Trade Trumped

The announcement by US President Donald Trump of

tariffs on imports of steel will resonate in economic history.

The tariffs themselves are being imposed on “national security” grounds, a justification supposedly reserved for wars or national emergencies.

The measures threaten to set off a series of retaliatory measures by Canada, the European Union, Japan, South Korea and other nominal allies of the US, as well as China.

The measures recall the Smoot-hawley tariff of June 1930, which played a significant role in the economic – and ultimately military – conflicts of the ensuing decade.

Former International Monetary Fund economist and now Cornell University economics professor Eswar Prasad said the Trump moves “herald a declaration of open war on major trading partners and undercut the multilateral trading system”.

This could lead to “a period of open and aggressive trade hostilities with some of America’s major trading partners” and undermine the rules of the WTO, which the US was instrumental in forming.

These far-reaching implications for geo-economic and strategic relations are not simply the product of the chaotic and conflicted Trump White House.

They are the outcome of the protracted decline of the US in relation to its old rivals and new challengers, which it is now attempting to reverse by lashing out against both its perceived enemies and nominal allies with economic, and ultimately military, measures.

ALAN HINNRICHS

Gillespie Terrace, Dundee