My day demonstrates how money, trade and societies are so entwined. This is the legacy of decades of globalisation, the most successful economic creed in history that swept the world and transformed lives. It is based on free trade and unfettered borders for goods, services and sometimes people. It led to astonishing advances for humanity, symbolised by the power of my laptop computer. And it has been highly progressive: over the three decades leading up to the 2020 pandemic, we saw a doubling of per capita income, average life expectancy rise by a decade, child mortality fall to record lows and at least one billion people lifted out of poverty.
Now, Donald Trump demonstrates the naivety of such optimism. His imposition of sweeping tariffs last week marked the moment that the world’s superpower turned its back on the globalisation creed it sold for decades, accruing immense wealth for itself while helping to shape modern societies. The President’s grasp of economics was shaky, his logic flawed and his rhetoric typically nasty. Plunging global markets have delivered an instant brutal verdict on his daft stance. But have no doubt about the historic significance of this moment with the destabilising of business, shattering of economic alliances, sparking of trade wars and sickening sight of a narcissistic billionaire deliberately inflicting economic harm on people around the world.
The same battles over borders, business, trade barriers and living costs that split the Tories so badly, consigning them to the political wilderness for 28 years, are still being fought today around the world – as we see so clearly in the US.
square WORLD AnalysisEven Trump supporters fear his tariffs will cripple America
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Yet this seems unlikely when the mood has been turning against free trade since the 2008 global financial crisis, fuelled by the pandemic, the threat of dictatorships, concerns over migration and surging populism on both left and right. This was seen in Britain by the backlash of Brexit, with the strongest support in regions hit hard by the flight of manufacturing. Meanwhile Trump is building on the protectionist legacy of Joe Biden who pursued an aggressive industrial policy with big subsidies, demands for domestic production and export bans.
Flashing warning signs were ignored for far too long – not just the rise of populism and extremism but the rising number of “deaths of despair”, falling life expectancy, plummeting birth rates and surging mental illness. Fentanyl made with Chinese chemicals and traded on US streets by Mexican gangsters, after all, shows the dark side of globalisation.
Yet as Sir Keir Starmer wrote in The Sunday Telegraph, the world as we knew it has gone. “First it was defence and national security. Now it is the global economy and trade,” he said. “Old assumptions can no longer be taken for granted.”
He is right. This means accepting that the US can no longer be trusted as an ally under its current destructive regime. It means forging far stronger relationships with any nations prepared to fight for democracy, freedom and fair trade in the face of a bullying superpower. And it means finally tackling the glaring state failures that undermine the benefits of globalisation, rather than reheating old arguments from the past, building walls to divide the planet and dragging people back into poverty.
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