Trump's protectionism is based on an outdated view of the economy

Online Desk | January 27,2017 | 12:48 pm

Editorial. With a strong downturn, the doctrine of the new American president resembles a "national-economism".

Editorial of the " World ". The case has not dragged on. Barely invested, Donald Trump implemented his promises and decided to place protectionism at the heart of his economic policy. Threat to tax industrialists who relocate their production, withdrawal of the transpacific treaty (TPP) that Barack Obama had signed, request of renegotiation of the free trade agreement with Mexico and Canada (Alena) ratified in 1993 by Bill Clinton.

The president of "America First" hopes to change the rules of the game to defend the workers of the former industrial states (Rust Belt, "rust belt") and reduce its abyssal external deficit, reaching $ 475 billion - when, at the same time, Germany gains a surplus of 300 billion and China 265.

Trump's business philosophy, endorsed by traditional industry unions, dates back to the 1980s, when America was invaded by Japanese products, to the detriment of the American worker. Thirty years later, the US president intends to trigger the response. But his approach is based on an outdated vision of the economy.

At the time, it was necessary to reduce its imports and maximize its exports in order to get rich. The globalization of firms has made this analysis obsolete. Economists are now thinking in a value chain: each country must add the maximum value to the creation of a complex product. Thus, it is not serious to import iPhone "assembled in China", if they are "designed in California", as Apple boasts for the biggest fortune of Silicon Valley.

Commercial Catch

Moreover, the denunciation of the TPP is strategically absurd. This alliance was made to organize the commercial domination of the United States around the Pacific against China. As republican senator John McCain deplored, this withdrawal "is a serious mistake. This will offer an opening to China to rewrite the economic rules to the detriment of the American worker " .

Trump does not care. He pushes his pawns, and the question is, how far he will go. Some people reassure themselves that Trump has been practicing politics since his office in Ovale, as he used to make reality TV, commercial wrestling rather than real boxing : by killing the TPP, Trump would only have killed a zombie. The treaty was stillborn, as Barack Obama did not present it to Congress due to lack of majority to ratify it .

As for the renegotiation of the Alena, it could take years. In the meantime, the President can not increase customs duties: this is contrary to the rules of the WTO and the American Constitution, which reserves this prerogative to the Congress. The Speaker of the House of Representatives, the Republican Paul Ryan, has already warned: "We will not increase customs duties. "

Las, this lesser evil is not certain, so much the dynamics of withdrawal of the American president is strong. Trump has other weapons than the customs barriers at its disposal, such as the drastic reduction of US corporate taxation that makes Wall Street flare . He can also twist the law, impose his views on intimidation against weakened partners, such as the UK post-Brexit Theresa May. Today, no one knows where Trump's national economism will stop.

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