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Trump And The Not-So-New Trade Wars

Roger Salus profile picture
Roger Salus


  • Since the 2008 financial crisis, protectionism has been accelerating globally in the aggregate.
  • Previous to the 2016 US election, protectionist measures received little attention from the mainstream media.
  • The US President is only the most recent (and bombastic) manifestation of a longer-term trend.
  • Expect protectionism to continue, as recent elections in the US and Europe demonstrate that an intractable split has occurred between the Western World's elites and its working classes.
  • Avoid industries that are heavily subsidized, as these will present protectionists with juicy targets. If good buying opportunities arise, seek the safest of blue chips, and only if you have a long time horizon.

Your humble author finds himself in a rather odd position this week. As you, dear reader, are doubtless aware, there has been much talk about the age of protectionism that the US President is said to be ushering in. Like most macro observers, this concerns me, as I am outwardly in the camp that believes free trade is largely a good thing, and escalating protectionism risks stunting what little growth has been achieved in the post-Financial Crisis era. However, the odd position I find myself in has less to do with the protectionism the President is advocating than with the way it is being portrayed by an ideologically-motivated media machine. As I will show, protectionism has been gathering force for at least 10 years, a fact that seems to have been forgotten in the hyper-charged climate of our time.

As much as anything, this is an indictment not just of the media, but of the Western intelligentsia of which it is a part. Its inability to see the obvious cracks forming in the foundation of global trade is symptomatic of the contempt too many elites hold for those who have either suffered from global trade, or benefited least from it. The rising tide of protectionism is neither a Trump-phenomenon nor a US-phenomenon, and it will almost certainly continue to gain momentum.

The Forgotten Trade Wars

A casual consumer of news media might be forgiven for believing that the election of Donald Trump signaled a turning point in global trade, specifically towards the more inward economic policies that "America First" would imply. On the contrary, we shall see that Mr. Trump is merely the most bombastic and explicit manifestation of the gradual distancing from freer trade by not only grass-roots voters but also of policy-makers themselves, in spite of what the latter may profess publicly.

This article was written by

Roger Salus profile picture
Mr. Salus specializes in macroeconomic topics. He's the author of Twilight of a Middle Class: Retirement Crises in Our Two Economies World, which is widely available on Amazon and elsewhere. He holds a master's degree in Political Theory, as well as a bachelor's degree in Political Science and Economics. He lives somewhere in the Americas.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (29)

The USA has, in thier own tax regulation, allowed companies to off shore jobs and manufacturing at a blistering pace over the last 20 years. Buy a lawn mower - made in China, buy a snow blower - made in China, buy some cars and SUV;s, made in Korea, china and other parts of the world. The US/Canada/Mexico merely assemble vehicles. In NAFTA we saw 10 assembly pants leave Canada/USA only to move to Mexico.The USA has only themselves to blame of allowing goods to enter thier country with little or no duties. Mean while large world-wide corporations continue to hide profit off shore. Trump is somewhat on the right track. Other countries have Tarrifs against US or other foreign made goods. It is the USA that has dropped the ball.
Kiisu Buraun profile picture

Thank you for stating what I've "felt" and mused about, but had not put to word.

I believe we are lined up to once again experience[1] "interesting times".

Best wishes,

1. From the benefit of some point "safely" distant in the future.
Roger Salus profile picture
Glad you enjoyed it, Kiisu:

Let's hope times don't get too "interesting" within our lifetimes. :)

All the best!
Rudester: I don't think his supporters care, as long as he says what they feel in their hearts (but afraid to say so).
Rudester profile picture
It is all rhetoric that, when given the opportunity, he doesn't follow. Trump Tower was built using Chinese steel and the bulk of the steel workers used were undocumented Polish workers. Today, Trump ties, baseball caps and other paraphernalia, like Ivanka's clothing line is made in China.
Ben Gee profile picture
There is no pure capitalism not pure socialism. There are many countries that are both. For those that have a good heart, I do not care whether he is a capitalist or a socialist.
Roger Salus profile picture
Very true, Ben Gee.

Every Capitalist country has a welfare state of some kind. Even Fascist countries have welfare states. Countries that try hardest to be Socialist always end up creating underground, black markets, which ironically are in many ways the rawest form of Capitalism there is.
wanster profile picture
At least the current President supports workers, free markets and job growth. How so? Name a single industry that Obama openly supported. Let me see.. Banks were greedy, energy was evil, healthcare had to be 'affordable care act', autos needed 'cash for clunkers'.
So at least admit we are playing in a somewhat more business economy. Trade wars are just that, but at least Socialism is being slowed down by The Donald >>
Windsun33 profile picture
That old "socialism" canard is getting a bit tiresome. The US is nowhere near being socialist. In fact almost no country is.
wanster profile picture
Hi Windysun: I would agree with you, except for the continuous attempts by politicians and so called progressives to: 'address' income inequality (how do you do that??), social justice, progressive tax rates, regulate every industry, complain about 'profits'. If all of this means 'canard' I must be misinformed.

By your above definition, what country on earth is not "socialist"?
nice, some real writing! Thank you. There is no major more protectionist than China period. They should never have been allowed on the world stage. The Eu is a drain hole of $ and needs to collapse in its current form. D.c. always sells out to the highest bidders and must be cut in half. We don't need for example 1/2 of any kind of enforcement as 1% of guilty white collar goes to jail. Corporations write our laws with pages making them look like d.c. came up with it to be "debated" and rubber stamped. So little truth in this country = pathetic.
The hatred is incredible here. wow.

But loser (especially racist) shows that a lot
I'm a millionaire and you're a physician, racism in action would be getting favoritism because of skin color. I've never benefited from racist folks in fact I have supported them monetarily against my will. Hatred against lies is acceptable and encouraged. Clueless homo sapiens always prefer political correctness as it masks their inability to stand for what's right.
No clue what you’re on about
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