US President Donald Trump’s trade wars are the result of a reckoning with the accumulated contradictions arising from globalisation. Instead of addressing the polarisation in the United States that propelled him to power, Trump blames “the other”. But his tariffs will only exacerbate US structural inequality.
Advertisement
Globalisation created greater equality by bringing prosperity to the developing world, notably in the rise of East Asia. China has lifted more people out of poverty more rapidly than any other nation. Before Trump unleashed his tariffs on the world, China’s overseas investments and infrastructure development were poised to benefit the Global South, from Southeast Asia to Africa.
With global convergence came domestic divergence. While the US has grown more prosperous with globalisation, the benefits have mostly accrued to the elite. Middle-class wages have been stagnant for decades and many blue-collar jobs have vanished, though this is also increasingly the result of automation.
While countries from Singapore to the Nordic nations mitigate the relentless forces of globalisation with skill upgrades and income redistribution, the US has not. Do American workers have the skills and discipline to undertake mass manufacturing jobs if they returned and would they even want to?
Manufacturing shifts are a natural pattern of economic development. From Britain to Bangladesh, industrialisation often started with textile and garments. Japan and South Korea kick-started their export-oriented economies with apparel. From textile to steel, didn’t the US displace the once-dominant Great Britain?
Advertisement
But as an economy becomes more complex and develops higher value-added, knowledge-based and service-oriented activities, it evolves towards more productive tasks. Would Japanese workers want to go from making high-end cameras back to producing simple toys? Do South Koreans long to regress from being computer programmers to garment workers? Can the US revitalise its textile industry on a grand scale without restoring the institution relied upon for cotton production before the Civil War?