Globalisation has failed the world- US Commerce Secretary

You have to credit the Trump administration with one thing: straight talk. Mr Trump gives the lead in this respect- no mincing of words, no beating about the bush, calling a spade a spade.

In an astonishingly candid article in FT, US Commerce Secretary Howard Lutnick makes it plain that, in the view of the Trump administration, globalisation has failed the US and it has, perhaps, failed the world. Buying goods from wherever these are cheapest, moving production to the lowest cost places in the world, growing through the services economy while neglecting manufacturing- the US has no appetite for any of these.

Some of our past leaders believed the lies that offshoring was necessary, borders were not, and our national interest needed to submit to global lower cost of labour for the common good. That approach failed the US, crushed American workers and ripped apart most of the rest of the world as well. It destroyed industries, weakened supply chains and left working people in most western countries behind.

America has turned protectionist in the past year and Lutnick thinks it's paying off:

One year in and the results have been historic. Our exports are up, our imports down, our trade deficit is down by 35 per cent and our budget deficit dramatically lower. Our GDP growth is driven by record investment in the US economy. Our strong 4.3 per cent GDP numbers didn’t appear by coincidence. They are the direct result of America First policies that prioritise US production, resilience and workers.

Lutnick could not have been more blunt. 

But does that not mean that the mantra of globalisation preached to nations such as India for the past several decades was phoney? That nations prosper not by leaving things to firms and markets but through active intervention by governments to promote domestic production through subsidies, incentives and protectionist walls? That self-reliance or what is now called atmanirbharta is central to economic success? 

India turned protectionist in 2018- thereafter, average tariffs started rising. Liberalisers criticised this as anti-reform. They need to check with the US Commerce Secretary.