Opinion
Mint Quick Edit | Trump’s tariff ideas are bad for the world
Summary
- He has said he prefers trade tools over financial sanctions against geopolitical adversaries and is right about the latter’s risks to the dollar’s supremacy. But using tariffs as weapons isn’t any wiser, as the whole world loses from trade inefficiency.
US presidential candidate Donald Trump made world watchers sit up over the weekend by batting for a US policy shift on geopolitics.
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He made clear his preference for trade tariffs over financial sanctions as weapons against adversaries, arguing that the US dollar’s supremacy mustn’t be lost for a smaller cause, as he contended sustained sanctions may lead to.
Indeed, many other countries now want alternatives to US-set economic channels to reduce their risk of clamps on dollar reserves, for example, as Russia suffered after its invasion of Ukraine; so, using such curbs does weaken the dollar’s global appeal.
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But weaponizing tariffs isn’t any wiser an option, as the whole world loses from trade inefficiency. In the geopolitical arena, nobody should forget the role played by mercantilist national policies in tensions a century ago that led up to World War II.
Trump also said he plans to contain “nuclear warming" to avert another catastrophic war. This objective would be served better by fostering frictionless world trade, instead of the US deploying distortive barriers and levies.
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After all, America cedes its advisory high ground on policy each time it abandons trade ideals in fear of losing.
