ISSF Policy Series 2021-12: What Nationalism Ended Up Looking Like

https://issforum.org/to/ps2021-12

After a year of Donald Trump in the White House, and drawing on the lessons of the turn inward (by Herbert Hoover and even Franklin D. Roosevelt) during the Great Depression era, I argued that his hyper-nationalism in trade policy was inimical to U.S. economic and diplomatic interests.[1]  His vocal and staged protectionism shirked decades of internationalism and threatened peace and security, as well as profits. Such economic nationalism hurt the United States, and the world, in the 1930s, and it could do so again.  That turned out to be true.

During the Trump term, the United States got very little from its trade battles against its friends and its trade war with China.  Trump embarrassed himself and the nation by confronting close partners like the European Union, Canada, and Mexico with loud tariff announcements against their products.  They retaliated in kind.  Soybean farmers, boatmakers, and spirits producers were among those caught in the crossfire.  In late October 2020, the EU received clearance from the World Trade Organization to impose $4 billion worth of retaliatory tariffs on U.S. goods in response to subsidies to Boeing.  And already recovering robustly from the coronavirus recession, China (PRC) readied itself to resume its trade advantage with the United States.  The bilateral trade deficit that the United States suffered with the PRC in 2016, before Trump took office, was nearly the same in 2019.  Only the pandemic closed the gap, and that because of the sharp decline in consumer spending and investment.  Trump failed to reverse fortunes when it came to China, his priority target in trade.  Doing so would have made America great again.  Instead, China – still adhering to structures and processes that violated market practices and that Trump and his team of nationalists failed to address – continued its rise to greatness. By no means did China appear to reign in its geo-strategic ambitions.  Nationalism was all bluster.  Worse, it undermined coalitions of nations (the Trans-Pacific Partnership, or TPP, that Trump had withdrawn from, being one) that might have contained and changed the PRC.

With dubious national security justification, in 2018, Trump imposed additional tariffs on steel and aluminum, China being the world’s biggest producer of these commodities.  President Xi Jinping retaliated.  Trump backed off.  In June, he announced a two-stage plan to increase tariffs by $36 and $16 billion.  China responded with its own two-stage program of tariff hikes.  This tit-for-tat action threatened not only bilateral commercial ties but a disrupted global supply chains, raised consumer prices, and diminished growth in the United States.  Such a “one-dimensional” approach through tariffs would not stop a mighty predator like China.  Rather than join with the United States’ allies to shape Chinese behavior, in the TPP, Trump’s policies were haphazard and weak.  Typical of unilateral nationalism, they did not have the power of allies behind them.[2]

Beginning his final year in office, Trump imposed new tariffs on almost $450 million of steel and aluminum products, not only hitting China but allies Taiwan, Japan, and the EU as well.  In February 2020, Xi and Trump agreed to phased-in decreases and exemptions for tariffs but the damage was done. By mid-March, the ominous effects of the trade war were apparent when the novel coronavirus pandemic started sweeping the world.  Because of tariff hikes on medical products, U.S. buyers had reduced purchases from China.  They did not replace them with imports from other nations, and shortages ensued.  As the pandemic caused a worldwide economic crisis and a temporary end to decades of robust Chinese growth, the trade war became moot.  Business shut down across the world.  Even in the midst of the pandemic, Trump pressed on with a vengeful and inappropriate trade policy, raising raised tariffs on Canadian aluminum in early August 2020. The administration managed to bring mercantilism in line with isolationism and parochial politics, not to mention cruelty and futility in the face of COVID-19.[3]  Nationalism, as predicted, had abjectly failed Americans.

What of the Trump nationalistic attack on globalization and its institutions, such as trade partnerships, an unfettered marketplace, and dynamic production, investment, and supplies of goods?  He undermined all.  Protectionism did not really boost jobs.  To be sure, unemployment dropped to historically low levels, but the catalyst was recovery at home (which had begun under his predecessor), not tariffs imposed to generate revenue and guard against job losses.  Farmers found themselves in a quandary.  They loved Donald Trump’s jarring diatribes.  They adored his small-government views.  They did not so much like Chinese retaliation against soybeans, ginseng, and other commodities that dried up sales to the Asian powerhouse.  As conservative adherents to the notion of the self-made, self-reliant yeoman farmer, they did not want handouts.  But the Treasury bailed out farmers from their Trump-induced economic straits with large direct payments to make up for their losses in the trade war – and, of course, retain their votes for Trump.  Thus, these patriotic Americans, believers in the market, were tools of nationalism.  Absurdly marketed as a way to transform China, America First economic nationalism did little in that regard. They did not work so well for the rural victims, either, who had, ironically, voted in Trump, who turned out to be a huckster for farmers.

It also turned out that the key element to nationalism was Trump himself.  He reveled in personal diplomacy.  We knew that Trump neither knew nor cared about history.  His trade policy was purely transactional, designed for personal and political gain.  Trade policy focused on Trump.  It did not share in the interests of the nation, the people, or allies throughout the world.  This is why the supposed overhaul of NAFTA – the USMCA – was all noise. It changed the basics of NAFTA not at all, despite Trump’s claim that he had invoked his art of the deal and made America great again by rewriting policy.  To be sure, he had an audience of believers among the angry or desperate electorate.  They had either legitimately felt the brunt of imports or perceived imports to be their economic undoing, though technology and automation were the more likely culprits.  His scornful supporters also hated internationalist cosmopolitans and educated leaders.  But it was Donald Trump, front and center, on the grand international stage, that most appealed to them.  His followers trailed along.  They failed to grasp that he had no systematic plan to help them, short of empty words to make them feel good about America’s supposed return to greatness, again.

Promoting nationalism is not the role of a superpower.  This was not the leadership expected from the United States, a nation that had based its diplomacy for seven decades on free-trade internationalism, rather than nationalist protectionism and retaliation.  The United States remained a giant, but unilateral bluster proved ineffective.  More like Barack Obama, and unlike George W. Bush, Trump forswore the promotion of democracy.  Nonetheless, he launched silly crusades, like trade wars.  Of course, much of the problem lay with the impulsive and boorish Trump himself.  Nonetheless, other nations competed more effectively with the United States in a globalized community.  Post-World War II presidents had understood that challenge, regardless of their party affiliation, temperament, or dreams.[4]  Trump seemed oblivious to this reality or relished the attention-getting chaos it created.

Trump, his protectionist appointees, and his legislative enablers had not only burdened the world economy.  They endangered the United States as well.  Trump crowed in 2020 that he had gotten results in trade.  Farmers and manufacturers loved him for this confrontation with China, and Beijing had caved to the pressure.  Best of all, China apparently respected the United States.  Before denouncing his political enemies, he claimed to a roused American Farm Bureau Federation in Austin, Texas in January 2020 that “we now perhaps have the best relationship that we've had with China in many, many years.”  The deals with China enhanced the U.S. economy and security, though he did not say how.  “We're taking care of our country.  It's "Make America Great Again." It's "Keep America Great." It's whatever you want to call it. We're in the greatest country anywhere in the world, and we're taking care of you.”[5] 

Not only incompetent, Trump lied to the American people, holding out false prophesies like his remarks in Austin to vindictively, and uninformed, listeners. The coronavirus revealed U.S. weaknesses, and definitely Trump’s failings. Fearful of the economic repercussions, at long last, he did not deviate from the first phase of tariff reductions made earlier in 2020.  Yet once again, Trump went back and forth on protectionism, as the economy tanked.  China’s sizable trade surplus with the United States blossomed once again and showed no sign of wilting.  Old friends abroad refused to let Americans travel to their countries.  Allies questioned the sanity of the United States electorate under such an unreasonable leader.  They hoped for his ouster in the November elections at the hands of former Vice President Joe Biden and the Democrats, and they got their wish.

Like a majority of Americans who disapproved of Trump, and perhaps even some of his former supporters who had been whipsawed by his fatuous nationalism, internationalists at home and abroad banked on the restoration of multilateralism, realism, and logic to the core of U.S. foreign policy. During the transition period (as he had in the election campaign), Biden made clear that his administration would seek cooperation, not confrontation, with allies.  It appears likely that the United States will re-join the Trans-Pacific Partnership and other initiatives that Trump withdrew from in his pique of America First nonsense.  Nationalism will, of course, be ever-present, but perhaps the country has laid to rest the era of close-minded unilateralism that is reminiscent of another disastrous period in history, the Great Depression.  It is also just as certain that Trump will go down as one of the worst, if not the worst, resident of the White House – and the provocation to the insurrectionists who stormed Congress on January 6, 2021 clinched that ranking.  In a time when global responses to a pandemic, trade frictions, and nuclear threats are requires, there is no room for Trumpian nationalism – and there never was.

Thomas W. Zeiler is a professor of history and the Director of the Program in International Affairs at the University of Colorado Boulder.  He will publish his latest book, Capitalist Peace: A History of American Free-Trade Internationalism.