The Trump doctrine will make the world poorer

Donald Trump, America’s new president, is a man of his word. He has shown conclusively that he will keep his election promises. Within a week of assuming office on 20 January, he started to dismantle the legacy of his predecessor, Barack Obama. He ordered the repeal of Obamacare, withdrew the US from the Trans-Pacific Partnership (TPP) and stopped negotiations on the Trans-Atlantic Trade and Investment Partnership (TTIP). He authorised funding cuts to UN agencies, and indicated he would withdraw America from the Paris Climate Change Agreement. Further, he ordered the building of a $12 billion wall on the Mexican border, and said it would be paid for with a 20% tariff on imports from Mexico. Just over a week ago, President Trump signed an executive order restricting refugee admissionsto the US and imposing a temporary visa ban on travellers from seven Muslim-majority countries.

All of these actions, and others that will follow, were, of course, Trump’s campaign promises in last year’s presidential contest. Indeed, as he said recently, he won the election precisely because of them. And, really, all he’s been doing is simply to make good his campaign pledges. Think of it, as a democratic principle, isn’t President Trump, duly elected under the US constitution, entitled to deliver on the promisesthat won him the office?

Of course, he is. But here is the rub. An American president is unlike any other. His actions have repercussions beyond US borders. A US President is not called “the leader of the free world” for nothing. He has a global responsibility to help ensure the security, stability and prosperity of the world. This is why President Trump cannot simply govern for his domestic supporters only. Now that he is in power he should consider the consequences of his actions onthe domestic and international economy, security and politics. Yet, it isexactlyfor these reasons that the Trump doctrine gives cause for concern.

Most American presidents have a doctrine named after them. You have, for instance, the Nixon Doctrine, the Reagan Doctrine, the Clinton Doctrine, and, of course, the Obama Doctrine. In the context of international affairs, adoctrine, according to the Penguin Dictionary of International Relations, is “a body of beliefs, principles or guidelines to inform policy formulation and conduct”. So, what is the Trump Doctrine? Well, the president set it out clearly in his inauguration speech. “From this day forward, a new vision will govern our land”, he declared. “From this moment on, it’s going to be only America first, America first”.

To be sure, the“America first” doctrine is not new. It dates back to the start of the Second World War in 1939, when some Americans formed “the America First Committee” to lobby against US involvement in the war. But, as the British writer Daniel Finkelstein recently pointed out,after Japan attacked Pearl Harbour in 1941, the US was forced to join the war, which ended the America First Committee. The slogan was, however, resurrected in 1992 by Pat Buchanan, who vied for the Republican Party presidential nomination against George H W Bush. In his campaign, Buchanan described Bush as a globalist and himself a nationalist, vowing to “put America first”.This globalist/nationalist divide is central to Trump’s “America first” doctrine. As Stephen Bannon, President Trump’s highly-influential chief strategist put it, “I am an economic nationalist, not a globalist”. He described both himself and Trump as anti-globalists, who take a dim view of immigration and free trade.

Indeed, in his inauguration speech, President Trump said that “protection will lead to great prosperity and strength”. The economic historian Niall Ferguson quickly pointed out that “a whole library of economic history implies protectionism could backfire badly”, while the London Times editorialised that “protectionism would be a retrograde mistake”. But Trump is adamant, insisting that his administration would follow two simple rules: “Buy American and hire American”. In a recent interview, President Trump complained that there were more German cars on US streets than US cars on German streets, to which the German vice-chancellor, Sigmar Gabriel, retorted: “the US will have to build better cars” to change that!

Of course, “America first” has a ring to it. Woe betide the leader who doesn’t say it is his or her country first. That, after all, is what’s called the national interest. The trouble, though, is that the national interest is not an objective reality. It is what politicians say it is at any point in time. But if the national interest can be determined subjectively, or shaped by populist sentiments, it’s important that a leader’s view of what constitutes the national interest should be critically and evidentially examined, even if the leader is democratically elected.

For instance, most respected economists have said that, despite the challenges they pose, globalisation and free trade have, over the past 50 years, served America well. Indeed, according to a study published in Douglas Irwin’s book, “Free Trade Under Fire”, nearly 70% of Americans believe that free trade is good for the US economy. Furthermore, virtually every other major country believes free trade is in its national interest. For instance, the British Prime Minister, Theresa May, has said that post-Brexit UK would be “the champion of global free trade”. The German chancellor, Angela Merkel, said “We must defend free trade”. Even China, not exactly a model market economy, has positioned itself as a strong advocate of free markets, with President Xi Jinping saying at this year’s World Economic Forum that “China would be a beacon of free trade and a champion of globalisation”. Clearly, President Trump’s definition of America’s national interest in protectionist termsdoesn’t have history, evidence and international support behind it.

A protectionist “America first” policy will certainly hurt the US at home. But it would also have wider ramifications far beyond America’s shores, at least in three ways. First, slapping tariffs on foreign goods, say, 45% on Chinese imports, as Trump vowed, would provoke retaliations and threaten trade wars. But, as the Chinese president said, “No one will emerge a winner in a trade war”! Secondly, if the US tears up international trade agreements, such as the TPP, TTIP and NAFTA, and shuns the WTO, that would massively weaken the global economy that needs more open trade regimes, and greater integration.

Then, thirdly, consider the copycat effect of Trumpism. Many developing country governments with protectionist tendencies will be encouraged by America’s protectionism to pursue more autarkic policies instead of the much-needed reforms that would make their economies competitive and productive. Recently, somebody tweeted that if there is a “Buy American and hire American” policy, what’s wrong with a “Buy Nigerian and hire Nigerian” one? Already, of course, President Buhari sounds very much like President Trump on trade policy. But Trumpism in action could encourage more protectionism in developing countries, and harm their economies. America’s commitment to a system of open trade has always benefitted the world; its retreat from it would have the opposite effect.

All the above said, it would be intellectually dishonest to deny the economic challenges of economic openness, particularly in relation to inequalities. But the solution is not to slow down globalisation or try to stop or reverse it. This is because, truth be told, globalisation has massively helped to spread prosperity and reduce poverty across the world. Rather, the solution is to actively promote globalisation but tackle the inequality that it can also, sadly, breed. This was the point that the British Prime Minister, Theresa May, made powerfully at the World Economic Forum last month. But President Trump appears to want to throw away the baby with the bathwater. He shouldn’t! Instead, heshould embrace globalisation but help to shape a global compact on tackling inequalities. That way, the Trump doctrine will not lead to a further impoverishing of the world and its people, including Americans!

Olu Fasan