Why Trump’s tariff threats are a perilous game for all of us

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Xi Jinping and Donald Trump in Beijing, 2017

“Does the end justify the means?” This question has long been a staple of politics, in particular in the realm of international relations. Arguments can be made back and forth, and examples given for and against. At the bottom of it all, however, lies more than a difference in perspective or validity of proposals: it is a difference in values.

This will not be a theoretical discussion. It will not be a duel between pragmatism and idealism, between realpolitik and utopia, between Machiavelli and… well, many others — from Frederick the Great of Prussia, to Voltaire and Diderot — but none quite seem to embody this idea as well as Machiavelli does his.

The context

China’s trade practices have long come under heavy criticism from the international community, both private and public: strong State support for large companies, control of the country’s currency, forcing firms to set up partnerships and hand over valuable technology and secrets as a precondition for operating in China, among others. With the view of making global trade fairer, there is therefore a consensus that China must change its business practices.

For the sake of clarity, let us underline that this in no way exempts the West of its own need to review its business practices, including banking secrecy and contribution to corruption, but that is another story.

President Trump’s approach has been to slap tariffs on China, as a way to pressure the country into signing a trade deal more favourable to American interests. High tech goods worth $50 billion were taxed at 25% and an additional $200 billion in other goods were imposed 10% tariffs. On Sunday, Donald Trump tweeted his intention to raise these tariffs from 10 to 25% and to add another $325 billion worth of Chinese goods to the list.

Of course, tariffs are not a new practices for Donald Trump, who had previously used them on steel and aluminium as leverage in his negotiations with Europe, Japan, Canada and Mexico — countries that do not behave the way China does and are traditional allies of the United States. Trump has also widely used his unpredictability as a bargaining tool, threatening to impose new tariffs or even back out of deals in order to extract further concessions. This conduct highlights who President Trump is, at heart: a bully. Someone who uses strength to intimidate others and force his will upon them.

Here, the President’s attempt at making China cave under old and new tariffs is a gamble: he may well force their hand and obtain concessions, just as he may pressure them into retaliating through the country’s large involvement in the U.S. economy.

The issue

But there is a more subtle issue at hand: what if Donald Trump’s strategy did lead to concessions from China? What if China did amend, to a degree, the way it trades? What then?

Should we then take stock of this success and consider that tariffs and bullying do work, that they work better than preceding attempts at curbing China’s behaviour, and that strength is the way to reach tangible results in international relations? Would a Trump victory vindicate the idea that the end justifies the means?

Certainly the idea will appeal to nationalist movements, already sold on a view of international politics as a zero-sum-game where strength is the determining factor for inter-State relations. Each behind their borders, defending their respective economy. Republicans in the U.S., Vladimir Putin in Russia, authoritarian regimes the world over, as well as a host of European nationalists — despite their support for a more divided Europe, unable to confront larger countries as they reach their potential. Even China itself is likely to get behind that conclusion and use similar tactics when in a position of strength, following years of growth stronger than in the West.

All drawing a similar lesson: bullying works. It’s legal, it’s acceptable, and it’s efficient. Find someone you can step on, pressure him and you will win.

Even non-nationalist protectionists will hear the sirens of success and strongman diplomacy. Emmanuel Macron’s France and Angela Merkel’s Germany may continue to pay lip service to the international community and multilateralism, yet seek to step up efforts to put pressure on China to protect the European industry and on the U.S. to curtail the power of far-reaching and privacy-invading tech giants.

The consequences

But, should President Trump’s approach be successful, why be a downer? If the West is able to “defeat evil China”, why not embrace the method?

To avoid being on the receiving end

First of all, because, as indicated above, this approach may be emulated by any strong economy or military, or anyone confidently stronger than their neighbour, or even anyone will little to lose. The U.S. may seem like a beacon of freedom and democracy (though admittedly less so in recent years) but, even if that were true, what is to prevent less benevolent regimes from taking a page from the U.S.’ book?

China has been steadily building its economy and military, and seems very well-placed to resort to strong-arming neighbours and competitors in the near future. Its on-going practice of building up concrete islands and naval bases in the South China Sea is already one such example; its increasing presence in infrastructure building, through the Belt and Road Initiative, is another. Russia remain a weak giant because of its economy, but can continue to count on its oil and gas reserves to pressure weak European countries for some time.

Such seemingly “ruthless but useful” bargaining methods, when used by allied countries, may look acceptable, but a whole lot less so when they turn against us. Yet, it will be difficult to complain when we have ourselves allowed, supported or resorted to similar methods. On selfish grounds, at least, and to avoid being on their receiving end, we therefore ought to oppose such methods.

To prevent collateral victims

Secondly, because, bullying and strong-arming always has victims. Even if were are not on the receiving end and even if we do not witness direct damage, treating the international relations as a zero-sum-game means that someone’s win will result in someone else’s loss. And, as always, the most vulnerable ones will pay the heftiest price.

This is not only a moral concern — the fact that our actions ultimately have negative consequences on others —, but also a externality we ought to care about. If our abusive bargaining leads to the impoverishment of others countries, we cannot be surprised that their citizens may wish to migrate to ours. If our actions hurt local communities, we cannot fail to recognise that they may radicalise and hurt our citizens and interests, at home or abroad.

Even less violently and more pervasively, the continued nation-to-nation view of international politics is what feeds nationalism: for as long as nations oppose nations, nationalism will make the case for their superiority of their country.

To be consistent with our values

Finally, because, down the line, resorting to threats to force an outcome favourable to you perpetuates a conflict approach to international relations. And this is where we circle back to the values we want to promote. In a position of strength, threats may prove efficient and yield results; however, is efficiency the criteria we wish to prioritise?

Current threats to our environment and climate — not unlike the financial and economic crisis of 2007 — highlight the dangers of placing short-term economic considerations before other concerns. It may well lead to more financial efficiency for some, but trigger dire consequences for the rest of us — first of all the most vulnerable. They should serve to show that we are all in this together: we share one planet and the consequences of everyone’s actions will be felt by the others. The way our countries interact must reflect that.

Efficiency is an important concern for administration, whether public or private. However, it must be considered together with concerns for sustainability, fairness, and an overarching concern for others. If these are our values at home, we must behave accordingly on the global stage, and our response to challenges must be consistent with them.

The way forward

If we agree on the simplified underlying premise that Chinese trade practices are unfair, but oppose President Trump’s bullying approach, then what? What is another way to reach a similar goal?

Evidently, the argument above — the criticism of bullying — does not aim at justifying inaction, merely at opposing a response based on strength, opposition and pressure. Nor does it forbid protective measures: evidently, environmental and health regulations cannot be equated with slapping tariffs on imports ahead of a trade deal.

This is where a global perspective comes into play. With politics being mostly a national affair, countries tend to forget the wider world. Trade disputes between the U.S. and China need not only involve the U.S. and China. Privacy concerns between the E.U. and the GAFA need not involve only the E.U. and the U.S. If the world counts close to 200 countries, many face the same issues, and simply because a majority may not be able to speak loud enough on the global stage does not mean they do not have something to say.

By building strong and democratic international institutions, we give ourselves powerful tools to ensure the rule of law and to leverage the combined forces of many voiceless countries.

Realists will say that international institutions only play a marginal role in international relations and that countries mostly operate on a bilateral basis. But this is only receivable because the international institutions we have built are neither strong nor democratic.

Twentieth-century institutions have enshrined the primacy of the nation-State and, by and large, refused to give teeth and proper sanction mechanisms for the enforcement of international law. Likewise, international institutions operate, more often than not, on a basis — when voting rights are not based on financial contributions. Evidently, these mechanisms fall far short of the standards of democracy we ought to expect and enforce.

Democracy does not rest upon military or economic power, but on demography and on the voice of individuals. In bilateral negotiations, the U.S. and China each have more power than any other country; in demographical terms, even China’s 1.4 billion inhabitants only make up a meagre 18% of the world’s population — not enough to maintain practices opposed by most other nations.

President Trump’s rash actions to pressure the Chinese government should not be a source of pride for him or envy for us. Even if ultimately successful, they would only entrench the idea that confrontation is a preferred means of problem resolution at the global level. Not only would more confrontation lead to a dangerous dichotomy of loser and winners, but such tactics are sure to backfire and hit European countries from competitors to the East and to the West.

Instead of dreaming up strongman scenarios, Europeans leaders would therefore be better advised to strengthen and democratise international institutions and ensure that all smaller countries — and the countries that have not yet realised they are small — have a proper voice. Our consistency with our values is what will define the global order: if we give in to confrontation, we will lose to stronger foes; if we ensure cooperation, we will win with allies.

Written by

Founder of European Democracy Consulting eudemocracy.eu 🇪🇺 | President of EuropeanConstitution.eu 📜 | Founding Member of Mieux Voter 🗳

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