Aletho News

The Trade War is Here: Some of the New “Facts of Life”

By Maximilian C. Forte | Zero Anthropology | July 2, 2018

In Madeleine Albright’s new book, dramatically titled Fascism: A Warning, she slams the anti-globalization crowd, claiming yet again that globalization is here to stay—it’s a “fact of life”. It must be another of those facts of life that we are seeing today, like “Donald Trump will never be elected president” or “UK voters will ultimately reject Brexit” or perhaps that there will never be a trade war?

If we believe Albright, humans have finally invented something permanent, nature-like, eternal–not coincidentally, eternity is the classic time of myth. Albright is not alone in being unable to recognize reality, even when staring straight at it: this morning Fox News kept speaking of a “potential” trade war being underway. When actual is pushed away into the zone of the potential, we have a serious reality-recognition problem at work. It means that neoliberal free traders—which unites both Fox News and Madeleine Albright, trivial “resistance” motifs regardless—lack the basic terms for speaking about what they are seeing, even as stock markets resume their plunge. But when is a trade war a trade war for Fox News ? What extreme, draconian conditions of spectacular conflict and destruction need to sweep over cities like a dark toxic fog for them to finally agree that there is a trade war? Were they expecting “shock and awe”?

Yes, the trade war is now on. We are officially in Day #2 of an international trade war that involves the biggest players in the world economy—the US, China, Japan, the European Union—along with Canada, Mexico, Brazil and others.

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Set everything else aside, this is a time not to be missed:
this is the biggest event since the last “can never happen” event,
that being the election of Donald Trump.
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In addition to a trade war between the US, Canada, and Mexico, that formally started yesterday (July 1, 2018), another big turn happened: Mexicans elected a populist and left-wing nationalist, Andrés Manuel López Obrador. North America now has two nationalists occupying the highest political office in two of the three nation-states of the continent. NAFTA is almost certain to die at this point.

It’s Canada’s turn next, and all signs are that Justin Trudeau is in very deep trouble. The next national election, which happens next year, will go to the party that sounds the most nationalistic. That almost inevitably strikes out the now ruling Liberal Party of Canada, and almost certainly takes down their ambiguously slightly more “left” twin, the New Democratic Party. It will be up to the Conservatives, who are Canada’s ideological equivalent of John McCain, to change their stripes, reach back decades into the history of Canada’s conservative politics, and rediscover ways of posing as nationalists. If the effort all proves futile, then the provinces are going to be left wondering what the real, material, practical benefits are of remaining within the confederation—and it’s not like there is a strong nationalist cultural and ideological content that holds the country together, so the material side of things matters an awful lot. (Ironically, Canada lacks a system of free trade domestically, between provinces, and if it had one what would be added to the Canadian economy would dwarf the value of agreements like the TPP by a dozen times). Material politics matter most now, because Canada lacks a national identity politics to fall back on. Right now the only identity politics that prevail in Canada are the identity politics of small fractions of minority groups, of niches within niches set in motion against other niches in the competition for rewards, recognition, and special rights. But by all means, keep “marching for women” if you think that is in any way relevant and a meaningful response at this time.

Canada as such is deeply unprepared for what is happening today. Already the ruling Liberals have signaled just how ill-equipped they are to meet this historical moment head on: they have announced a series of palliative, band-aid measures to compensate companies and workers for losses. That is what you do when you expect all of this to blow over soon. However, President Trump already made it clear that if counter-tariffs were slapped on the US, the US would then escalate further. Canada and Mexico have essentially called Trump’s bluff, a dangerous thing to do since they are playing Trump’s game, and you can therefore expect the US to follow through with more measures, and on and on this will go.

Thus the band-aid measures, being conceived by a short-term mentality, will simply not suffice as deglobalization becomes the new “fact of life”. The next party in Canada to win an election would not only need to sound like it is nationalist, if it is really smart it will do what Trudeau failed to do: establish an infrastructure, with incentives and subsidies, for new national industries that are fully protected, operating within a protected domestic market. Canada builds jets, trains, and ships: there is no credible reason it cannot have its own line of automobiles—Canadians need to rush to neutralize Trump’s planned auto tariffs. The Canadian government may need to launch new state-owned enterprises, and would need to decouple the pricing of petroleum from the world market. Canada is self-sufficient in oil, and could go for at least two centuries without imports—it is time to make oil as cheap as possible for Canadian consumers and producers, and it ought to be close to free.

(In my small corner of the world, I already started to work toward reestablishing a Canadian national anthropology, in spite of many criticisms, which would make a true decolonization more practical, because it begins where it needs to begin: by being anti-imperial. If you do not get that point, then you really ought to stop using words like decolonization. Likewise, just as Canadians are only now toying with ideas of boycotting US products and not traveling to the US, I have already been doing so for a decade, regardless of the definite professional costs and consequences.)

What is also quite amazing is how Trump is compelling everyone else to act like Trump. The international response to Trump’s economic nationalism, is the replication of economic nationalism. Tariffs are met by tariffs, protection met by protectionism. Nationalism is coming back, in full force. The defeated elites are right to cry over the loss of a “rules based international order,” what others have called a liberal international order, or what George H.W. Bush heralded as the “New World Order”. While the resurgence of mercantilism does not mean the end of imperialism, because the two are fully compatible (study the history of the British, French, German, Japanese, and American empires to see why), what this new phase in world history signals is the death knell for neoliberal globalism, and for the notion of a US-led global order serving an unmoored transnational capitalist class. Deglobalization will thus be matched by multipolarity. Sure the world can still prove to be a “dangerous” place—it’s not like the world was in any way a safe place under the dominance of neoliberal elites (or do I really need to mention Korea, Vietnam, Grenada, Panama, Yugoslavia, Iraq, Afghanistan, Libya, Yemen, Syria, Somalia, Colombia, DR Congo, plus all the debt crises, structural adjustment catastrophes, refugee surges, financial collapses, and 9/11 to make the point?)

Suddenly, I am left with the task of possibly dumping my reassessment of Trump on US empire, and going back to my original assessment, especially as Trump the nationalist of 2016 seems to have come back. Still, deciphering Trump’s position is not without its challenges, especially given the notorious chaos and factionalism in the White House on trade issues. Trump’s assistant on trade and manufacturing, Prof. Peter Navarro, in a fairly reasonable piece, articulated a position of maximum free trade—that is not economic nationalism, as much as it would appear to be unvarnished neoliberalism. However, this might just be a rhetorical tactic: to call out the hypocrisy of free traders given the lack of actually free trade, in order to permanently shut down any more talk of free trade. The fact of the matter is that for the last several years, protectionist measures have been on the rise worldwide, and most of the world had already receded from putting into practice the ideals of free trade. Trump seems to have decided to end with all the pretense, and to accelerate the process towards its logical final conclusion.

Canada is projected to be the number one country to be hit hardest by US tariffs. In the meantime, Canadians are routinely lied to by the Liberal government, the “defence” industry, think tanks and associated academics, which would have citizens believe—as an article of faith—that Russia is the biggest threat. Good call, “Russia,” nice one, real smart.

So welcome to the time of deglobalization. Anyone who is telling you that this time is otherwise, is just not worth your attention. Have a great day.

July 2, 2018 - Posted by aletho | Economics, Timeless or most popular | Canada, United States