IVES: Steve Bannon’s Economic Nationalism Realized

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Protectionism was long thought dead in the US, having been consigned to the wastebasket of history in 1980 by President Reagan. In 2016 Donald Trump and Bernie Sanders resuscitated the concept. As the extreme wings of both parties now come out against internationalism and globalism, the free market finds itself under attack. The effects of foreign workers on the short-term wages of native Americans were  pivotal issues addressed by the Trump campaign. As the national debate moves away from healthcare and towards economic reform, President Trump has been reportedly “hell-bent” on imposing a steel tariff.[1] The proposed tariffs are rumored to be around 20% and aimed at stopping cheap Chinese steel from competing with domestic American industries.

The politics of protectionism have become even more complex with the recent repudiation of the traditional left-right divide. In France, for example the paradigm is non-existent. A traditional anti-immigrant socialist ran on the “conservative” ticket, while a radical capitalist who pledged to open France up to multinationals and scale back the role of government ran for the “left.” A similar situation can be seen across the world, as what Steve Bannon calls “economic nationalism” is the new trend.[2] In Poland the Law and Justice Party opposes any quotas for refugees while also promising to increase pensions and family planning programs. UKIP’s platform included heavy penalties for multinational corporations that were thought to be exploiting British labor.

The American political class must learn from the example of Europe. The emergence of economic nationalism stems entirely from supranational organizations. In the EU, nations are forced to pursue a fiscal policy that is totally antithetical to its monetary policy economic collapse must be expected. It is a recipe for  nationalist reaction. The free market neocons and neoliberals must address the very real social implications of the immigration that traditional capitalist policy calls for. Trump is a populist reaction to a similar disenfranchisement, but he is nothing compared to a Le Pen. The French politician advocates for price controls, an expanded welfare state, and the immediate suspension of free trade agreements.[3] If the social impacts are not addressed soon, the United States will have much more than harmful steel tariffs to worry about.

In his governance, Trump has shown to be much more moderate than his rhetoric. Merit based immigration would be a step in the correct direction; it is both beneficial to the multinationals that make up a large portion of the economy and can be sold to Trump’s working class base. The proposed steel tariffs will prop up inefficient industry that struggles to compete with heavily subsidized Chinese steel. Reports suggest that the the tariffs could restore up to 10,000 jobs, but will negatively affect the consumer class.[4] How much deadweight loss the American economy can absorb without feeling lasting effects is yet to be seen.

The election of 2016 can be seen by free-marketers with alarm. Increased competition in the low-skilled job market, a side effect of Ted Kennedy’s Immigration and Nationality Act of 1965, has created a nativist pushback against immigration. This is amplified by a pushback from both the extreme left and right against free trade agreements that harm specific industries within the United States. Fighting to maintain existing trade agreements and limiting duties on the post-Brexit UK would be prudent and realistic policy goals under Trump. However, on immigration, a compromise will be required. If capitalist policy ever hopes on running a winning ticket in the next ten years, it must address some of the social implications of globalism and immigration.

[1] https://www.axios.com/exclusive-trump-plots-trade-wars-2450764900.html

[2] https://www.wsj.com/articles/steve-bannon-and-the-making-of-an-economic-nationalist-1489516113

[3] https://www.cnbc.com/2016/11/21/cnbc-transcript-french-presidential-candidate-national-front-party-leader-marine-le-pen-speaks-with-cnbcs-michelle-caruso-cabrera-today.html

[4] http://www.reuters.com/article/us-usa-trade-steel-lobbying-idUSKBN19Z25K

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A native of New Jersey, Alex is most interested in international issues, particularly those involving the EU. He is a member of a first-generation immigrant family and has worked on political campaigns both in the U.S. and in Poland. Alex is a freshman in the SFS and hopes to be an IPEC major with a minor in Russian.

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