GENEVA – While US President Donald Trump has promised an “America first” approach to economic policy, it is simplistic – even misleading – to describe that approach as merely protectionist. Rather, Trump’s modus operandi is revanchism. As he put it in his Inaugural Address: “We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs.”
Trump believes that the global economy is rigged against America, and he wants to change the rules fundamentally. But what revanchism will look like in practice is an open question. During the campaign, Trump said that he would be prepared to impose significant and comprehensive tariffs on imported goods. Frankly, however, this is unlikely to happen. Terminating existing trade agreements, or disregarding the global trade rules that prevent the US from unilaterally raising tariffs, would invite a trade war, which would have immediate and harsh economic consequences. It is hard to believe that the US Congress would allow this.
A more realistic scenario is that the new administration will employ four other instruments.
The first is trade remedies, such as anti-dumping duties, which are generally used to combat unfair trade practices, but can easily be exploited by politicians who seek to blame other countries for their own industries’ lack of competitiveness.