What US slapping harsh tariffs on imports of aluminium and steel means for the rest of the world
Anarchy has always been the defining yardstick of world order owing to lack of mechanisms of regulation. With states acting on the basis of securing national interest, it makes the picture look murkier.
With the onset of globalisation, factors like trade, information technology, communication, rise of non-traditional security dimensions led to many opportunities for cooperation. Focus on absolute gains in relation to interface with the other nation also paved way to make sense of global politics with international organisation like the World Trade Organisation offering a platform to negotiate significant issues of trade, tarrifs, agreed rules etc.
As we move away from theoretical explanations, one finds that right from the onset of the Donald Trump era, the policy pronouncements of the United States administration have been skeptical of the idea of an interconnected world. The plea to restore the glory of the nation are inherently protectionist and unwelcoming of the "outside" as seen in case of the Paris Climate Agreement too.
President Trump announcing the tariffs of 25 per cent on steel imports and 10 per cent on imported aluminum are also in tune with that. There is tremendous pressure that these institutions have come under.
No dobut this neo-liberal globalisation was always contested. It is argued that this order was biased as it was certainly beneficial to US corporations. However, this inequity cannot gloss over the fact that in this drill, China, India and other developing countries too were beneficiaries. Openness in trade and investment did offer something to tackle poverty and unemployment.
With the same logic, the WTO as an anchor of global economy, it was looked as "Janus-faced". If, on the one hand, it offered hope for world governance, then, on the other, there were remarks about its covert democratic deficit and legitimacy.
China defied it openly with its state capitalism leading unfair advantages and that round of talks were inconclusive owing to cumbersome nature of trade-offs. With the latest Trump decision, it gives a cold shoulder to the need to streamline global order, or if we were to put it simply, it makes ailing person more vulnerable rather than offering any cure.
To favour America over others was the focal point of his campaign for the presidency. Even in the past, US presidents have resorted to tariffs and quotas as protection against dumping or subsidies. The current Republican orthodoxy for reasons of national security brings forward the debate for other countries to ponder whether future lies with free trade or protectionism.
Countries like the US were also upset with dispute resolution mechanism of the WTO, but larger concern is that should economic nationalism lead to rampant dismantling. The Trump administration's remarks for national security argument in case of tariffs on steel and aluminum imports surely are not rational when juxtaposed with the fact that counter- retaliation might cause more losses.
This shall hurt the people who are already battling unemployment, rise of food prices and lead to a cascading effect on commodity exports with steep tarrifs. Further such rash actions brings into focus lack of wisdom which was meant to be used in case of war and scant regard for WTO rules.
At the geopolitical level, if the US is withdrawing itself from leadership, China’s new assertiveness is clearly depicted in the One Belt, One Road initiative.
However, one cannot dismiss how the domestic intricacies of China are meshed up in manipulation. Further, both the US and China are doing scarce little in giving up on their chauvinistic nationalism, which hampers world order as well. There is a crisis that looms over the alternative to the global architecture created in the aftermath of the Second World War.
War comes at a cost and loss. Trade wars are not any different here. Shared values have always existed and yielded profit for all. Stand-offs were followed by attempts for mutual agreements. If the United States ventures into this monumental contest, it is trying to end an already disputed organisation.
These moves have laid bare the need to deliberate whether aggression strike a right chord with opposition and bargaining. With the collapse of multilateralism and the hunt on for the next hegemon, the world future seems to be pushed towards a bleak multi-polar anarchy.