It is difficult to fully comprehend the chaos that Trump has created in the past two weeks, especially the long-term implications for the U.S. and the world economy. What is at stake is trust in the U.S. brand as the most respected, safe repository for international trade and investments, plus the world’s most reliable steward of peace and prosperity.
Views from “The Economist”
This respected business conservative magazine described their reaction in a recent issue to Trump’s new trade policies, under the headline “Donald Trump‘s Mindless Tariffs Will Cause Havoc”. Some excerpts:
• “It’s hard to know which is more unsettling: (1) that the leader of the free world could spout complete drivel about its most successful and admired economy, or (2) spurred by delusions, Donald Trump announced the biggest break in America’s trade policy in over a century, and committed the most profound, harmful and unnecessary economic error in the modern era.”
• “Almost everything Mr. Trump said on history, economics, and the technicalities of trade was utterly deluded”.
• “On economics Mr. Trump’s assertions are flat-out nonsense…his grasp of the technicalities was pathetic…the catalogue of foolishness will bring needless harm to America…the rest of the world will share in the disaster”.
Questioning Trump’s Branding Expertise
Ironically Trump supporters believe he is a very successful businessman, despite his six major bankruptcies, and a master brand builder, based mainly on his penchant for nicknaming foes (e.g. Sleepy Joe and Pocahontas) and putting his “Trump” name on everything from wines to ties to Bibles.
But brand positioning is more than creating catchy names; smart branding must be strategic. It has to include a comprehensive plan that is based on relevant facts, realistic goals, and convincing details on how promises will be fulfilled. Ultimately such a plan is key for developing a trustful relationship with customers. Instead, his voters are now discovering that this economic chaos is not what they expected.
Since World War II, the U.S. has earned its brand reputation as that “beacon of hope” for the world (from Reagan) and the most dependable destiny for investors around the world. Unfortunately, Trump’s unpredictability and tariffs have caused consumer confidence to collapse and the U.S. brand to be downgraded from a safe sanctuary to a source of volatility and risks. Today investors are even exploring other places to entrust their savings. With stock markets crashing, prices rising from these “tariff taxes” and a recession looming, it is becoming more doubtful that Trump’s promises of manufacturing revitalization in the U.S., renewed economic growth, deficit reduction, and inflation decline will ever be delivered.
The Scary Mindset Behind All This Chaos
To really understand what’s behind this impulsive action and inflicted damage, one must diagnose the principal cause, Trump himself. His psyche involves a zero-sum instinct and desire to dominate. With his predatory and bullying approach to human interaction, he is obsessed with territorial conquests. Including Greenland and Canada. Trump’s fixation to dominate others has become the chief driver for his administration’s unlawful initiatives to coerce institutions to comply with his conservative agenda and to demonstrate his vindictive mastery over his perceived enemies (e.g. law firms, media, universities, etc.). “Revenge is the oxygen that keeps him afloat”, commented Trump biographer, Tim O’Brien.
This obsession to dominate and humiliate others he disfavors, plus his disregard for collateral damage, is behind his erratic decision making that is disrupting trade and undermining America’s global standing. Trump’s indiscriminate use of tariffs has raised the effective tax rate on imports to the U.S. to 27%, the highest since the early 20th century, according to Ernie Tedeschi, an economist at Yale.
It takes decades to build the credible brand which the U.S. has rightfully enjoyed, but only weeks to destroy the critical trust needed to safeguard security for Americans, protect democracies around the world and insure open trade so essential for reliable economic growth. As David Axelrod said, “this is not a reality show. This is reality”.
