Advertisement
Opinion | Why the cowed silence amid Trump’s attacks on global trade and stability?
Many nations are avoiding confrontation due to caution or pragmatism. But this risks encouraging further actions that could destabilise the global order
Reading Time:3 minutes
Why you can trust SCMP
3
The global economy is caught in the crossfire of an escalating trade war and policy shifts driven by the US administration. While the world largely dismissed provocative statements such as annexing Canada or Greenland as rhetorical stunts, the Trump administration’s trade wars and tariff policies have far-reaching consequences. They have introduced severe volatility into global markets and undermined the foundations of trade.
The lack of a clear international response to the remarks about Canada or Greenland is puzzling. Is the world hesitating due to fear, complacency or a lack of options? Regardless, the stakes are monumental, and the economic and political costs are becoming impossible to ignore.
One explanation for America’s trade aggression is that it is using tariffs to pressure countries into negotiating resolutions to long-standing trade imbalances. This may seem a clever tactic to protect American industries and secure better trade agreements – several countries have rushed to negotiate with Washington.
But tariffs impose significant costs on everyone, disrupt global supply chains, raise business expenses and ultimately harm consumers. Is this strategy sustainable or merely a short-term negotiation tactic?
Another possibility is that the United States is trying to reverse decades of globalisation by returning manufacturing jobs to American soil. But reshoring large-scale manufacturing would require enormous investment, escalate production costs and lead to significant inflation.
For instance, producing an iPhone in the US could double its price or more, making it unaffordable for most. Even if some strategic industries are revived, the broader vision of restoring American manufacturing on a large scale seems disconnected from economic reality.
Advertisement