United States President Donald Trump’s tariff policies have created economic chaos in their aftermath. The stock markets are off to their worst start to a presidential term in modern history.
The economic implications of Trump’s actions are well-documented. Furthermore, despite Trump’s temporary halt to the tariffs, their impact will resonate well into the future.
But it’s important to understand that the economy is not detached from broader society. Trump’s disruption of the global economy could also lead to an increase in global conflict.
Economic prosperity and war
Economic prosperity does not automatically equate with political stability. Europe prior to the First World War was both prosperous and integrated. Nevertheless, while scholars and activists at the time argued these favourable conditions made war impractical, one of the worst conflicts in human history came to pass.
Domestic economic prosperity can bind societies together. But tensions that otherwise might not be brought into focus, such as regionalism, emerge in times of economic hardship and transition. Reform Party founder Preston Manning’s recent stoking of separatist sentiments in Canada’s West is a case in point.
Trump’s tariffs, if fully implemented, will result in economic recession for dozens of countries throughout the world. They will first impact the world’s most vulnerable countries, many of which have institutions that are either unstable or lack the fiscal backing needed to weather the storm.
An example of such a development in recent history was the emergence of the Arab Spring in 2011. The 2008 financial crisis and ongoing agricultural failure created political strain for authoritarian states in the Middle East. They could not absorb the increased cost of grain to stabilize their societies.
Governments, cognizant of this fact, will look for any means of retaining their power. Redirecting local disappointment abroad can be one such measure, much as Saudi Arabia did by blaming Iran during the Arab Spring.
Look outwards, point fingers
Governments have, historically, used foreign affairs as a means of distracting their populations from domestic problems. This feature occurs regardless of a state’s ideology. The banality of its occurrence in international relations is such that Hollywood made a satirical film, Wag the Dog, on the subject.
Authoritarian states, however, are more susceptible to this phenomenon. Their governments’ lack of popular legitimacy means that an economic downturn weakens one of the levers they use to buy acquiescence from its citizens.
Furthermore, economic uncertainty undermines authoritarian governments’ patronage networks. Not only do such governments lose the support of a majority of citizens to the economic uncertainty, but they also lose the important minority groups they use to maintain their rule.
As such, authoritarian governments in the face of economic uncertainty will look outwards to build their legitimacy. But these governments need an ideology that will motivate their societies. For contemporary governments, one of the most effective mechanisms is nationalism.
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The power of nationalism
Nationalism’s utility for authoritarian states is twofold. First, nationalism emphasizes the collective over the individual. States, by stressing the importance of the nation, can encourage individuals to overlook the personal struggles they face in times of economic uncertainty.
Second, nationalism by its nature creates an “in group” and an “out group.” Governments can use the out group as a rallying cry for its local population. While there are several instances where such developments are possible, China’s increasingly antagonistic stance towards Taiwan is an example.
Governments, by rallying nationalist sentiment, will either indirectly or actively stoke the potential for conflict.
Extending conflict
Economic downturns, furthermore, force governments to make difficult decisions on what programs to cut. Some of the first programs governments chop in uncertain times are those focused on international aid. This phenomenon was already occurring, but tariffs will exasperate it.
These cuts pose a problem for several reasons. Right-wing politicians have alleged in recent months that international aid is ineffective. But that’s not accurate — international aid benefits the countries that provide it; it’s not just a moral imperative. Specifically, it facilitates trade as well as accruing political advantages to the giving state.
The more immediate concern, however, is that many states were dependent upon foreign aid for political stability. The loss of international aid will increase internal instability in vulnerable countries. Just look to the current instability in South Sudan as declining aid weakens South Sudanese social and government institutions.
Not only is this development bad for the societies in question, but it will invariably increase the number of refugees seeking aid and safety beyond their borders.
Individual choice
It’s not just state responses to the tariffs that will create instability. The unilateral application of tariffs, and resulting economic and political fallout, will significantly increase the number of people seeking a better life.
Economic migration is not a new phenomenon. While conflict-centred migration remains the focus of international law, economic migration continues to occur unabated.
The lost economic opportunities in various states affected by tariffs will cause their populations to seek economic prosperity, at first internally and then abroad. This is not to suggest that migration itself creates instability. Instead, large-scale and unplanned migration will create strain both in countries that people leave and in the nations receiving them.
Economic affairs rarely stay within the realm of business. Instead, Trump’s tariffs will create greater instability in international affairs for the foreseeable future.
James Horncastle does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
This article was originally published on The Conversation. Read the original article.
