Many of us felt despondent at the results of the 2024 Presidential election. Bitterness, despair, disgust and fear. It is only natural given how the world’s most powerful country has elected a dangerous, destructive demagogue.
But it is not enough to fall into moral outrage. We must prepare for the coming storm and what could be an end to Atlanticism.
Liberalism has not faced a more powerful foe since the Cold War. The underpinnings of our national security strategy have been thrown into question. Our access to international markets has been thrown into doubt, undermining our prosperity. The threat of climate change has become even more menacing. Meanwhile, our politics threatens to be overrun reactionaries embolden by Trump’s example.
To be complacent is to invite economic, political, ecological and social ruin. To hope that fawning over Trump and his courtiers, in hope of being spared the worst of his mercurial nature, is a high-stakes gamble. Given Trump’s longstanding admiration of autocrats of their perceived strength, our best bet to project strength.
The good news is that we are not alone in this. Most of America’s many allies face the exact same dilemma. As Sir Ed Davey has said, its imperative that we rebuild our relationship with the EU and seek further integration. High tariffs on all our American exports will halve our anaemic and much need economic growth. Greater integration with the single market would offset some of effects of these tariffs, whilst giving us a stronger bargaining position with Trump over the incoming trade talks.
The same must be applied to defence. With the value of American security guarantees now suspect we must urgently pursue greater co-operation on security and defence procurement with not only our European allies also with the industrial powerhouses of Japan and South Korea, who are already contributing to the Global Combat Air Programme and supplying the Polish army with tanks respectively. At the very least we should aim to reduce Ukraine’s dependence on US military aid, so that Trump is less able to force Zelenskyy into an unjust and temporary peace with Putin. It will prove necessary to make our nuclear deterrent more independent of American companies, like the French have, as the American nuclear umbrella will undoubtedly become far less reliable.
Climate change will also necessitate greater internationalism. With American decarbonisation policy soon to be dead at the federal level, more must be done by other countries to reduce emissions to prevent the worst effects of the climate crisis. As with defence procurement we must seek greater international co-operation when building and developing decarbonisation infrastructure to reduce costs and increase production. This should include international procurement schemes for transmission cables, wind turbine blades, solar panels, and smaller modular nuclear reactors.
However, we cannot solely prepare for Trumpism through internationalism alone. The politics of Trumpism, or indeed any reactionary movement, thrives on a zero-sum narrative; that in order to get ahead in life one must push someone else into the dirt, and conversely, if someone else is improving their lot in life they must be doing so at your expense. This is driving sentiment behind much of the racism, xenophobia, sexism, homophobia, transphobia, and classism that is endemic to so-called right-wing populism. Unfortunately, a zero-sum sentiment is easy to cultivate amid weak public investment, sluggish real wage growth, and a lack of affordable housing. Politicians claiming that there is no magic tree and that times are tough, merely encourage these prejudices to fester.
We must embrace an abundance agenda, making it both easier to bear the costs of being less reliant on America, and making curbing Trump-like forces domestically. High minded ideals and hard-nosed economic policy must be seen as complementary not opposites. This will require higher taxes, looser fiscal rules, and more housebuilding than we have been prepared to accept in the past, but the Trumpist threat is too great.
In times of unprecedented change, we cannot afford to be anything less than bold.
* William Francis is the Youth and Student Officer for the Ealing Liberal Democrats
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16 Comments
I agree William that we must be careful to avoid letting moral outrage get the better of us. He’s been elected, and he’s going to be president, and will continue to say and do a lot of things we don’t like, but we’re going to have to get on with it as best we can.
We need to focus our energies on the policies that have genuine irreversible international impact, as well as attention to those with particular impact on the UK. We must nurture other trade links, and stand up with our allies for the people of Ukraine etc. And we must put the work into showing that investment in R&D and green technologies can boost our economy and reduce our vulnerability to those that control oil & gas supplies.
We must resist the temptation to get embroiled in US domestic ideology or culture wars. Our cultural ties means it’s understandable Brits worry about the anticipated loss of women’s rights in the US, but given our acceptance of the predicted and actual mass oppression of women following Biden’s decision to continue with Trump’s policy of withdrawing from Afghanistan, we (and the Democrats) lost that particular high ground four years ago.
Fortunately, both sides are limited in what they can do by the rules of the WTO.
The problem has been brewing for years and so predates Trump. It has been the EU rather than America which has imposed the higher tariffs. There is a substantial trade imbalance with the USA. The EU exports some 50% more to the USA than it imports from it.
For example the EU imposes 10+% tariffs (the maximum allowable by the WTO) on US motor vehicle exports to the EU whereas its only 2.5% on cars the other way.
It is 25% for some reason on pick up trucks the otherway.
There is obviously a need to have a more sensible trade balance between the EU and the USA and there is scope for sensible tariff reductions on both sides. However due to the imbalance the EU will probably have to “concede” more than the USA.
“Concede” is probably not the right word. Exports are a real cost to any economy. The point of exporting is to be able to import something else of equal value. There’s no point exporting just for the sake of it. Unfortunately the Germans have never accepted what should be common sense to all.
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=USA-EU_-_international_trade_in_goods_statistics
There may very well be WTO rules, but the USA will only abide by them if they feel like it, having made the Appelate body unworkable by refusing to appoint new members since Trump’s first presidency. See
https://www.iisd.org/articles/policy-analysis/wto-dispute-settlement-without-appellate-body
When I worked in the USA in the 1980s and early 1990s, Japan was the bogeyman on trade particularly for Detroit car manufacturers. There were a lot of press aricles about Japan taking US jobs and overtaking the US as the world’s largest economy. Trump was saying much the same thing about the US trade deficit with Japan then as he is now about China.
Japan responded to the 1985 Plaza accords that geatly increased the value of the Yen to the dollar and put a brake on Japanese exports by dramaticaly cutting interest rates. That led to a massive land and stock market bubble that crashed in 1989. Japan is still working through the effects of that crash today.
Germany’s trade surpluses may well flip to trade deficits as its exports to China and the USA decline even without Tariffs. Several of the UK lagest businesses have US operations and tend to benefit from a higher dollar. Trade is not so simple.
Once again, a discussion about trade with confused mercantilist notions of the benefits and disadvantages of exports/imports.
You’d think Ricardo had written his theory of comparative advantage in vain.
William refers to the abundance agenda i.e. increased economic growth and greater productivity which is fine but it must be accompanied by better distribution of its benefits. Some commentators say that although recently the US economy has done relatively well, it’s benefits have gone mainly to the wealthy, hence the disgruntled lower middle income people voting for Trump. John Curtice said the lowest earners kept with the Democrats.
I think Ed has made the right start for our reaction to Trump. Tim Farron has commented that we need a STRONG relationship with the USA, but that depends what it means ?
There are issues like Climate Change, Ukraine, the Middle East and even tariffs where we need to be very strong and outspoken in our disagreement with Trump. He respects people who negotiate from a position of strength. I fear that Starmer will cosy up to him in order to get less economic harms but end up getting little more than we can expect anyway and find that we are ignored in all the major international matters because Trump will be emboldened by Starmer’s wish to recognise the USAs strength. There are world-wide issues on which we must be seen by the rest of the world to be disagreeing with Trump for the sake of our future reputation and influence. Most of all we must not give the impression that we think we must continue to depend on the USA as much as we have done and must instead show we can now go more our own way even if that means a decline in the so-called special relationship.
Patrick Cockburn writes a scary article in the iNews today. Well worth reading.
The 2020s look increasingly like the 1930s, the so-called “devil’s decade”, when an escalating series of crises and wars threated the world. The great danger today is that not only have American voters chosen a demagogue as their president, but that he will exercise his power in a world already catching fire.
https://app.inews.co.uk/full_page_image/09-11-2024-page-32_55c007f7/content.html
A very wide article William. I never understood why right wing Tory ‘global trader’ advocates like Johnson were so keen on Trump. The ex President had noted that the UK has a huge trade surplus with the USA and that he was going to have to ‘ do something about that’. Also Trumps attitude to the Ukraine war also seemed to be at total odds to that of Johnson. It doesn’t exactly look good for UK economic growth and Labour should concentrate on it’s redevelopment of the UK economy whilst Trump is in power.
@Nigel Jones
I’m not so sure. The bottom end of the labour market saw significant real wage gains in 2019-2023, driven by tighter labour markets and higher state minimium wages. Some have speculated was a big driver of anti-inflation discourse; with formerly cheap high-labour intense services costing more.
https://www.epi.org/publication/swa-wages-2023/
@ChrisMoore. It doesn’t matter if we understand comparative advantage, it’s clear that Trump doesn’t and doesn’t want to. He doesn’t understand tariffs either because he clearly doesn’t know that they will put up prices for US consumers, whilst he is promising to cut inflation at the same time.
He clearly thinks that tariffs will just cut imports of foreign goods and hasn’t factored in price rises being passed on to consumers.
Just one of the many problems the Trump presidency will cause for all but the rich in the USA
@Mick Taylor: Trump believes in import substitution. But import substitution takes a long time to kick in, if ever, even in a country of the size of America with its massive natural and human resources.
@ Mick Taylor,
You’re right in saying that Trump doesn’t understand tariffs and comparative advantage but who does?
The argument that we need to be EU members to avoid paying high tariffs is much overdone. The EU has a mean weighted tariff rate of 1.39%. It’s 1.47% for the USA. We seem to get by on 0.72%.
They aren’t real impediments to world trade. They aren’t worth starting trade wars over. If there is a problem with high tariffs it has to be in the agricultural sector. The EU is just as protectionist as anyone in this respect.
https://en.wikipedia.org/wiki/List_of_countries_by_tariff_rate
“Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium. Both suppositions are false. A trade which is forced by means of bounties and monopolies may be and commonly is disadvantageous to the country in whose favour it is meant to be established, as I shall endeavour to show hereafter. But that trade which, without force or constraint, is naturally and regularly carried on between any two places is always advantageous, though not always equally so, to both.” Adam Smith, Wealth of Nations, Book IV, Chaper III (Part 2)
Data from the Office for National Statistics (ONS) suggest the UK exports more to the US than it imports. The US figures suggest the reverse. In principle they cannot both be true. The ONS says there are many reasons why the figures might diverge and they are working on it The UK-US trade relationship in five charts
@ Joe,
There’s no particular reason why trade between two countries need balance. So It doesn’t really matter if the UK exports more to the US than vice versa. It will likely just turn out to be some systematic error in the data which you say the ONS is working on.
It does matter, though, that trade should balance overall. For example, we can have country A which has a trade deficit with country B which in turn will have a deficit with country C which will have a deficit with country A. All can have balanced trade as a result.
Both Britain and the USA have near perpetual trade deficits. That’s for others to decide. No country can force another country to send out more goods and services that it itself receives in return. But any country can voluntarily send more out in exports than it receives in imports. Tariffs might be one way of tilting the table. Currency manipulation is another.
In other words, in any trade dispute between the USA and the EU we need to look at which one is in overall trade surplus and which one is in overall deficit. It’s only the one that is in overall surplus which can do anything about it.
> It will prove necessary to make our nuclear deterrent more independent of American companies…
Please try reading a good book on the topic, like Peter Hennessey’s The Silent Deep, and the then come back and tell us how practical this looks. I understand that defence pundits have estimates of how long we could remain a nuclear power after a US President decided we should not be. We just do not pay the same as France.
A silver lining is that we could concentrate on other areas of excellence. Something for the Defence Policy Working Group.