While President Trump takes a victory lap following the capitulation of many of America’s trading partners to his arbitrary trade demands and the application of astronomical tariffs to imports from other countries worldwide, and while the piles of additional tariffs on US imports add more and more to the prices of purchased goods, it is worth pausing to note what has now been cast aside along with the long-established legal and economic arrangements of modern civilization. The loss of global public goods to humanity from these myopic and misguided US actions involves much more than may be immediately apparent in the accumulating effect of the tariffs as taxes on trade.
The flagrant violations of international law in the imposition of the tariffs are so numerous that few bother even to mention them anymore. Who continues to point out that these arbitrary actions by the United States are inconsistent with the basic laws of nondiscrimination that are supposed to guide and govern world trade under the auspices of the World Trade Organization (WTO)? Brazil and some other countries are seeking consultations on these illegal tariffs in WTO dispute settlement, but is it even certain that the United States will bother to show up in the Geneva legal proceedings? A request for consultations on a trade dispute must be heeded under WTO rules, but does that still matter?
Likewise, the domestic economic price of the tariffs is increasingly accepted as a given. Congress is intimidated to the point that it is unwilling to reclaim its constitutional authority over trade from the executive branch, and so arbitrary tariffs based on both unsound trade reasons and unpredictable nontrade reasons are now viewed as nearly inevitable. Although economists report that the tariffs are increasingly taking a toll on American competitiveness and the American cost of living, and although this toll will surely rise with the imposition of the latest global tariffs, this is providing little political motivation for change. We appear to have decided as a country simply to assume the existence of the added price of a certain portion of US protectionism in every international exchange of goods. The American people are losing, but Trump is “winning,” and this is largely what is reported.
The tendency to count as wins for the president new terms for trade that, by any economic measure, are clearly losses for American businesses, workers, and consumers is a function of a pervasively cynical political atmosphere in which triumphs are based on the achievement of what is sought rather than on the actual merits of the result. Trump has “won” on trade because some countries have capitulated and other countries do not have the economic leverage to challenge the United States one-on-one, not because what he has supposedly won is worth winning for the American people and the American economy. Sought though it may be, trade protectionism is a form of slow economic suicide for the country that pursues it. This is, however, mentioned rarely nowadays in domestic journalism reporting on trade.
It is slow death, too, for a WTO-based world trading system that is supposed to be founded on the mutual benefit of mutual exchange and on the legitimate expectation that global prosperity can be enhanced for all if protectionist forces are contained through an accumulation of trade liberalization. Despite this system, one by one—with the stubborn exception of Trump’s main target, China—US trading partners have decided to bend the negotiating knee to America’s misguided trade demands rather than summon the political courage to counter those demands with a collective assertion of legal right and moral force. Left in limbo by this widespread acquiescence is what is left of the multilateral trade order, in which international trade disputes are supposed to be resolved without coercion by reliance on the impartial rule of law.
In all the accounts of how country after country has bowed to the bullying of the United States on bilateral trade, what is missing most is any real comprehension of the larger cost to the cooperation vital to civilization, which comes from the willful departure, without any justifiable reason, of the long-agreed understanding of how nations are supposed to behave in maintaining some semblance of a world economic order. For more than three-quarters of a century since the aftermath of World War II, international economic confrontation was minimized because there was agreement on a certain order of behavior in trade. This code of behavior has now been thoughtlessly discarded by the very country that did the most to put it in place.
It is not only the rules that have been cast aside; abandoned, too, are the norms that have helped hold the rules in place throughout eight difficult decades. The complexity of civilization depends on rules, but it also depends on expectations of behavior, by individuals and countries, in framing and finding means of human cooperation in a world where interests and aspirations vary widely among countries. Political actors—as the theorists call them—are supposed to act in certain rational ways. They are not supposed to act arbitrarily, motivated, as some of the current US trade policies seem to be, merely by impulsive personal whim.
This has happened before, in a time of world crisis a century ago. In his unfinished novel, The Man Without Qualities, the 20th-century Austrian writer Robert Musil wrote of the decline of the Austro-Hungarian Empire before the First World War: “However well founded an order may be, it always rests in part on a voluntary faith in it … once this unaccountable and uninsurable faith is used up, the collapse soon follows: epochs and empires crumble no differently from business concerns when they lose their credit.” Hence the guns of August that signaled the collapse of a previous attempt by humanity at civilized cooperation and left 40 million people dead worldwide. It is the rules and norms that were ultimately instituted after a second such global conflict to help prevent a third conflagration that are now being ignored.
Where is the voluntary faith that remains in the postwar international order, in trade and elsewhere? Not without reason, the first rule of public international law is that international agreements must be followed in good faith. But if there is no good faith, if there is only autocratic caprice, if there is only strong-arm intimidation, then where is the hope for agreement based on anything but force? The new Trump trade “agreements” are instruments of coercion, not cooperation. The “reciprocal” Trump tariffs are more of the same. For the most part, they exist only as fleeting expressions of presidential grievance, subject to alteration at any moment and for any reason, however specious or irrational. The new world order in trade is the absence of order. It is international chaos. It is one man’s whim of the moment, worth nothing, signifying nothing, subject at any time to further disruptive and costly change, with unpredictable consequences yet to unfold.
