By Enrique Castellanos, Professor of Economics at the University of the Pacific
Trump’s first 100 days have been almost a world economic cataclysm. At the beginning its determination and dynamism, it seemed like a refreshing air in the midst of so much political neglect: its fight against illegal immigration, the cut of expenses and even correct extreme government policies were applauded by tyrias and Trojans. However, governments are not corporations and a president is not a CEO or general manager. The dynamics and complexities of governing the world’s greatest economy have proven to be a very big challenge for this unique real estate entrepreneur.
For several weeks I have seen Fox News (the Pro Trump channel) to try to understand rationality in the economic measures of this government. What I have found is – almost always – hurras, litanies and mantras of unconditional support to Trump. The president is playing 3D chess, don’t try to understand it, just follow him.
However, the most elaborate thing I have heard is the thesis of the great strategy to reindustrialize USA, where tariffs or rates are just a table of the table. These measures will be accompanied by expenses, tax reduction and refinancing of the “supposedly unpayable” American public debt. All of the above will give a helm in its economy; Which would now be reorient to strategic and national security industries, this in turn will allow a recovery of labor employment, the reduction of the commercial and fiscal balance, in short, an accelerated economic growth. Or, in simple words of Trump, the patient had to operate it and at first it will hurt. However, everything indicates that the patient would be much worse.
The saddest thing is that this patient was not sick: his GDP grew at 3%, its 4% unemployment was historically very low, inflation had returned to the acceptable levels of 3% and the famous American public debt has been and is totally manageable (after all USA. What was the need for urgent and radical changes? An enigma that is probably more in the field of psychology than the economy.
The problem of this reindustrialization strategy is that it arrives – at least – about thirty years late. China and Asia in general have been the factories in the world for many years. The US lost this battle with a painful consequences for its former manufacturing cities and working population. However, in these decades the US economy rearranged and remained the leading country of the world. For the USA to “go back to time” I would need to develop value chains, redesign logistics, resent labor, change international treaties, etc. That is, as if the Peruvian government today came up with Arica and Tarapacá. A little late, right?
Additionally, the US underestimate China. A nation with four thousand years of a work, resilience and discipline. The XI Jinping dictatorship has all the political management to ask for prolonged sacrifices to the Chinese people. Instead, according to politologists, Trump would end the track next year. If the Americans do not see rapid improvements, next year the Congress would possibly pass the Democrats.
But Trump goes forward and, apparently, there is no responsible adult within his team that confronts him. Worse, half of the American people blindly believe what they say: USA has been abused by the world, which has renegotiated tariffs with 70 countries in a week, that US reindustrialization has already begun, in short, that they have been saved from the abyss. In the words of his co -religionists “America Is Now Kicking Ass” (USA is kicking his butt to the world).
That is why the headline, with the poise of who knows no doubt, a phrase attributed to Borges. Because I would like to sow the doubt in some Trumplover that, perhaps, its leader is not so cunning and wise, perhaps, Trump does not always tell the truth, perhaps, the US does not need a “day of liberation”, perhaps, it is better to concentrate on tip technologies and artificial intelligence than in manufacturing and cars, and perhaps – God protects us – Trump does not know what to do in 90 days Tariff But as reality always surpasses fiction this story will continue.
