America’s trading allies cannot do much to curb damaging protectionism alone. It will take far more than that — specifically action by Americans themselves.
Since returning to the White House three months ago Donald Trump has signed a series of executive orders to implement his electoral promises. These have ranged from rolling back diversity, equity and inclusion policies to cutting foreign aid to the world’s poorest nations and imposing tariffs on imports from most US trading partners.
A week ago he turned his attention to “liberal” US universities, including Harvard, threatening to cut billions of funding support. He has suspended the most severe of the import taxes, which were due to come into effect on April 9, for three months. The notable exception is tariffs on Chinese goods, which stay in effect.
The tariffs are unquestionably hurtful. They will cost jobs and growth and worsen poverty and inequality the world over, and cause severe economic inefficiencies. Small businesses and their workers will be worst affected. The global markets, which were brutally smacked by their introduction, have yet to figure out how to deal with them.
The Europeans, British and Global South are mulling strategies to deal with the Trump administration’s trade and economic policies. While targeting China is clear as an objective, it remains unclear what the administration is expecting of its allies. Should they denounce and isolate China, or cut anti-China trade, economic and military deals?
For its part, China is clear; it will no longer turn the other cheek. Not only is it supplying the world with goods, loans and investment, it also owns productive assets around the world. Most of the products they churn out don’t carry “made in China” labels, so will prove trickier for Trump to stop through rules of origin tests. Diversifying trade routes away from the US could work, but it will take time before becoming effective.
Trump’s tariffs are not only hurting US trading partners, they are also damaging to US consumers. The tech billionaires, Trump’s apparent allies, have not been spared. Small business owners, who make up the backbone of the US economy, will suffer terribly, while the manufacturing jobs that left the US during the globalisation era will not come back overnight, if at all.
US consumers will be the ultimate victims. Thanks to the tariffs on foreign goods entering the US consumers will have to pay more for imports or be deprived of choice and forced to buy only US goods. Import substitution will not happen overnight either.
In the past few weeks ordinary Americans and some of their leaders have started speaking out against “MAGA” policies. Some legislators are openly criticising Trump and his billionaire buddies over his attacks on US institutions such as the courts and Federal Reserve, especially its chair Jerome Powell.
Trump is known to be exploring legal ways of sacking Powell for refusing to cut rates on command and this week the dollar hit a three-year low and markets fell again. Powell will this week be surrounded by fellow central bankers and finance ministers at the spring meetings of the IMF and World Bank. Most share his concerns over Trump’s policies and the havoc they are causing in the global economy.
US universities, which are respected around the world, have generally stood up to the administration’s threats, jealously guarding their independence. The courts have hitherto also been uncowed. Ordinary Americans will have a chance to express their true feelings about the direction the second Trump administration is taking in the midterm elections in a little over a year and a half.
The actions of ordinary Americans and constitutional bodies are important, but insufficient to curb the reckless policies of this US administration. The voice of American business leaders — minus the billionaires — has been worryingly silent, though it’s hard to think they are happy with the way things are going.
• Dludlu, a former editor of Sowetan, is CEO of the Small Business Institute.
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