A wide range of economists are voicing alarm over President Donald Trump’s steep tariffs on imports into the United States, sparking a trade war that experts say could tip many countries into recession. Here are comments by some leading economists:
Failure of Reaganism’
For Thomas Piketty, French author of the best-selling “Capital in the Twenty-First Century”, “Trumpism is first of all a reaction to the failure of Reaganism” — the liberalisation of President Ronald Reagan in the 1980s.
“Republicans realise that economic liberalism and globalisation have not benefitted the middle class as they said they would,” the left-leaning economist told AFP.
“So now they’re using the rest of the world as a scapegoat,” he said. “But it’s not going to work: the Trump cocktail is simply going to generate more inflation and more inequalities.”
In response, “Europe needs to define its own priorities and prepare for the global recession that’s coming” with a massive investment plan in “energy and transport infrastructure, education, research and health”.
– ‘Malignant stupidity’ –
Paul Krugman, the Nobel economics prize laureate, said the United States was essentially the founder of the modern trade system that had led to lower tariffs over the past decades.
“Donald Trump burned it all down,” Krugman wrote on his popular Substack blog before the president’s baseline 10 percent tariffs on imports took effect on Saturday.
“Trump isn’t really trying to accomplish economic goals. This should all be seen as a dominance display, intended to shock and awe people and make them grovel,” he said.
Krugman accused the US administration of “malignant stupidity” at a time when “the fate of the world economy is on the line”.
“How can anyone, whether they’re businesspeople or foreign governments, trust anything coming out of an administration that behaves like this?”
– ‘Major problem’ for the poor –
For Nasser Saidi, a former economy minister of Lebanon, “a major problem is the impact on the least-developed and emerging countries” from Trump’s “seismic shock to the global trade landscape”.
“Countries like Egypt, Lebanon or Jordan are going to face disruptions in terms of their trade relations” as well as the prospect of cuts to foreign investments.
“When you have tariffs of this type being set up, high levels of tariffs with no economic basis, what you’re going to do is severely disrupt supply chains,” he added.
“I think we’re finished with the era of globalisation and liberalisation”, which will lead countries in the Middle East, for example, to reinforce ties with Asian partners.
– ‘Weapon of the weak’ –
Kako Nubukpo, an economist and former government minister in Togo, warned that Trump’s tariffs will hit African nations already suffering from political difficulties.
“Those left behind by globalisation appear more and more numerous. And so we’ve seen an increase in illiberal regimes, whether that’s in Europe, Africa or America,” he said.
But “protectionism is a weapon of the weak, and I think Trump has realised that in the competition with China, the United States is now the weaker one.”
In response, “African countries should promote their own national and regional value chains” as buffers against Trump’s tariffs.
“It’s a sort of neo-mercantilism, which assumes that international trade is a zero-sum game and fits perfectly with a belligerent worldview,” Nubukpo said.
