#BTEditorial – Nothing good or sustainable will result from this

No matter how powerful a country’s economy may be, as long as it is involved in international trade in goods and services, a level of interdependence is required for that country to maintain its economic strength.

Therefore, it is not surprising that many countries have reacted negatively to the new United States president’s ongoing threat to impose wildly high tariffs on countries to move them to support whatever he desires to implement.

After just 10 days in office, the American leader has managed to upset more allies than he has done his country’s traditional foes. He has promised to announce, on Saturday, the imposition of tariffs on his closest neighbours – Canada and Mexico.

The 25 per cent tariff on goods coming into the United States from Canada and Mexico, and 10 per cent in China are ostensibly for “the illegal fentanyl that they have sourced and allowed to distribute into our country, which has killed tens of millions of Americans”, according to a White House statement.

Interestingly, the move comes as the Trump administration abruptly ended federal government funding for three months, including funding for programmes that target drug prevention and addiction.

Even as Americans try to come to grips with the whirlwind of executive orders, some regarded as bizarre, it is important to note that the American economy, though extremely critical to the global economic system, also has its vulnerabilities.

In fact, alliances formed by other countries could severely undermine the world power and shake its very foundation.

From the Office of the United States Trade Representative’s website, the American government explains how valuable the support of foreign consumers are to continued American industrial strength and influence.

The US is the world’s largest exporter and importer of goods and services.

As outlined by the trade department: “Trade is critical to America’s prosperity – fuelling economic growth, supporting good jobs at home, raising living standards and helping Americans provide for their families with affordable goods and services.

“In 2017, the US was the world’s largest goods and services trading nation, with exports of goods and services totalling US$2.35 trillion.”

When it came to agricultural goods, the United States exported US$143 billion during 2017 and imported approximately US$ 121 billion over the same period. On the other hand, manufacturing accounted for a whopping US$33 trillion in trade between the US and its export markets.

All this does not include trade in services, particularly financial services.

The trade picture suggests to us that the United States exposes its own vulnerability in any tariff trade battle, though its currency; the US dollar stands supreme as the leading trade currency, at least for nations in the Americas.

Countries such as Barbados, which have their economies so tightly attached to tourism, especially from the United States, dare not jeopardise that sector through any perceived lack of support to the American leader and his policies, no matter how negatively they may impact the region.

The irony of the situation is that even the most friendly and cooperative nations are not immune to unwarranted attacks by the American leader. Caribbean countries will be required to undertake a tepid, even stealth foreign policy to ensure the interests of citizens are protected and preserved over the coming years, in a period that is predicted to be overshadowed by vengeance.

In the interim, the people of the region are best advised to consider contingencies and plan Bs. Just as occurred during the pandemic, leaders are advised to pursue food security as a priority and diversification of the economy, as challenging as those two goals are.

It is important to note that tariff wars and physical conflicts have the same effect– severe disruption to international trade. Ill-effects such as unemployment, economic slowdowns, supply chain challenges, limited product choices, and increased consumer prices are all likely.

This is not a time to sit back and wait for the next shoe to drop. Barbadian and Caribbean people have been through this before.