I am writing these words on a computer that was made in China for an American company. Later, I will play a game of football wearing a blue shirt made in Vietnam for a famous club from Liverpool, which is sponsored by a firm based in Curacao and is in a league with players from 62 nations and investors from Asia, Europe, the Middle East and the United States. This evening, I will drive in my German-made car to watch an Indian film in a cinema owned by a Dubai investment company, which also operates chains of British shops selling electrical goods and wine along with seafood restaurants in the US, hotels in Japan and a Caribbean tourist resort.
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.
When I was born six decades ago, more than half my fellow human beings on the planet lived in extreme poverty; today, barely one in 12 struggle in such dire straits. Yet this concept of benign co-existence is being shredded by the country that promoted it so hard, especially after it helped to defeat its foes in the Cold War – a moment in history that seemed to hold such hope as it accelerated globalisation. The tide turned in favour of free markets, leading to a new consensus championed by Ronald Reagan in the US and Margaret Thatcher in Britain. There was a belief that this was an irresistible and unstoppable force, spreading democracy, freedom and liberal values in its wake around the world.
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 arguments over protectionism versus free trade are wearily familiar. Trump likes to hark back to his 19th century predecessor William McKinley, a tariff hawk who helped trigger a financial crisis before recanting in his final speech before assassination. And I recall studying in history lessons at school the bitter debate over Britain’s repeal of the Corn Laws in 1846, introduced after the Napoleonic Wars to help rich landowners with duties on imported corn to protect prices.
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.
Perhaps Trump’s show in the White House Rose Garden, unveiling his tariffs that infuriated US allies, will be seen as just a strange blip in the history of globalisation.
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.
Yet ultimately, Trump’s foolish actions underscore the dismal political failures that gave rise to his disastrous return to power and scar so many other democracies, including our own, rather than deep structural flaws in globalisation. These include the corruption of politics by corporate interests and oligarchs, the failure to control technology giants whose products can be so corrosive, the lack of effective action to stem inequality or assist left-behind communities, the inadequacy of government and public services, even the appeasement of dictatorships in Beijing and Moscow.
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.
Like capitalism, its success depends upon restraint of its excesses to ensure that it remains a progressive force benefiting humanity.
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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