Globalism faces its acid test– The fragility of international trade would be put to severe litmus check when one of the two candidates Demo’s Kamala Harris & Republican’s Donald Trump unveil their economic policies that will impact the world – Once they are elected
It’s often said in the stock market and Wall Street by investors that if America sneezes the world catches a cold. Any calamitous disturbance in the NYSE, NASDAQ or SP 500 index is rudely apple carted then it has a ripple effect on the stock’s exchanges of London, Paris, China, Japan, India and others in Europe and South Asia.
The world is glued in and clued in by globalism and international trade and a national election in one country should rarely cause disturbances in the economic fortunes of others. But the rare exception to this rule is the United States which goes to elect a new president on November 05 this year , from among the Democratic nominee Kamala Harris and Republican candidate,
Donald Trump is thirsting for a second term to complete the jobs he started in 2016 and left unfinished in 2020. When Biden per his belief stole the election from him when there was no evidentiary proof for the same.
Both the presumptive candidates for president have made known their policies. Trump has been tested and often he does not do what he says. There is an air of masculinity in his election rhetoric that holds his audiences spellbound but when it comes to governance there is no machismo but only his self-interests and policies to promote his false beliefs.
Trump is 78 and is not in tune with the world. He has lost it. He has not attuned himself with the global reality as to how other countries look to the US for support. He is delusional in thinking like Copernicus that the heavens march (around the sun which Galileo proved wrong – that the sun was a fixed star and planets like earth revolved round it) around the USA. No way.
After the disintegration of the Soviet Union by Mikhail Gorbachev in 1991, that splintered USSR into different central Asian nations with own aspirations to grow like Ukraine which is now fighting for its sovereignty. As the US became a universal policeman in geopolitics and global trade with the us greenback as the major medium of exchange in trade former KGB chief who became Russian President had been wanting to exact revenge by reclaiming all the territories he lost during Gorbachev’s time to build the soviet empire again to challenge the US position politically.
First, he took Crimea and now it’s Ukraine and the world fears that if he goes unchecked, he could expand his sovereignty to eastern Europe starting with Poland.
What’s this past history got to do with the US elections Tuesday, you might ask. Look, Trump and Putin are the greatest of friends and allies. Goes out the window on all sanctions against Russia when he becomes president.
Global trade which had a heft with US and other European players, China and India assume a different dimension. Trump’s tariffs of 10 to 20% on European and South Asian goods is going to increase the prices of the goods coming into the USA making it costlier for the American population to acquire them.
The 60% tariff he has proposed on Chinese goods – believe me the American market is flooded with Chinese goods from toys, to electronic goods and even raw materials for IT enabled technologies and steel for manufacturing- This hefty tariff is only going to hit the bottom lines of American importers who will unconsciously pass on the increased rates of imports to the consumers making their family budgets costlier by $2850 per year as a group of economists have analysed.
Most supporters of Trump are not educated or college going youths who can understand what the economist say – they saw the huge 500-pound man making an argument convincingly saying migrants are taking over America, far from it, China is hitting our trade and we have a huge trade imbalance, tariffs is the only answer to blocking Chinese imports. Says Trump.
Trump says he will abolish income tax and this benefits most the elite top 2% of the wealthy Americans who control the entire economy and not the 98% middle class which will bear the brunt of high cost of goods imported into the country.
On the contrary Democratic candidate Harris promises graded tax breaks to benefit the middle class and at the same time not sacrificing the $5.2 billion revenue it raised from taxes in income and other commodities of trade. The rich don’t go scot free as under Trump but have to cough up taxes. 
Who likes paying taxes to the government in any country of the world. Or does anyone understand how a government will sustain its social welfare programmes without taxes. It’s the same scenario as the Middle Ages in England when the King kept increasing taxes on farm produce and other products of the people in the country side when he found he could not sustain his extravagant regal lifestyle and the treasuries were going empty.
It’s the same phenomenon in all the countries of the world. The USA is no exception. Trump says he will compensate for the revenues lost in income tax by his “Drill Baby Drill” program of digging for oil as he believes the US is sitting on a reservoir of oil far greater than all OPEC countries put together.
Reserves is one thing. How to drill and get them out is another challenge for oil companies. The costs of deep-sea drilling are enormous. Billions of dollars are required. How will companies raise this amount?
Trump is delusional with his policies losing sight of its lack of pragmatism and the people who support not for once think that he will be hard put to keep all the promises he makes if the American economy were not to go into a tailspin with his skewed policies.
While a Kamala Harris victory is, rightly or wrongly, being viewed as a “Biden continuity” outcome, governments and investors see a Donald Trump win as a case of all bets off. The big unknown remains how much Trump rhetoric would make it into Trump policy.
Look at it from Europe’s perspective. It has long got used to the idea that barely anyone in Washington nowadays stands up for a world of freely trading nations – including President Joe Biden and Harris.
But Trump could go much, much further. For him, America’s longstanding transatlantic trade deficit is an evil: he wants Europe to pay a “big price” for not buying enough U.S. cars or U.S. farm goods. And if it turns out that price is the 10% or even 20% export tariffs he has talked about, that could cost European manufacturing jobs dear. They could reroute their exports to other countries to escape the burden of tariffs that makes their products noncompetitive in global trade.
In China, meanwhile, sources told Reuters that authorities may approve as early as next week more than 10 trillion yuan ($1.4 trillion) in extra debt in coming years to revive its fragile economy. And they could go even bigger if Trump – who has threatened 60% levies on Chinese goods – wins, they said. China is now in overheating mode of its economy with piled up inventories and cannot afford at 60% export tariff.
It would have to reroute its trade. Trump may talk big but it’s the Washington Bureaucracy that runs the country and the commerce department will point out the futility of tariff hikes.
Trump victory would also send shockwaves through Latin America – even if the impact could fall unevenly. Mexico, whose automotive sector could face tariffs as high as 200% under a Trump administration, has much to lose. But others could benefit.
Many automobile companies of America, finding labour costs very high, changed their hubs for making small and medium sedan type cars to Mexico, China and India. When trade tensions with Beijing ballooned under Trump’s first presidency, Brazil got a boost as China replaced all its U.S. soybean imports with Brazilian ones.
When the US imposed sanctions under Trump and Biden continued it, Russia found alternate routes to sell its oil to China and India and stay in business.
But one huge issue on which the disagreement between the two presidential rivals is, if anything, even starker is climate change. For Trump it is a “hoax”, while Harris calls it an “existential threat”. This potentially makes the election a decisive moment in the world’s still-lacking effort to combat man-made global warming. Evidence was seen in freak floods in Pakistan, Afghanistan and the United Arab Emirates.
But all this international conferences of COPU, Tokyo protocols and the Paris climate change accords under the UN charter are big balloon for Trump and his supporters , mostly farmers and not even college going, who can’t absorb the nuances of the climate threat. Trump wants a status quo and wants the fossil industry to survive. But Biden wants to meet the UN charter demands of no carbon emissions by 2030 and absolutely no emissions that affect the stratosphere by 2050. India and China are racing to meet their targets. They want to get all the carbon credits too.
Green technologies and EVs are heavily invested in. With Trump it will be a reversal of this policy as automobile companies and others who have invested in green technologies would find it all going down the drain.
That way a Harris win would spell continuity for the industry and its bottom lines. In the nearly 20 years since the first carbon trading market was established as an economic approach to addressing climate change, a patchwork of compulsory and voluntary markets has sprung up. But have they worked? A Reuters analysis asks.
IN summary, a Harris win means continuity of policies initiated by Biden on the climate change challenges. A Trump win would reverse and take us back in time. A Harris win means benefits for the urban middle class struggling with high costs of goods and fuels, and healthcare as she seeks to bring down prices. A Trump win would only mean concessions to the rich that would hit the middle class.
On the overseas front, a Trump win will not actually end wars, it will starve countries fighting for their sovereignty and the wherewithal to fight and preserve their territorial integrity over predators and aggressors. And if the countries lost their fight for self-determination against hegemonistic tendencies of countries like Russia and China, then the world would only see repeat of World War II , HITLER marches into Europe starting with Poland and swallowing most parts of eastern and western Europe.
That’s exactly what Russia has in mind to win the Ukraine war. And China on south china seas and aggressive postures on Arunachal Pradesh, which is part of India, though the people there ethnically seem similar to China.
Contributor, IANS - Washington DC/New York
Executive Editor, Corporate Tycoons - Pune, India
Executive Editor, The Flag Post - Bengaluru, India
Contributor, The Statesman, Hindu Business Line, Sarkaritel.com, Diplomacyindia.com
Former Economics Editor, PTI - New Delhi, India
Former Communications Advisor,
Alstom Group of Companies, SA - France/Belgium
