The global economic system that the United States has shaped and directed for more than three quarters of the century was animated by a powerful guidance vision: that trade and finance would be based on cooperation and consent instead of coercion.
That system, despite all its failures, rooted the United States as the richest nation in the world and its only financial superpower. The rule of law and the stability and trust generated by this approach helped the dollar to be the currency of the world for transactions and the United States a global investment center.
When causing a world commercial war, President Trump runs the risk of abandoning that vision of shared interests and replacing it with one that assumes that strong economic conflicts are inevitable.
Gone were appeals for a broader purpose, mutual agreements or shared values. In this new order, the strongest nations determine the rules and apply them through intimidation and naked power.
“This is a completely different vision,” said Greg Grandin, Yale historian, “one in which the first principle is that nations have no shared interests; they have conflicts of inherent interests.”
That opinion is behind the decision of the president of slapping radical tariffs on Wednesday, including a 10 percent tax on almost all imports to the United States.
Trump’s commercial policies after just over two months in office have caused a strong fall in the stock market and in the confidence of business and consumers. Wall Street analysts have been projecting higher inflation rates and slower growth in the United States and worldwide.
But quarterly profits and losses are trivial, many economists and political leaders said, compared to the potential long -term damage to power and unique privileges that the United States has built in the global order of postwar. At stake are the country’s unparalleled influence on the world’s financial system, the advantages that their businesses and a reputation enjoy that attracts investors and innovatives.
He affirms from Trump’s cooperation, said Abraham Newman, a professor at Georgetown University, “will undermine the economic security of the United States in the long term.”
The advantages and power of the dollar
Consider the preeminent role of the dollar as the world reserve currency, which practically all nations use for everyday trade and parties for rainy days. Because global trade and transactions are carried out in dollars, they all need them. That demand means that the United States can pay less interest when it sells treasure bonds, which reduces loan costs.
In addition, US companies are free from many of the concerns that come from the ups and downs of foreign exchange or capital flights. When disturbances and uncertainty are based on the global economy, the dollar is seen as a safe refuge, even when the United States is responsible for agitation.
The American domain of the global financial system has also allowed Washington to shape the world economy around its own security concerns. After September 11, 2001, the attacks revealed how the terrorists were using the global financial system to send money through the borders, the United States was able to tighten the controls.
Republican and democratic administrations have expanded their use of sanctions and export controls to consolidate the mastery of the United States over global finances and, later, on technology such as artificial intelligence and semiconductors.
Such energy is what allowed the United States to restrict the export of advanced computer equipment to China and freeze foreign property foreign exchange reserves after Ukraine was invaded.
However, every time the Trump administration says it wants to reduce the value of the dollar in the currency market or threatens tariffs and other consequences, confidence in the dollar receives a blow, said Barry Eichernen, author of “exorbitant privilege: the increase and fall of the wrist and the future of the international monetary system.”
A weaker dollar means that foreign headlines lose money. “In that sense,” said Eicherenen, “the full faith and credit of the United States government, which is trying to depreciate its external obligations, is affected.”
Disadvantages of the winner require everything
The fact of not accounting for mutual interests can undermine the longest objectives, said Joseph S. Nye Jr., Harvard professor. In his eyes, the transactional attitude of the administration reflects the background of Mr. Trump as real estate developer in New York and New Jersey, where bullying can be common and each agreement is one and done.
That approach caused Mr. Trump to be money, but also turned out to declare his bankruptcy properties several times.
What Mr. Nye said, they are the growth, credibility and influence that accumulate of being a reliable partner for years and decades.
When the White House officials discussed the plans to hit the hutis militants in Yemen who have been attacking ships in the Suez channel, they complained about “European Freelading” and considered extracting some type of payment “in return.”
But keeping the channel open was not just a favor for Europe. It describes other countries, militias and pirates to interfere with the passage of trade. “In the long run, we are interested in having the freedom of navigation of the seas and not making a group like the hutis destroy it,” Nye said.
In the same way, it was of interest to organize a rescue of $ 50 billion for Mexico after a financial crisis in 1994. Washington worried that a devastated economy encouraged half a million Mexicans to migrate illegally through the border.
And keeping the world supplied with dollars during crises is also what keeps working with the plumbing of the global financial system.
At the same time, US deposits in the Bank accumulation bank. The United States has been able to successfully press allies such as the Netherlands and Japan to limit the sale of advanced semiconductor equipment, and the profits of its national manufacturers, to China.
Successive administrations, including Mr. Trump, have worried about the military uses of technology, as well as the possibility that China can eventually create their own version of products that now buys from US companies.
The dependence of coercion instead of cooperation was standard after World War I. And finally stimulated the Nazification of Germany, Japanese imperialism and a ruinous tariff war.
That gloomy history led to the United States and other nations after World War II to adopt an approach that focused on mutual interests. With the main position, Washington gave enormous financial support through the Marshall Plan because I believed that a stronger Europe would do so be in the long -term interest of the United States.
The governing principle was that commercial ties would link countries and mitigate the military conflict. It was an idea that won his main proponent at that time, former Secretary of State Cordell Hull, a Nobel Peace Prize in 1945.
Mr. Trump, however, has changed this theory. Instead of focusing on the shared interests that create economic ties, it is seeking to exploit the vulnerabilities they generate.
In fact, Trump is the first president since the end of World War II in pursuing US interests regularly violating international agreements, lighting allies and soft power tools such as economic and humanitarian aid.
“What we are seeing is so dramatic,” said Mr. Newman, Georgetown’s political scientist.
Among the allies of the United States, he said, a deep fear that the Trump administration is looking to create a new global order focused closely on US self-granding is being developed.
The approach can produce immediate profits. When the president of Colombia rejected the US military planes that transported the deportees, Trump’s threat to impose financial sanctions and 50 percent of tariffs in all Colombian products forced a reversal of policies.
But if countries believe that the global order is dominated by a capricious leader, they will seek alternatives. Over time, that could degrade the state of the dollar and reduce the dependence of American weapons, technology and products. It could also strengthen China’s hand at the expense of the United States.
On Sunday, the Ministers of Commerce for Japan and South Korea, the US economic partners in efforts to counteract China, met with Chinese representatives in Seoul for the first time in five years to discuss the expansion of regional commercial ties. Any closest commercial link that can forge with China could significantly undermine Washington’s objective to slow down the advances in technology by China.
And that, said Mr. Newman, is “the opposite of what the United States would expect to achieve.”
