OPINION:
President Trump is reimaging U.S. foreign and international economic policies, and Americans won’t be richer.
After World War II, the United States fostered security alliances — NATO and regional partnerships with allies in the Pacific. It championed free trade through the World Trade Organization, the North American Free Trade Agreement and similar regional arrangements.
Our partners abused our generosity. They could afford more generous social programs and cheaper state-subsidized health care by not spending enough on their defense.
We erred by admitting China and Russia into the WTO.
China became the dominant manufacturing powerhouse by subsidizing industries where its exports enjoy a comparative advantage and those where it should rely on imports but doesn’t. Russia sold oil and other resources to rebuild its military and now threatens the security of Europe.
Global commerce flourished, but Americans paid a heavy underwriter’s burden by spending more on defense, prescription drugs and medical care and bore the inequality imposed by ever-larger trade deficits.
America is wealthier thanks to globally dominant financial institutions centered in New York and excelling at high-technology design and services.
Our coastal elites are prosperous, but the nation’s middle class is hollowed out and unhappy.
The dollar’s status as a reserve currency permits us to consume more than we produce, but too much of what we use is manufactured abroad.
Americans live better than peers in other industrialized countries, but averages are deceiving. Ordinary Americans have seen the basic elements of middle-class life — affordable homeownership, college and groceries — escape them, and life expectancies decline.
Cultural elites who control the gateways at elite universities to the high life in New York, California and satellite centers of finance and technology imposed open immigration, climate change fundamentalism, racial and gender quotas, and cultural controls right down to acceptable pronouns.
For Middle Americans, a descent into economic struggle and guilt became the dividends of globalization — even for “underrepresented groups” that cultural elites said they were in business to elevate.
Populism is the post-Marxian revolution of the Western working classes.
Mr. Trump’s complaints are similar to those of workers in Germany’s northern Ruhr region and other European rust belts.
The American populist impulse is to withdraw from foreign entanglements, refocus attention on securing borders and restore American manufacturing and good-paying jobs through protectionism.
The complaints of formerly Democratic voters — working-class Whites, Hispanics and Blacks — that delivered a mandate to Mr. Trump are actualized in his transactional policies.
Before even reassuming office, Mr. Trump threatened Hamas to accept a ceasefire in the Gaza Strip. He is pressuring Ukraine to settle with Russia and demanding access to its rare earth minerals as the price for American aid.
He is using tariffs as a club to bend knees in Colombia, Mexico and Canada to deport illegal immigrants and better enforce our borders, and veiled threats of military force to wrestle Greenland from Denmark and retake the Panama Canal.
Protectionism is expensive. It denies us access to cheaper resources and labor as we manufacture more for ourselves and become less efficient. Mr. Trump’s flavor is hardly unique.
President Biden’s industrial policies were financed by federal deficit spending and printing money, and the inflation that followed was a not-so-hidden tax that lowered ordinary folks’ real incomes.
Modern factories are profoundly less labor-intensive than Nixon-era manufacturing. Workers who land manufacturing jobs will live well, but those relegated to the service sector will pay more for cars and be worse off.
Europe and Asia will respond to American protectionism with tariffs, and global commerce will grow more slowly and require fewer international dollars to lubricate it.
Americans have been paying for ever-larger defense budgets and lower taxes with ever-larger federal budget deficits — 6.6% of gross domestic product in 2024. We finance these by selling bonds abroad, which results in larger trade deficits.
U.S. multinationals and financial behemoths will earn fewer profits abroad, translating into less research and development, growth and resources to divvy among Americans through Washington’s tax and redistributing machinery. Selling U.S. Treasurys abroad will make financing big deficits harder.
More inflation and even higher interest rates will follow.
When the Democrats return — they always do like your in-laws at the holidays — we’ll again get woke social policy, climate change fundamentalism and the same protectionism rebranded as industrial policy. Remember, Mr. Biden did not roll back Mr. Trump’s tariffs but added subsidies for semiconductors, electric vehicles and other green manufacturing.
Either Americans make the tough choice to reject Mr. Trump’s bullying of our neighbors and isolationism, or the country will continue to swing back and forth between radical populist and liberal governments and become poorer for it.
• Peter Morici is an economist and emeritus business professor at the University of Maryland and a national columnist.
Please read our comment policy before commenting.