Trump’s economic nationalism

Right-wing populist Donald Trump’s decisive victory in the 2024 US presidential election is expected to fuel a resurgence of economic nationalism in the US. The 21st century has witnessed a revival of economic nationalism due to shifting global dynamics and domestic concerns. Trump’s rhetoric resonated with many Americans who felt left behind by globalisation. Economic nationalism remains a potent political narrative, influencing both Republican and Democratic platforms.

The American ruling class perceives a rising China as a strategic threat. The decline of neo-imperialist powers, including the United States, and the rise of emerging economies like China pose serious economic challenges to the world’s most powerful country. Economic nationalism is both a policy and a strategy in response to these challenges. At its core, economic nationalism is a reassurance from the American ruling class to ordinary citizens, promising to restore jobs and prosperity once encapsulated in the ‘American Dream’. A significant majority of the US population is dissatisfied with their economic situation. Surveys indicate that 74 per cent of Americans are unhappy with the country’s direction. Many working people are forced to hold multiple jobs to meet their basic needs, underscoring the struggles of an economy that is not delivering for all its citizens.

Economic nationalism also serves as a framework to counter the perceived decline of American global influence and maintain its hegemony. In recent years, this ideology has gained renewed traction, particularly as globalisation faces increasing criticism and resistance. Trump’s victory represents not just a triumph for extreme right-wing populist forces globally but also a significant boost for economic nationalists and protectionists. His win is likely to embolden the far-right in Europe and is a setback for advocates of deeper global economic integration and multilateralism. The Republican Party’s simultaneous majority wins in both the House of Representatives and the Senate mean Trump is in a strong position to pass legislation with little resistance. This control enhances his ability to implement a right-wing neoliberal agenda. In his first term, Trump embraced protectionist policies, and he is likely to increase tariffs on imports to protect and revive American industries. He aims to reverse decades-old policies of deindustrialization, outsourcing, and globalisation. Economic nationalism forms the backbone of his signature slogan: ‘Make America Great Again’. A key goal of this policy is to bring manufacturing back to American soil and restore the country’s competitiveness in this sector.

Once the world’s manufacturing powerhouse, the US began losing its edge in the 1980s. A significant portion of American manufacturing was relocated to countries like China. As a result, many American workers lost their jobs, and once-thriving industrial and mining towns turned into ghost towns. This deindustrialisation fueled frustration and discontent among segments of the working class, particularly against policies promoting outsourcing and globalisation.

The Democrats largely ignored or abandoned the concerns of these working-class communities. Trump capitalised on these grievances during his 2016 campaign, winning key swing states in the Rust Belt. While his performance as president disappointed some of his supporters, leading to his loss to Joe Biden in the 2020 election, Trump staged a remarkable comeback in 2024, winning all seven key battleground states: Arizona, Nevada, North Carolina, Michigan, Wisconsin, Georgia, and Pennsylvania. He reassured his working-class supporters of his commitment to bringing back jobs, mining, and industries. Trump appears determined to pick up where he left off four years ago. Trump’s presidency from 2017 to 2021 left a lasting impact on economic nationalism in the US, reshaping trade policies, manufacturing priorities, and national economic strategy. While his approach was polarising, it undeniably thrust economic nationalism into the spotlight. The US, once a champion of globalisation, free trade, and the free flow of capital, has now shifted toward protectionism. Since the 1980s, the US had pushed other countries to open their markets for global capital to exploit natural resources and cheap labour. American multinationals and investors profited immensely from globalisation, earning trillions of dollars. Now, however, the US is prioritising the protection of its own markets, economy, and industries, often at the expense of others.

Under Trump’s administration, tariffs were imposed on goods from countries like China to reduce trade deficits and protect domestic industries, initiating a trade war with Beijing. He also introduced incentives for American companies to relocate their industries back to the US, aiming to encourage businesses to source materials and goods domestically. Economic nationalism often targets sectors considered critical for national security, such as defence, technology, and energy.

Interestingly, President Joe Biden also introduced policies rooted in economic nationalism during his term. For instance, the CHIPS and Science Act of 2022 allocated $52 billion to boost domestic semiconductor production, reducing reliance on foreign suppliers. Federal initiatives like requiring infrastructure projects to use US-made materials emphasize domestic sourcing. Similarly, the Inflation Reduction Act of 2022 supported green energy initiatives while promoting the use of American-made components. These measures aimed to create jobs and strengthen critical supply chains. Modern economic nationalism, however, does not exist in a vacuum – it has significant implications for global trade and geopolitics. Countries targeted by US tariffs, such as China, India, and members of the European Union, often retaliate with tariffs of their own, escalating trade tensions. Economic nationalism can lead to a decline in multilateral trade agreements, with nations opting for bilateral deals to secure favourable terms.

In response to US policies, other countries may form alliances or trading blocs to counterbalance America’s economic strategies. While these policies promote domestic innovation, they also create fierce international competition, particularly in industries like semiconductors, green technology, and artificial intelligence. Such competition could severely disrupt global supply chains. At its core, economic nationalism prioritises the interests of a country’s domestic economy over global trade and integration. In doing so, it seeks to address economic grievances at home while reshaping the nation’s role in the global economic order. With Trump’s return to power, economic nationalism is set to dominate US policy once again, with far-reaching consequences for the American economy and the world at large.

The writer is a freelance journalist.