'Punish every country': Analyst warns Trump ready make world suffer for homegrown failings

Economists have fired off warnings that incoming President Donald Trump's proposed trade war and tariffs on almost all consumer goods will stunt economic growth and substantially raise prices. But if America takes a hit, so will the rest of the world, warned Eduardo Porter for The Washington Post.

The most obvious example of this is Mexico, he wrote. "On Nov. 5, Election Day in the United States, Mexican President Claudia Sheinbaum stepped before the news media to point out a drastic decline in the number of migrants arriving at the U.S. border from around the world, largely because of Mexico’s efforts.

"She also highlighted Mexican success in reducing the flow of fentanyl into the United States" — all because, the writer claimed, she was concerned by Trump's closing promise at a North Carolina rally to put up to 100 percent tariffs on Mexican goods until he is satisfied with border security.

"Mexico is not the only country with good reasons to be afraid," wrote Porter. "America’s president-elect is promising to punish pretty much every country around the globe.

"Thirty-six percent of Vietnam’s exports come to the United States, adding up to a third of its gross domestic product. If Trump were to follow through on his promise to close access to the U.S. market via a 10 percent tariff on imports from everywhere, Vietnam’s GDP would take a substantial hit."

Ireland, South Korea and Cambodia are all in similar situations, he continued.

He added that most of the rest of the world should be left bewildered by why the U.S. would take such a hard line on world trade now.

"The United States is not only the most prosperous nation on Earth, but also it is pulling further ahead of its peers. ... Its gross domestic product per person is 35 percent higher than the average in the European Union, for instance. It is 63 percent bigger, after accounting for differences in the cost of living, than Japan’s."

The U.S. also got to write most international trade rules, crafting the World Trade Organization and the International Monetary Fund, and a huge chunk of the U.S. workforce comes from immigration.

The problem, wrote Porter, is that "the United States has done a dismal job of distributing the gains from these global wins. It is by far the most unequal nation in the developed world."

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And this, at least partially, is behind Trump's ability to breed nationalist resentment among workers. But "that’s not other countries’ fault ... that’s the fault of a political system unwilling to address the social downsides of the many changes, whether technological, economic or demographic, that modernity has brought about, and distribute some of the gains from its winners to its losers."

At the end of the day, Porter wrote, "The people of Hanoi and Seoul and Mexico City and Phnom Penh are still right to wonder why solving these ills should be on them. The responsibility lies with a heartless American social contract that couldn’t care less about its losers."