Trump systematically upsets global order and trade: Where does this end?

American steel and aluminum industry executives applaud President Donald Trump’s decision, to impose new tariffs of 25% and 10% respectively on imports of those products. Official White House, photo by Shealah Graighead.

The extra import tariffs Donald Trump, the ‘America first’ President, the US is to impose on steel (25%) and aluminum (10%) imports have provoked a tsunami of reactions and widespread consequences without and even within the country. The European Commission President reacted swiftly and stated the EU is to retaliate with tariffs of an equal overall effect on three iconic American products; the Harley- Davidson motorcycles, bourbon whisky and oranges. The EU counterattack is not at random. It targets the regions and the electoral constituencies where very important Republicans, such as the Presidents of the Senate and the House of Representatives, get elected.

Actually, it’s those two most senior fellow Republicans of Trump who will pay the dearest price in case he insists on his initial pronouncement. The Speaker of the House, Paul D. Ryan, is elected by people who produce the Harley-Davidsons. The President of the Senate Mitch McConnell is elected in Kentucky, where the famous American bourbon whisky is produced and oranges come from Florida, a State which many times in the past has determined the Presidential election.

Targeted retaliation

The two top Republicans, McConnell and Ryan, are instrumental in helping the President pass the laws he wants in the Legislative. Both the House and the Senate are controlled by the Republicans, but on many occasions, like the game changer overhauling of the US tax code, the President badly needs the active involvement of those two men to get what he wants from the legislative.

Now, both of them are bewildered with the President’s import tariffs, which are to save a few thousand jobs but destroy many more. Even more worrisome for them, though, is the possibility of depriving them of their seats in the next partial elections, which will renew a large part of the two houses making up the US Congress.  The possible EU retaliatory tariffs may, at best, deprive the two leaders of their usual large majorities, with which their constituents elect them to the House and the Senate. This may cost them their privileged positions.

Unsettling the GOP

Ryan was first to strongly react, asking the President to reconsider, followed by McConnell who also criticized Trump’s decision. According to Reuters, AshLee Strong, a spokesman for the Speaker of the House of Representatives said, “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan.” However, Republican strategists estimate that Trump’s decision to support American steel and aluminum production, in the coming elections for the renewal of the Congress will create a positive effect for the Republican candidates all along the industrial Midwest.

Voters, even remotely related to production of steel and aluminum products, will appreciate Trump’s bold move to shut out foreign competition. On top of that, the ‘red neck’ white voters in the entire Midwest will feel that Trump has honored his promises about making ‘America fist’. It’s the anti-globalization revolt by lay people, feeling betrayed by the Washington elites. These are exactly the political winds that brought Trump to the White House; those that weathered the industrial regions of the US and transformed a large extent of them to wastelands due to globalization.

Favoring the populists

On the contrary, the same sources estimate that the negative effect on Republican political appeal from the potentially more expensive steel and aluminum used by a series of manufacturing sectors will be much less important. In any case, the trade war threats will help the Republican candidate win the key Pennsylvania 18th District special election of March 13 for a seat in the House.

Still, the mainstream leadership of the Republican Party is against this new Trump trade discharge. It’s not only that Ryan’s and McConnell’s constituencies are targeted by the possible EU retaliatory tariffs. It’s exactly as it was in the 2016 Presidential electoral campaign, where the GOP establishment had a hard time accepting Trump and his extreme populism as their candidate. So acute was the then internal confrontation between the Trumpists and the establishment within the GOP, that many Republicans decided to support Hillary Clinton, the opponent Democratic candidate. The same mood now prevails in the relations between the White House and the Capitol Hill. Only the extreme right wing populists support the new tariffs.

Targeting Europe

Coming back to this side of the Atlantic Ocean, the European Union is always targeted by the Trump ‘ideology’. Over the course of last weekend, he threatened to reply to possible EU responsive tariffs with new taxes on imports of European cars. In the past he has said “Germany is bad, very bad”, in reference to the sales of German made cars and other products. Last Monday he stated, “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US. They make it impossible for our cars (and more) to sell there.”

Whatever the motives and the final score of this Trump trade of war words, there are already tangible consequences. The world order is further disturbed if not totally upset, even in the geostrategic sphere. And this is just the latest development in the series of Trump’s unsettling interventions, and very probably not the last.

The resignation of Gary Cohn, National Economic Council President and top advisor to Trump yesterday morning is a bad omen. He is a strong advocate of free trade and left the White House after losing the battle to block the new Trump tariffs. After that, there is nobody important left in the White House to support free international trade. So, it’s not a wild guess to think there might exist people of power hiding behind Trump in the obscurity, who feel so strong as to believe that global chaos would favor them and their clout on the world.