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The economic and cultural reasons for Trump’s trade war

The attack of the president of the United States, Donald Trump , the G7 and free trade is rooted in the impact of globalization on the US labor market, as well as the cultural tension between modernity and reactionary conservatism.

During his trip from Canada to Singapore on June 9, after attending the G7 meeting in Quebec , Trump launched several explosive tweets against his European allies and the Canadian Prime Minister, Justin Trudeau . The dreaded “commercial war” became a serious reality.

Trump arrived late to Toronto, with the unfeasible proposal to invite Russia back to the G7, hampered the meetings, left before the end and used Prime Minister Trudeau (his antithesis in style, modernity and liberalism) as an excuse to bomb the meeting . As the economist Paul Krugman explains , the problem is not only that Trump has altered the rules of the game of relations with the allies, but he accuses them, with false figures and incorrect data, of doing things that they do not do . It is not true, for example, that cars produced in Canada “flood” the US market, but that automobiles are manufactured between the two countries and sold internationally and on both sides of the border.

Nor is it true that European tariffs are so high or that the immense trade deficit that the US has with China is due to free trade. The main reason is the US stagnation and deindustrialization, largely because it spent more resources for decades on the military industry than on other advanced sectors, and because thousands of companies closed their plants in that country and left to produce China, Mexico or El Salvador, where they pay much less for non-unionized labor.

 

Dedicated to their voters

But the social base of Trump does not care about the data or the replicas, considered “false news” ( fake news ). Economically, they believe that if tariffs for steel and aluminum from China, the European Union and Mexico are increased, US companies will buy these goods from domestic producers. In reality, the companies will look for other sources and, if they were forced to buy American steel and aluminum, which is more expensive, then the prices of the products will rise. In parallel, imports from China, Europe and Mexico will cost more.

But Trump knows that free trade and partnerships such as the North American Free Trade Agreement(NAFTA) and the Trans-Pacific Agreement have had a social impact. For the worker who lost his job and the safety of his family, the culprits are the politicians in Washington who enthusiastically accepted the integration of the US into globalization. At the same time, by showing himself as a hard negotiator before Europeans and Canadians, he links culturally with the chauvinistic nationalism of many American rural and industrial citizens, who accuse political elites of “Europeanized”.

 

The neoliberal model

The expansion of free trade has been linked to neoliberal policies; that is, deregulation of markets and labor rules with less protection. This widened the gap between what executives earn and their immediate management circles and what employees earn.

The first sector benefits from high salaries, bonuses, access to the exemption (not always legal) of taxes and relations with politicians that facilitate the multiplication of their businesses. The other, has seen their posts in industry or the rural sector have disappeared because they have moved to other countries, or have been eliminated by robotization or because investors are oriented to the service sector. This has been the case in almost all industrialized countries in recent decades, and with a particular impact on the United States. A large social sector has lost its jobs. At the same time, women have had a sustained rise in the world of work, and many jobs in the service sector are occupied by immigrants (especially from Central America and Mexico).

 

The cultural revenge

These economic and social factors are intertwined with cultural factors, such as racism, rejection of feminism and new forms of family and sexual identities, xenophobia and nationalist populism. The economic factor plus the crisis of traditional masculinity and the perception of a part of white citizens of losing power and social hegemony against new citizens (Latinos) configure the scenario of fear of Trump voters. To all this the racial question with the black population is added, problem not solved in spite of the struggles by the civil rights in century XX. That Barak Obama , a black president, came to the White House has been the culmination of the nightmare.

The tension that has existed in the construction of the nation and the State in the US is manifesting acutely, and threatens to be worse. It is about the confrontation between conservatism and liberalism; between reactionaries and modernizers. The integration of the US into neoliberal globalization brought undesired consequences, such as the destruction of employment indicated above, the growth of inequality and the unlimited exploitation of the environment.

But modernity from the 20th to the 21st century also produces an agenda of social and political changes and transformations, such as the rights and claims of women, the legal recognition of new family forms and the equality of races and religious identities, as well as physical protection of the planet before climate change. Internationally, the rise of new powers (such as China) and regional architectures (such as the EU), together with regional dynamics (for example, in the Middle East) have reduced the power of the former colonial powers and the US.

These demands immensely trouble conservatives and reactionaries. Trump built a speech on each of these issues from his election campaign. Once in power, its officials are tearing down environmental regulations, trying to reinstate religious education over the secular, eliminate social programs, return to male power, promote the patriarchal family, and return to white supremacy over blacks, Latinos and Muslims.

In each of these fields, Trump is normalizing the reactionary positions and pushing his country to a greater internal fracture and weakness. His declaration of commercial war, in reality an unusual call to return to economic models prior to the nineteenth century, are directed to his constituents, although the commercial war will have negative consequences for them. Meanwhile, perhaps it is time for Europeans and Canadians to review the irresponsible leadership of Washington and assume that they should address themselves.

-MARIANO AGUIRRE

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