organization, national leaders, CEOs of global corporations, the U.S. Chamber of Commerce and its local chapters, and economists who can’t come to grips with the notion that everything they’ve learned, taught and fought for was wrong. Based on past experience with presidents over the past several decades, it’s hard to imagine one that could withstand such withering criticism.
But that’s nothing compared to what will follow. It seems that Mexico is the first one that Trump has in his cross-hairs. They may try retaliatory trade sanctions, like big tariffs on food exports. But they don’t have the wherewithal to present real problems. China, however – who the Trump administration will turn its sights on next – is another story. They’ll try retaliatory trade sanctions first but, when you’re the nation with the huge trade surplus, it’s impossible for China to win a trade war. The thing that Chinese leaders fear the most is not the U.S., but civil unrest among its own people. Big tariffs on Chinese exports to the U.S. would shift the now-booming Chinese economy into reverse. Conceivably, it could collapse their economy.
The Chinese people have become conditioned to feel entitled to a booming economy and to preying on the U.S. market. They’ll be angry as hell and will demand action from their government. Rioting may break out. In its death throes and desperate to placate their demands, the Chinese regime may turn to military action. It’s impossible to predict how something like that might unfold.
There are those already saying that tariffs against Mexico can’t work – that forcing the manufacturing of American cars and parts back into the U.S. will only make them uncompetitive with other auto imports. And they are right. In order to succeed, Trump will need to expand the use of tariffs to include other countries like Japan, South Korea, Germany and others. Now we’ll have more unhappy campers who may be willing to form a new alliance against the U.S. Are Americans prepared for this?
And are they prepared for some gut-wrenching changes in our own economy? It’s true that tariffs will drive up prices for U.S. consumers and, in many cases, there are no American manufacturers ready to fill the void. It’s going to take some time to design, build and start up new plants. Will Americans have the patience to endure a burst of inflation and very likely a recession until wages catch up and offset the higher cost of goods, or have we become too spoiled for that?
I wonder if even the most strident Trump supporters have anticipated these ramifications and whether they’re willing to endure the pain. It’s easy to say “make American great again” but making it happen is going to be a long and very difficult process. It’s going to take a virtual war-footing mentality among Americans.
And what about Trump? Will he be a strong enough leader to maintain the support of the people through all of this? Based on what we’ve seen from Trump, we can expect that, when foreign leaders lash out at him, he’ll hit back just as hard. No one should doubt his ability to win. It’s the American people I’m more worried about. Will they be ready to jump ship at the first sign of adversity, or are they tough enough to stand by Trump and see this through?