CPAC stands for Conservative Political Action Conference, which is held annually by the American Conservative Union. At this year’s conference in our nation’s capital, the Trump tandem of Chief of Staff Reince Priebus and Chief Strategist Steve Bannon performed a duet with lyrics from a new presidential songbook of policy and politics. And they were singing from the same page.
For Bannon’s part, a trilogy of policy objectives was laid out. They were described as national security and sovereignty, economic nationalism and deconstructing the administrative state.
For our purposes today, and following last month’s column on trade, let’s unpack the idea of economic nationalism. What is it?
Let’s call economic nationalism a set of policies that would result in more nativist control of our own economy. Although economic nationalism is a hodge-podge of political rhetoric, if we include such notions as increased tariffs or the more complex border adjustment tax that would penalize American corporations for off-shoring manufactured goods sold in the U.S. (while reducing, by the way, their on-shore corporate taxes), then the idea begins to walk and quack like a policy duck.
Last month I suggested a new resistance to globalization and to the integration of worldwide markets and marketplaces. It seems the idea of economic nationalism embodies that resistance and, perhaps, fear. Indeed, free trade — or the more descriptive open trade — suggests to some the lessening of national identity. Would that mean such things as retail labels could soon simply say “Made Somewhere in the World,” or “Made by Proud Internationalists Right Here on Our Shared Planet”? Well, that’s a bit extreme.
Statements made by Donald Trump during the campaign, and now as president, could be characterized as a go-it-alone, unilateral approach to international relations, including diplomacy (or lack thereof), the use or threat of military force and trade. If carried out to its end-game conclusion, this economic-isolationist approach would be markedly different from the way this country has viewed and interacted with the world since Jefferson resided in Paris.
And it would be antithetical to President Trump’s own business model of planting his brand around the world. The Miss Universe Pageant, after all, is global!
Consumers need to understand that the cost of a move toward economic nationalism is a cost that will be borne by us all. It will show up first and foremost in electronics and clothing and then work its way into other products at retail, as well as parts and components for final assembly of manufactured goods.
Dun & Bradstreet reports that economic nationalism would disrupt the global supply chain. “At a global level, Donald Trump’s election success in November confirmed a wider shift towards protectionism in global trade policy,” the company said. “The adoption of protectionist trade policies, closing of borders and pursuit of bilateral trade deals over multilateral ones, all signal that the gap is widening between an interdependent global economy and the sole pursuit of national interests.” This increases supply uncertainty. And uncertainty in markets impacts products, pricing, promotion and distribution.
Echoing that concern is Tufts University Professor Daniel Drezner. Commenting in the Washington Post, Drezner says that the implementation of a Bannon-style economic nationalism would “reward non-tradable sectors at the expense of tradable sectors.” That would mean tradable categories from technology to agriculture could be severely hampered.
Is this a movement or an aberration? Are we becoming Brexitized, or is there a newly found realization that we can survive on our own, with little attention to the world around us? Which is it?
Stay tuned.
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Craig Douglass of Little Rock is an advertising agency owner and research and marketing consultant. He is also the executive director of the Arkansas Good Roads Foundation. Email him at Craig@CraigDouglass.com. |