Post-Trump Globalization and Trends
On 20 January 2021, Joseph Robinette Biden Jr. will be sworn in as the 46th President of the United States to succeed Donald J.
In this file photo taken on December 8, 2020 US President Donald Trump arrives for the Operation Warp Speed Vaccine Summit in the Eisenhower Executive Office Building adjacent to the White House in Washington, DC. - The US Supreme Court on December 11, 2020 dismissed a bid by Texas to overturn the results of the presidential election, which Republican Donald Trump lost to Democrat Joe Biden, in a fresh setback for the president.
On 20 January 2021, Joseph Robinette Biden Jr. will be sworn in as the 46th President of the United States to succeed Donald J. Trump. This change in US leadership raises a question: What will be the face of post-Trump globalization?
According to the views of the Peterson Institute for International Economics, a nonprofit and nonpartisan think tank based in Washington, D.C., globalization is a word used to describe, among other things, the interdependence of the world economy, culture and population through cross-border trade and services, technology, investment, society and information.
Many countries have built economic partnerships to facilitate these movements over several centuries. The term "globalization" gained popularity in the early 1990s of the post-Cold War period, when these cooperation schemes helped shaped day-to-day modern life.
As we all know, Donald Trump, who was installed as the US president on 20 Jan. 2017, seems to have lobbed a grenade at the global economy, including at cross-border regulations on the movement of goods, services and capital and efforts to maintain global stability and security.
Also read: Being Grateful for Surviving 2020
The US played an important role in the formation of these systems in the post-World War II period. This is partly because these systems that arose in the second half of 20th century were markedly different from those in the first half, a division that was marked in part by the two world wars – World War I and II – and because of the major financial and industrial collapse that occurred in 1929, also known as the Great Depression.
The Great Depression
To respond to the difficulties of the Great Depression, 32nd US president Franklin Delano Roosevelt (FDR) implemented a domestic agenda that became known as “The New Deal”, or “The New Deal of Roosevelt” in full.
As a leading figure in his political party, the Democratic Party, FDR later formed the New Deal Coalition in the middle of his third term, which defined modern liberalism in the United States, among other things.
The third and fourth terms of his presidency were dominated by the events of World War II, which ended shortly after he died in office.
FDR is the only US president to serve four terms. The third and fourth terms of his presidency were dominated by the events of World War II, which ended shortly after he died in office.
After his death, representatives from a number of countries around the world gathered in San Francisco on 26 June 1945 and worked hard to design the UN Charter that formed the foundation of the United Nations (UN), which replaced its precursor, the League of Nations.
In addition, the four terms of president FDR also influenced the implementation of the Amendment to Article XXII of the US Constitution, which limits the term of office of a US president to a maximum two terms.
Antiglobalization in the Trump era
In Globalization and Its Discontents Revisited: Anti-Globalization in the Era of Trump, author Joseph Eugene Stiglitz, a leading US economist and professor at New York’s Columbia University, argues that, “The smoke has not yet cleared, but the post-Trump world will almost be surely different from what came before.”
Also read: Being Grateful for Surviving 2020
In the view of Stiglitz, the 2001 Nobel economics laureate, in the three-quarters of a century before Trump, US efforts were focused on the creation of a more globally integrated world through the global supply chain, which proved to significantly reduce costs. However, Trump\'s measures had turned national borders into a serious issue.
President-elect Joe Biden departs after delivering a Thanksgiving address at the Queen Theatre on November 25, 2020 in Wilmington, Delaware. As Biden waits to be approved for official national security briefings, the names of top members of his national security team were announced yesterday to the public. Calls continue for President Trump to concede the election and let the transition proceed without further delay.
Initially, a number of countries – especially developing countries – showed a less open response to globalization.
According to Stiglitz, this was especially true in countries whose combined populations comprised 85 percent of the world population, but they only controlled about 39 percent of the global income; particularly the countries of Sub-Saharan Africa, often referred to as the “forgotten region”, whose combined population is expected to reach 2.1 billion by 2050.
Previously, the opponents of globalization were mainly from developing economies or countries, but the anti-globalization sentiment has now emerged among the middle- and lower classes in advanced industrial countries.
President Trump took advantage of this dissatisfaction with globalization and then crystallized and glorified it through his “America First” and “Make America Great Again” policies.
He also explicitly blamed globalization for the industrial decline now facing workers in certain US regions, known as the Rust Belt, especially following the signing of what he called the "worst trade agreement".
The Rust Belt is located in the Northeastern and Midwestern US, and has been experiencing a downward drift in industrialization since the 1980s.
In response to Trump\'s policies, an extraordinary effort emerged in which the US and developed countries formulated a new set of rules on globalization, while also mobilizing international organizations that regulate this.
President Trump, with the support of many US voters, claimed that the global trade agreements the US had signed, as well as other institutions it had formed, were unfair to the US.
In fact, it is the developed countries that established the rules on globalization, and they also dominate the international organizations that promote free trade regimes, which are not profitable for developing countries.
The end of globalization?
In its 16 May 2020 issue, released at a time when the Covid-19 pandemic had been going on for a few months, The Economist featured the headline, "Goodbye Globalization: The Dangerous Lure of Self-Sufficiency".
The cover story expressed concern about the growing anti-globalization sentiment and the current era of countries in the world becoming more nationalistic and self-sufficient.
The open system of trade that had dominated the world economy for decades had been damaged by the financial crash and the Sino-American trade war.
According to The Economist, “Even before the pandemic, globalization was in trouble. The open system of trade that had dominated the world economy for decades had been damaged by the financial crash and the Sino-American trade war.”
The lockdown policies many countries applied in an effort to stem the spread of Covid-19 had also closed many national borders and led to the collapse of global trade.
For example, the number of airplane passengers at England’s Heathrow Airport decreased by 97 percent in 2020 from the previous year. Mexican automotive exports fell 90 percent in April 2020 and planned trans-Pacific container shipments slumped 21 percent in May 2020.
The world has actually experienced several periods of integration. However, the trade system that emerged in the 1990s went further than it ever had before. China became like the world’s factory and borders were opened to people, companies, capital and information.
However, after the collapse of Lehman Brothers in 2008, many banks and multinational companies withdrew their funds. Foreign trade and investment stagnated relative to gross domestic product (GDP), a process The Economist calls “slowbalization”.
Then came Trump with his trade war, which created mixed concerns about the plight of blue-collar workers and China’s autocratic capitalism with its broader agenda of narrow nationalism and resistance to trade alliances. Under Trump, US import tariffs returned to their highest level since 1993.
The effects of these events include poorer countries having more difficulty surviving and pushing up the cost of living in developed countries. This fractured world will make solving global problems even harder, including restoring the economy. It is under these circumstances that the question arises: Is it time for us to bid farewell to the golden age of globalization?
Post-Trump trends
Populist groups in both developing and developed countries have expressed dissatisfaction with globalization. In fact, only a few years ago, politicians who were already in strong positions promised that globalization would improve the welfare of all.
This combination of Sept. 29, 2020, file photos shows President Donald Trump, left, and former Vice President Joe Biden during the first presidential debate at Case Western University and Cleveland Clinic, in Cleveland, Ohio. Trump and Biden have starkly different visions for the international role of the United States — and the presidency.
As Stiglitz stated, even though smoke is still in the air, the post-Trump world will be in a very different state from before. When the economy reopens, activities will resume. However, don\'t expect a quick return to a cheerful world with freer movement and trade. The Covid-19 pandemic has politicized the movement and migration of people, and entrenched a bias for independent economies. A more inward-looking policy of this kind would weaken global recovery, leaving the global economy vulnerable to the spread of geopolitical instability.
Over the last 2.5 centuries, researchers in the field of economics, beginning with Adam Smith in the late 18th century and David Ricardo in the early 19th century, concluded that globalization would benefit all countries.
If this conclusion is correct, how do we explain that many people in both poor and rich countries are hostile towards the concept? Is it possible that not only politicians, but also economists, made a mistake in implementing globalization?
New and stronger discontent seem to have emerged in the US during the Trump presidency, in part because the US has done greater things – including tackling the problem of injustice – than any other country in the world.
The various gaps between the results of Smith and Ricardo\'s research and today’s reality in achieving the goals of globalization makes us incapable of predicting how globalization will continue to play a role in the post-Trump era. May we still be able to hope for the creation of a new world order, and not a new world disorder.
Satya Arinanto
Satya Arinanto, Professor at the University of Indonesia Law School and Fulbright Scholar in American Studies focusing on the US Constitution
(This article was translated by Kurniawan H. Siswoko)
