Columns

It is a travesty of the so-called international rules based order when old rich men (and rich countries) somehow pass themselves off as ‘victims’ of supposed international trade ‘imbalances’, wreaking global havoc at their will and fancy.

 A ‘Wonderland’ tariff punishment

Brutally put, the President of the United States Donald Trump engaged in a classically amoral financial sleight of hand this Thursday. That was by imposing punitive baseline (10%) reciprocal tariffs on goods coming into the US from across the world. Far higher tariffs were visited on selected African and Asian nations termed as the ‘worst offenders.’ Mr Trump read out the supposed tariff imbalances on a giant sheet of cardboard on the White House Rose Garden with evident relish.

In fact, the entire bizarre scene spoke to a screen capture right out of Alice in Wonderland, best illustrated by the Mad Hatter’s tea party with the entertainer US President aptly playing the Mad Hatter while his deferential Commerce Secretary bobbing up and down was the ideal Dormouse. What was actually announced was full of riddles and nonsense as much as Lewis Carroll’s inimitable storytelling.

Essentially, the US President vented his long standing grievance that America was being ‘taken advantage of,’ that the markets are being overwhelmed by cheap goods not ‘made in America’ and that the loss of manufacturing jobs was in direct consequence of this supposed ‘imbalance.’ But as global financial experts of repute sharply questioned, how can the world’s strongest economy take a trade deficit with another country to calculate a supposed ‘reciprocal tariff’?

 US victimised by an island of penguins?

Such a calculation is not ‘reciprocal’ at all. For example, in what way could the US economy be ‘at risk’ from the small African kingdom of Lesotho populated by two million people which has now been slapped with a 50% reciprocal trade tariff on jeans that are brought into the US?  Lesotho had once been called by Mr Trump, who takes no pains to mask his contempt of the less powerful, a ‘country that he had never heard of.’

Meanwhile, we learnt rip-roaringly enough that the US was being ‘victimised’ apparently by bleak Antarctic islands of penguins and seals with no human habitation (the Heard and MacDonald islands) that had also inexplicably ended up being ‘tariffed’ by Trump this Thursday. That was sought to be explained as a mistake based on ‘incorrect data’ indicating once again, the haphazard and sloppy nature of the calculating matrix.

Even more indefensible than the riddle-like if not nonsensical basis of the ‘reciprocal tariff’ was Mr Trump’s announcement on ‘Liberation Day’ that his ‘shock and awe’ punishments will be effective within a short span of a few days. That left affected countries with no room to recalibrate their trade relationships with the US resulting in consternation from the global North to the global South.

Profound global disorder

This was somewhat like the ‘slash and burn’ policies reflected in sudden mass dismissals of federal employees by the Trump administration earlier this year. That arbitrary action was followed by mass re-hiring of those same employees upon a judicial order. But it is one thing when a President whom the American people choses to elect, causes chaos within his own borders and quite another when global financial instability ensues in consequence.

As a shocked world reeled from the ‘Trump disorder’ heralding an impending financial catastrophe of biblical proportions, oil prices sank and stock markets plummeted across the world. That included the US where markets dropped to a dismal low last seen during the covid-19 pandemic. Warnings of a global recession grew with the International Monetary Fund (IMF) pointing to a ‘significant risk.’

Meanwhile the ‘Trump show’ on the lawn of the Rose Garden has given endless scope for American comedians. Merciless ribbing of the President and his less than merry men became a staple as audiences of late night shows fell into paroxysms of laughter. Americans must thank their President for ‘liberating them from the tyranny of being able to buy stuff from other countries,’ talk show host Stephen Colbert guffawed.

America to become ‘weaker, poorer’

But to be clear, this is no ‘laughing matter’ for the global South, quite apart from the flailing about of the global North. The consequences of Mr Trump’s eccentricities have far more serious consequences than higher costs for a cup of Colombian coffee that Americans may have to pay once the reciprocal tariffs come into effect. With a 49% ‘reciprocal tariff’ imposed on Cambodia, a Cambodian factory worker said ‘we will have to starve on the streets.’

Americans themselves are predicted to become ‘weaker, poorer’ as the tariffs bite in. Even so, surreal claims of ‘Trump victimhood’ are just part of international law being violated, be this trade law or human rights and humanitarian law. That ranges from brazen US support for Israel’s genocide of Palestinian residents of the Gaza Strip to the Trump State throwing away the Constitution of the United States.

Inspiring US jurisprudential history on the right to free speech and protest, for long a beacon to dissenters across the world, have been discarded. Mr Trump may claim the singular distinction of tearing the rules based international order to tatters. Horrified, patriotic Americans are calling for mass protests in the US, which will be a welcome sign to the rest of the world.

Sri Lanka Government must act with prudence

But in the face of naked US aggrandisement with barely a fig leaf of decency as cover, European leaders have been heavy on the rhetoric, yet less so on concrete action. Laments on betrayal by a ‘trusted ally’ are many. French President Emmanuel Macron has called for suspension of European investment in the US until the ‘reciprocal tariffs’ were clarified.

In the quickest counter strike to US ‘bullying,’ China imposed 34% ‘retaliatory tariffs’ on all goods imported from the US. This ‘resolute counter measure’ led to more turmoil in the markets even as China’s response was condemned by Mr Trump as a ‘mistake.’ At home, Sri Lanka’s President Anura Kumara Dissanayake’s first (unedifying) reaction to impending US ‘reciprocal tariffs’ of 44% on Sri Lanka, the highest in South Asia, was to appoint a team of ‘experts’ to study its impact.

Earlier, his Ministers dismissed the impact of US tariffs as negligible. There was glib talk of trade pacts with other countries and relying on existing trade preferential agreements. None of these safety nets will be viable or sufficient to withstand the shock of US tariffs on the country’s recovering economy. The Sri Lanka Government must avail itself of the highest expertise that it possesses rather than rely on party loyalists, to plan long term deterrent measures.

Appeasement does not stop a bully

Elsewhere, the language of the community of nations in response to US threats is too mild, too appeasing by half. Mr Trump and his Vice President J.D. Vance’s crude threats to ‘take over’ the semi-autonomous Danish territory of Greenland are a case in point. This is with a greedy eye to controlling its enormous natural resources. In turn, Denmark has been bewildered by the actions of its ‘ally’ the US.

Visiting Greenland, Danish Prime Minister Mette Frederiksen pointed out that, ‘this is not only about Greenland or Denmark…you cannot annex another country, not even with an argument about security,’ she said. That this assertion needed to be made is breathtakingly bizarre. As a baffled Denmark struggles with an ‘ally’, it must realise surely that the US is not an ‘ally in any sense of that word. Appeasement will only further rile the beast.

But whether the world can stand up to the ‘clear and present danger’ that a grandstanding ‘ugly American’ President has become to global order, remains unclear.