Trump Tarrific

There was a time in the 80s and 90s when tariffs dominated national discourse. The World Trade Organization and the World Bank aggressively pushed globalization, the notion that goods and services would move freely across national boundaries as a win-win for both the “rich” and the “poor.” The resistance to this globalization agenda mainly came from the poorer countries (patronizingly called “developing” or “emerging markets” in World Bank literature) because they felt that without tariffs and other protectionist policies, their local industry would be wiped out by the multinational mega-conglomerates of Uncle Sam. Everything from Coke and Pepsi to KFC and McDonald’s to Miss World was seen as sinister conspiracies of the imperialistic West to do unto the developing countries what the assorted East India companies did to them hundreds of years ago—come for commerce, destroy local industry, and stay to govern. “Dunkel Draft” and “General Agreement on Trade and Tariffs” might not mean much to the young folk today, but trust me, they once aroused great passion in the days of friendship bands and Tamagotchis.

As the current President of the United States dismantles the entire edifice of globalization, while its supposed victims rush to negotiate with the US to ensure that globalization stays in place, how the tables have turned!

In the 80s and 90s, globalization was the panacea to all problems. It seemed too good to be true—manufacturing of “things people use,” from shirts to metal plates to building material to hair clips would move from Virginia to Vietnam, production costs would plummet from $5 to 50 cents, American society would pocket the $4.50 difference, and displaced workers would “move up the value chain” to better jobs.

Except that things don’t work like that. The notion that people naturally advance from hunter-gatherers to agriculturalists to industrial workers to knowledge workers in an endless upward progression turns out to be wishful thinking—the balloon doesn’t expand at the same rate as it stretches. Also, developing nations, none more than China, deployed currency manipulation, tariffs, and allowed labor practices unburdened by democratic constraints like workers’ rights, environmental protection, and the disruption engendered by changing governments, to systematically drive down costs and through that compete with America on an unfair playing field. As my father once said, “The difference between China and India is China does not have to deal with Communists at the factory.”

So, while Chinese products flood America’s Walmarts and dollar stores, America’s biggest exports—Amazon, Facebook, Google—find themselves shut out from China and replaced by China clones, who simply rip off the original and stay protected by being backed by China’s authoritarian state. Even George Soros—once globalization’s high priest—now opposes China’s closed economic model, recognizing that his brainchild has been weaponized to essentially put Western democracies on a slow clock to destruction.

America today finds itself in the uncomfortable position of net consumer rather than producer—a relationship eerily reminiscent of colonized economies. Historical precedent isn’t encouraging: India under British rule transformed from producer to consumer of British goods, with manufacturing forcibly relocated at gunpoint. Except in this case, America did it to itself, through globalization policies, ostensibly pushed by the instruments of so-called American imperialism.

Oh the delicious irony.

With globalization’s failure apparent, America faces three distinct paths forward.

The Bernie approach aggressively taxes “billionaires” (it used to be “millionaires” once, till Bernie became one himself) through direct income taxation, with the government redistributing wealth through equity programs, reparations, UBI, or nationalized healthcare to create greater equality of outcomes. Though proponents often promise to target only the ultra-wealthy, expansive programs typically require broader tax bases. For example, Obamacare, which was supposed to not raise taxes on the middle class, actually did, as everyone who had healthcare through their employer picked up the tab of insuring the hitherto-uninsured by paying thousands of dollars out of pocket. The Bernie approach will still be progressive in nature: it will hit the wealthy more and the poor minimally.

The Trump approach implements broad tariffs—essentially a consumption tax falling on everyone regardless of income. Consumers would face the actual costs of goods (a $2,000 iPhone rather than $1,000 when factoring in labor and environmental standards), and again, the pain would be felt more by the poor than the rich.

In essence, the Bernie approach believes that government can reverse the effect of globalization; the Trump approach shocks the private industry into figuring out the solution. Which one you believe will work depends on whether you put your trust in government mandarins or captains of industry.

There’s also the procrastination approach: maintain the status quo by borrowing and printing money to fund an expanding welfare state supporting increasingly abandoned regions of America where poverty has become endemic. This strategy bets that the dollar’s reserve currency status will shield America from Zimbabwe-style outcomes—a bet that looks increasingly shaky as countries diversify away from dollar holdings. This outcome would fulfill what appears to be the Chinese Communist Party’s stated aim: de-dollarize the world and then let America’s currency collapse under their debt, and then sing the famous song from Namak Halal, “Shikari khud yahan shikar ban gya” (The hunter has now become the hunted).

The issue with Trump’s tariff strategy isn’t its underlying logic but its haphazard implementation. Surrounded by self-interested advisors, the resulting policy resembles a freshman economics project rather than sophisticated statecraft. Effective tariff regimes require selective application, model-based targeting, and gradual implementation—not the cartoonish formula of normalizing half the trade deficit with a country.

Imposing such a blunt-force solution is like prescribing Dwayne “The Rock” Johnson’s workout regimen to a 300-pound beginner. The approach is so hamfisted that it likely won’t survive even a full Trump term as the wealthy resist policies threatening their asset values, potentially opening the door to more radical redistributive approaches as he basically opens the door for an AOC to be the next President.

As billions are wiped out at the stock market, we’re watching amateur hour: a production where the script keeps changing, the actors forget their lines, and the audience pays for tickets with increasingly devalued currency. Whether this ends as comedy or tragedy remains to be seen, but one thing is certain—we’re long past the point where simple solutions, including doing nothing, can address America’s complex economic realities. The nightmare of globalization has birthed monsters we’ve only begun to recognize, putting in chains those that were supposed to own the key, and the terror of what comes next may eclipse even the darkest economic prophecies of our time.