In less than a week since Donald Trump’s announcements on tariffs, the foundations of the global economy have been called into question. There is the economy of the past and the one now dictated by the White House in Washington.

The economist must not allow himself to be drawn into effective communication that does not support analysis.

Two points to keep in mind:

The first is to remember that tariff shocks, especially when significant, have had, in the past, deleterious effects on the economy and employment. Recovery is slow because production processes have been broken or severely disrupted. Absorbing the shock takes time, and imbalances persist.

The second point is that the premise of Donald Trump’s reasoning is false. No, the American economy has not been exploited and plundered by the entire world. American technology has dominated the world since the post-World War II period, and the dollar is so intertwined with the global economy that leaving it would be the most perilous experience imaginable.

It could be put another way. The major platforms that dominate the Western world—Amazon, Google, Microsoft, and a few others—are American and benefit from the dynamics of the very large American domestic market to provide unparalleled power in the rest of the world. It is this type of dynamic, based on an integrated European market, that Europe lacks to compete.

The United States has also won the battle for soft power. Ask yourself which movies you prefer to watch or which streaming platforms guide your evenings in front of your screens.

All of these things bring in a lot of revenue for the United States, and that’s a big part of what makes its trade deficit tolerable.

No, the American economy has not been dismembered by the rest of the world; otherwise, companies across the Atlantic would not have invested so much in China, would not have made so many technology transfers. The local market was buoyant, justifying the behavior of US companies, which were not at all trapped.

The other dimension of this premise is that American power has been hand in hand with its political power. This has recently been reoriented toward Asia at the expense of Europe. China is the political obstacle of the 21st century, just as the USSR was that of the 20th century, raising the question of NATO in Europe and its financing.

This communication premise also reflects the weight of the United States. The world, according to Trump, is a zero-sum game. The US must find ways to capture the wealth of others for the benefit of America.
By breaking existing rules and individualizing customs duties, each country will be tempted to negotiate to soften its sentence, but this negotiation will be done according to the goodwill and conditions dictated by the White House.

To be continued…