Trump declares (trade) war…for now

Donald Trump’s inauguration marked a change in the world order, the free market liberal order that continued from 1945 in the West, and spread across the world around 1989. Here’s the transcript of the entire speech. But here are my quick three takeaways. The speech means, firstly, Trump is planning a 1930s-type national nation building project. Secondly, and inevitably, there’s now all possibility of a devastating trade war. And thirdly, Islamists are now the prime target of the administration.

The speech highlighted the new American credo of manufacturing in US, with American workers, and American infrastructure getting priority. It is unclear how he can do it, however, as if he imposes legal procedures on manufacturing outside US, his own company which outsources to China, will also suffer. The world is not stuck in the 1930s, and one cannot change the direction of capital flow or alter the comparative advantages. The center of gravity of economy moved to the East, and one can only adapt so far.

Trump’s inauguration statement was straightforward and refreshingly neutral in tone. In a certain way, it was without all the ridiculous and optimistic and hopeful balderdash we seem to have expect from American inaugurations. This was like a whistle for a firing squad. The world is now without leadership, and every power for its own. If you’re a strong power, then be stronger, if you’re weak, choose a side. Simple as that.

Researchers who deal with grand strategy often tries to find historical patterns in foreign policy. 

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