The world seems to have become obsessed with tariffs since Donald Trump won the US presidential election on November 5. Tariffs are being seen by many as a main pillar of his foreign policy and a weapon of economic mass destruction. The reality is more complex – and intriguing.
Trump’s proposed tariffs may well prove to be little more than a threat – more bark than bite. And even if they are applied as forcefully as the theatrical president-elect would have us fear, their impact on a changing global economy could prove muted.
What if, for example, the president-elect’s disdain for multilateral trade agreements and his desire to make America great again behind tighter trade and immigration borders leads him to embrace non-economic forms of internationalism rather than retreat into isolationism?
What if a Trump-led America content with a smaller role in global security turns out to want to seek closer engagement, not with rules-based trading blocs across and beyond Asia, but with looser-knit groups such as the Asia-Pacific Economic Cooperation forum or even Brics – or its principal members at least?
That might not be good for global trade and economic growth in the shorter term but it could secure a more stable international environment in which risks to world peace could be addressed and existential threats of hot wars and a hot planet tackled.
Trump is “Mr Tariff Man” in the eyes of many commentators but this is at least partly a reflection of their obsession with economic growth and failure to grasp that, with autocratic leaders, it is the spirit that matters as much as, or even more than, the letter.
