The View From Here: economic control

2025-03-13

OP-ED -- Trump’s tariff policies could lead to world-wide recession and political instability

History has shown us that trade wars escalate global instability and can often be a prelude to open conflict.

Originally published on: https://rabble.ca/politics/canadian-politics/trumps-tariff-policies-could-lead-to-world-wide-recession-and-political-instability/

Since Donald Trump’s re-election as president of the United States a storm of economic and political turmoil has loomed over Canada and the world, driven by Trump’s determination to impose aggressive tariff policies on America’s friends and allies. The 25 per cent tariffs that went into effect on March 4 on imports from Canada, Mexico, and China — America’s largest trading partners — alongside threats of tariffs against the European Union and other nations, risks plunging the global economy into a deep recession, if not an outright economic depression.

If we take lessons from history such economic upheaval could ignite political instability and possible military conflict, but with the US positioned as the antagonist this time against its long-standing friends and allies.

The historical parallels between Trump’s trade policies and the economic protectionism of the early 20th century are alarming and unmistakable. In the aftermath of World War I, the US enacted a series of tariffs aimed at protecting its economy. The Smoot-Hawley Tariff Act of 1930 raised duties on hundreds of imports, prompting retaliatory tariffs from other nations and severely constricted global trade. These measures contributed significantly to the onset of the Great Depression, which ultimately became a catalyst for protectionism, resulting in the rise of nationalism and fascism, which led to World War II.

The interconnectedness of national economies around the world demonstrated that the economic volatility generated by those tariffs had far-reaching and lethal consequences.

Economists and historians alike agree that historically there has been a clear connection between trade wars and military conflicts. French economist Frédéric Bastiat is often quoted for his insight that “when goods do not cross frontiers, armies will.”

His words resonate today when we consider the possible repercussions of the trade war initiated by the Trump administration. When economic ties fray and nations retreat into isolationism, a vacuum is created, one that can be easily filled by inflamed nationalist sentiments. If we look at the reaction of many Americans on social media to Trump’s denigrating remarks about Canada and his repeated comments about annexing the country as the 51st state, we will find many instances of chauvinistic nationalism with militaristic narratives targeting Canada by Trump’s MAGA loyalists.

Economists have consistently warned that the consequences of Trump’s tariffs will not be confined to the countries directly affected. Increased costs on imports will destabilize local economies, raise consumer prices, and ultimately diminish the purchasing power of consumers both in the US, Canada and any other nations targeted by tariffs. Key industries will find demand for their products from export markets reduced significantly as countries which are their primary foreign markets retaliate with tariffs of their own.

The potential for an inflationary spiral also looms large as tariffs will increase the costs of goods in all sectors of the economy, which will be felt by consumers. Coupled with reduced spending power, this could easily push the American and Canadian economy into recession, and the downturn would ripple through global markets given that the US accounts for 26.1 per cent of the world’s GDP. American families, far from reaping the promised benefits of Trump’s tariff policy, will likely face higher unemployment and suffer a decline in living standards instead.

In addition, one cannot overlook the broader geopolitical implications of Trump upending decades of American foreign policy. While casting traditional friends and allies like Canada in an adversarial role, the Trump administration has extended an olive branch to Russia — a nation that historically embodies potential threats to US and European security and to democracy. This inversion of relationships has created a precarious diplomatic landscape, wherein mutual trust and cooperation have been eroded, and the alliance that preserved peace in Europe since World War II has been shaken to core.

With Trump appearing more inclined to treat Russia as a partner while labeling Canada and its European allies as economic adversaries, the global political order has reached an unsettling and critical inflection point with broad implications for the global political order. Just as tariffs have the potential to economically destabilize countries, the geopolitical tensions resulting from this seismic shift in US foreign policy could eventually ignite conflicts that run far deeper and wider than trade concerns.

This begs the question whether there is a path forward to restore economic stability and the international order that has maintained economic stability and an uneasy global peace since World War II. The answer is that there is and it is the US Congress, which would need to take decisive action to reign in a president who is shredding relationships that have been built over eight decades. Because while Trump may wield power through executive orders to impose tariffs, Congress possesses the authority to repeal the laws enabling such actions. But it will take a united stand by courageous members of Congress and Senators against a president pursuing policies that are contrary to the interests of the US and its allies.

History serves as a stern reminder of the devastation wrought by trade wars. If Trump’s “America first” approach to international trade compels other nations to adopt more protectionist stances, economic systems around the world will destabilize, while political extremism rises, and the spectre of military aggression looms ever larger. The connection between trade and peace has been articulated by thinkers like Immanuel Kant, whose assertion still holds water today, that the spirit of trade is synonymous with prosperity, while the absence of commerce could facilitate war.

If Canada wishes to avert the potential catastrophic outcomes associated with trade wars — outcomes that our history has painfully illustrated — it is imperative for our leaders to recognize the urgency of the moment. As the world stands at an inflection point in history, Canada and its allies need to push back hard against American tariffs, and recommit to diplomacy and trade while opposing division and hostility. Just as the present is informed by the lessons of the past, it is up to our leaders to remember that history and ensure that we chart a course that will avoid a potential conflict which would have global ramifications.

Fareed Khan is a government relations and strategic communications professional with more than 30 years of experience addressing public policy issues across a broad spectrum of porttfolios. He has written and commented extensively about public policy issues in Canada and internationally.

2013-02-13

Long Ago Dreams of a "New World Order"

February 13, 2013 -- I recently came across this map of the world that was created to illustrate what the "new world order" would look like after the end of World War II. The map was actually completed before the Japanese attack onPearl Harbor and published on February 25, 1942.

It shows a proposed political division of the world after World War II in the event of an Allied victory in which the United States, the United Kingdom, and the Soviet Union would rule. The map includes a manifesto describing a "New World Moral Order", along with quotes from U.S. President Franklin Roosevelt's Four Freedoms speech.

While there are many points from the policies of the New World Moral Order that are fodder for endless debate, the following three points should be of particular note:

To reduce the burden and criminal waste of armaments expenditures everywhere in the world, the U.S.A., with the cooperation of Latin-America, the British Commonwealth of Nations, and the U.S.S.R. shall undertake to guarantee peace to the nations which will be permanently disarmed and demilitarized after the conclusion of the present war.
A World Court with punitive powers of absolute boycott, quarantine, blockade and occupation by international police, against lawbreakers of international morality shall be organized.
In the New World Moral Order which we seek to establish, besides the essential political freedoms, the following fundamental economic changes are imperative:

(a) Nationalization of all natural resources and equitable distribution of same to all nations…everywhere in the world;

(b) Nationalization of international banking, foreign investments, railroads and power plants….everywhere in the world;

(c) Nationalization of all armaments producing establishments by all military powers;

(d) Federal control of foreign commerce and shipping;

(e) The establishment of a world common monetary system;

(f) World wide limitations of interest rates to a maximum of two percent.

This vision of a new world would have seen political domination by three major powers which would have been problematic to say the least. However, in hindsight the goals of demilitarization, equitable sharing of the world's natural resources among all nations, regulation of international banking and commerce, and nationalization of the arms industry would have been welcomed (whoever was in control) considering what occurred geo-politically and economically in the decades following WW II, and the political and economic state of the world today.

Instead of the political, economic and social benefits that would have been enjoyed had this manifesto been implemented we have today a world which is more militarized, more economically selfish and politically inequitable then any time since World War II. Today we have a world where 5% of the world's companies control 80% of the planet's economy and resources, and where the profits of corporations are placed ahead of the needs of people. We have a world where international banking and commerce has become increasingly unregulated over the past several decades resulting in the world-wide economic crisis of 2008. We have a world where the sale of armaments and military hardware is looked at in terms of its potential for job creation for the countries doing the selling rather then in terms of its potential for inflicting deathand destruction, encouraging militarism and causing political instability in various regions of the world.

Related: Who really contols the world?

Martin Luther King Jr. once said, "When evil men plot, good men must plan . . .When evil men would seek to perpetuate an unjust status quo, good men must seek to bring into being a real order of justice." Looking at the state of society and the world today one has to wonder if "evil men" are the ones who have taken control of the world.

There is no guarantee that the New World Moral Order would have resulted in a world free of political, economic and social injustices. The world doesn't work that way given the general falibility and self-serving character of humans. However, the fact that it was an idea that was discussed at the highest levels, and its details recorded, shows that at one time there were leaders in the world who had a grand vision of a humanity and a world that was less selfish, less greedy and more altruistic then the world which we live in today.

One can only wonder what sort of world it might have been had those plans become reality.