The Telegraph newspaper published says that Biden’s secret trade war will cripple Britain.
The outside world sees the United States as a highly polarized society in social terms, while there is a new consensus in that country on economic nationalism.
This term refers to the state’s intervention in the economy and not leaving it to the mechanisms of the free market, and this approach would “make America and the world poorer,” according to the Telegraph newspaper article.
Back in 2016, most people understood that the election of Donald Trump as president of the United States would follow a shift from the free-trade consensus embraced by his predecessors: Reagan, Bush senior, Bill Clinton, Bush junior, and Barack Obama.
Only few expected that this shift in trade would be accompanied by growing skepticism about the idea of free markets in general, not to mention the degree to which a Biden administration might accelerate America’s shift away from free trade.
The Biden Act of 2022 on electronic chips, which provided $280 billion to boost research and development, build a stronger STEM workforce, and enhance semiconductor capabilities in the United States.
The accompanying bill – the 2022 Reduction Inflation Act – is similarly intrusive.
Far from dealing with inflation, “the law provided $370 billion in tax breaks, grants, and targeted subsidies to boost America’s manufacturing sector, as well as provide something dear to the American left: the transition to green energy”.
The Biden administration is deliberately seeking, without a tendency to apologize, to allocate capital and labor force to sectors of the economy through the federal government, rather than leaving it to the markets.
This trend is supported by US lawmakers, some of whom stand on opposite sides of social issues while fully agreeing on economic policies, for example the belief that allowing China to join the World Trade Organization costs Americans jobs.
The reasons for this broad shift toward economic nationalism include national security concerns about China, concern about climate change, and a desire to help working-class Americans whom populists of the left and the right contend have been the primary losers from globalization… It’s clear that American confidence in the ability of Markets to efficiently allocate resources have vanished.
The long-term consequences of this shift will be dire for the US economy, as well as for the world, according to the author.
The policy of tax exemptions and generous subsidies for US-made products exposes governments, all over the world, to pressure towards providing similar subsidies, including Britain.
For example, the manufacture of cars is one of the main export industries in Britain, and America is currently the second largest market for purchase.
In case of the European Union and Washington enter a war over electric cars, the UK, after its “Brexit” from the European Union, may find itself marginalized and helpless, unable to bear the cost of retaliatory sanctions.
As the saying goes, there is no gain in war: there are varying degrees of loss.
We may be in the preliminary stages of America embracing economic nationalism.
If so, the West is in for a wild ride, as the axioms associated with the Reagan-Clinton years (the free market approach) are replaced by the Trump-Biden set of priorities.
The end result will be not only a less prosperous America, but also a world that is more divided and poorer economically.