The world is slowly awakening to a new reality. It has profoundly changed. And that may be an understatement.
Throughout the campaign, Trump’s “populist” rhetoric was dismissed by many – especially by those who stood to lose the most if globalization were dismantled – as exactly that, a play for votes or posturing designed to win concessions in the highly unlikely event that he would actually be elected president. After all, this is the author of The Art of the Deal, a book about his tactics for winning in the business world. He’s just staking out his opening position. Right?
During the transition, however, he doubled down on his rhetoric and stacked the cabinet mostly with people aligned with his positions. The world grew a little more nervous.
Then came inauguration day and, I have to admit, that even I was taken aback by his speech. It was as though he picked up a rhetorical two-by-four and began swinging at everyone who’d had a role in America’s trade mess and economic decline, and any who doubted his intentions or who stood in his way.
Now his first week in office is history, and what a week it was. TPP (the Trans Pacific Partnership trade deal) is dead. NAFTA (the North American Free Trade Deal) is as good as dead. The wall on the southern border will be built. Tariffs on Mexican imports will pay for it. Immigration from many Middle Eastern countries has been brought to a halt. And, in stark contrast to Obama’s visit to Mexico in the early days of presidency to discuss renegotiating NAFTA, a humiliating experience that yielded only more Mexican tariffs on American goods, Trump has put Mexico on notice. If you can’t accept the new reality of American tariffs on Mexican imports and an all-out effort to halt illegal immigration from your country, then too bad – we have nothing to talk about.
Some seem to get it. Some American companies have begun hedging their bets with announcements of plans to invest in American manufacturing. Still, the world is largely in a state of denial. Markets around the world continue to rally on optimism over the aspects of the Trump agenda that it likes – corporate tax breaks and infrastructure spending – while shrugging off the possibility that Trump means business about imposing tariffs on imports.
The world is made up of only two economies, really. One is the economy of the more sparsely populated countries, able to gainfully employ their workers, which is dominated by the United States. The other is the rest of the world, badly overpopulated and heavily dependent on manufacturing for export to the aforementioned countries – again, most notably, the United States. Tariffs on imports into the U.S. will totally alter the host-parasite relationship that exists between the two. Those who continue to blindly invest in the economies of the latter may be making a serious mistake.
Americans have finally gotten fed up with playing the role of enabler to ever-worsening overpopulation, using immigration as a relief valve and trade to prop it up. Trump has hastened the day when the rest of the world must face the consequences on their own.