Trumps Trade War

Taking a glance at the political landscape right now is enough to cause worry lines across the brows of everyone wondering what the future holds, especially in terms of trade. At the center of the nervousness is the Trump administration. US President Donald Trump, together with his trade advisor Peter Navarro, are certain that the only way to grow the US economy, and the economy of any country for that matter, is to reduce the trade deficit by cutting down the imports.

To put this into perspective, the trade deficit of a country is the total cost by which a country’s total imports exceed the total value of its exports.

What Trump’s financial advisor is suggesting is that the US should tackle this deficit by bottlenecking the imports to the country. These sort of myopic perspectives are potentially detrimental to the growth of an economy, such as that of Australia, which not only has a much narrower stream of exports compared to imports but also whose economic growth depends on the imports in question.

Michael Every’s thought-provoking talk at the Abares 2017 Outlook Conference painted an upsettingly grim but precariously realistic future in which the modern world reverts to the conflict-ridden trade style of the 19th century which was characterized by indiscernible lines between economic conflict and real conflict. The setting up of high tariffs so soon after a period of free trade rapidly devolved into a quest for economical and political dominance between countries.

And that is the future that Every’s words bore; where mercantilist views still reign supreme in a world where countries strive to export more than they allow into their borders. In a sense, Navarro’s suggestion appears much less as a precursor to the future landscape of trade and more as a reminder of the general direction “free trade” is heading in.

Despite the fact that Australia’s GDP is reliant on the exports of the country, there is no hiding from the fact that imports are just as important pillars that hold up the economy. The only “ideal” way around significantly reducing the trade deficit is to ramp up the volume of exports or alternatively witness an increase in tourism. For trade to thrive, no country should be put on a pedestal simply because their restrictive borders allow more outside than they let in.

The stagnation of workers’ wages is bearing down on the economic productivity of countries. Rather than focusing on the benefits of free trade on the country, politicians should work to ensure the equal distribution of the paybacks of free trade.

The alternative is the regurgitation of the violence-dictated military states witnessed in the 19th century.


  1. This guy is literally the worst. I don’t understand how so many people thought that he would make a good president.

  2. It look`s like President Trump is keen on a trade war at the detriment of hiss own country. We should always put our country first.