Trump Follows Jefferson on Leveraging America’s Economic Might – By J.T. Young (American Spectator) / July 1 2019
And with much greater success.
President Trump is pursuing a Jeffersonian strategy in his use of economic reprisals. Few would readily link the cerebral Jefferson with the visceral Trump, but their shared use of economic leverage to achieve foreign policy ends is a particularly relevant similarity. In contrast to critics’ claims, Trump’s current approach is not without past precedent or current success.
America’s experience with restrictive trade policies predates its national existence. British restrictions on American trade — including duties and taxes — precipitated our independence movement, while resistance — through avoidance and boycotts against British goods — became colonials’ favored response. Our third president’s familiarity with economic reprisal’s effect and efficacy repeatedly led him to it.
Jefferson first used embargoes as Virginia’s governor during the Revolutionary War. Seeking to prevent supplies going to the British, he imposed them against foreign purchases. Later, as president, he instituted them against all foreign trade with the goal of ending Britain and France’s actions against the U.S.
The embargo provoked widespread evasion and forced repeal after just over a year. Yet Jefferson’s lack of success did not dissuade him against his policy, but against his countrymen’s obstinacy in evading it.
Trump has refined Jefferson’s economic reprisal strategy — repeatedly using it in various forms — tariffs, sanctions, and other trade-related actions. Trump’s expansive list includes tariffs on imported steel and aluminum (and threats on autos); tariffs on Chinese imports; economic sanctions on Iran, Venezuela, North Korea, and on specific Chinese firms; and threats to close the border with Mexico.
Trump’s actions are far more sophisticated than Jefferson’s blunt embargoes, and he has primarily aimed them at blocking others’ access to America’s market, rather than Jefferson’s aim at keeping American goods out of others’ markets. Likewise Trump’s goals are broadened — economic (reducing trade imbalances, as with China), domestic policy (curtailing illegal immigration), military (in lieu of direct engagement, as with Iran), or foreign policy (isolating regimes to change behavior, as in North Korea). The intent, however, has been largely the same: The “weaponization” of America’s economic might.
The real difference between Jefferson and Trump’s approaches is not their intents, but their economies’ sizes and their actions’ applications.
Jefferson’s economy was small and inconsequential globally — especially compared to Britain and France’s. America was just a market for raw materials inputs and manufactured outputs. Additionally, it had no economic impact beyond this limited role — its banking infrastructure was nascent at best, and its currency only recently removed from being worthless.
Despite America’s limited economic impact, this was still greater than its military’s. Jefferson therefore sought to substitute America’s economy for its military when confronting the world’s two largest military powers during their existential Napoleonic conflict.
Of course, America was in no position to confront either nation militarily or economically. Given America’s limited power in both areas, unsurprisingly Jefferson’s effort failed disastrously.
In contrast, Trump holds potent military and economic weapons. Compared to Jefferson, he has strengthened the military; however, the economy is his preferred weapon.
America’s economy is the world’s largest. Further, America is the global financial center, allowing it to leverage massive additional resources. America also holds the world’s dominant currency, further enhancing its economic leverage. Trump has used this formidable arsenal to pursue a host of initiatives.
Questions can be raised about his actions’ costs, justification, and long-term prospects, but not the means at his disposal. Nor can his short-term success be disputed — bringing other nations into more serious negotiations than ever before.
On trade, China is negotiating to a degree never before achieved — or even attempted. The same applies to the EU, Japan, and Korea. He has achieved an oft-promised, but never delivered, renegotiation of NAFTA.
Militarily, U.S. sanctions are strangling Iran. In desperation, Iran is trying to intimate war, hoping to pressure U.S. allies to convince Trump to relent. While Trump has not achieved Maduro’s downfall in Venezuela (yet), the nation is thoroughly isolated and eliminated as a regional threat. The perpetual problem that is North Korea continually seeks negotiations.
Trump wields economic resources Jefferson could only dream of, but his intent is no different: to use economic reprisal to achieve policy goals — and frequently in place of military means. Trump also wields military power Jefferson never had. Yet Trump has sought to avoid military conflict, most recently refusing justified retaliation for Iran’s downing of an American drone.
Few modern presidents can point to less military engagement in their first terms. Further, Trump has consistently sought to reduce preexisting involvement — even in conflict with advisors’ advice — while still increasing military capacity.
Critics have labeled Trump’s trade strategy a return to 19th-century mercantilism. Perhaps. Or perhaps it is a response to a long-pent-up popular desire to reorient America’s trade priorities. There is no question, however, that his use of trade — specifically, economic reprisal — as means to advance policy goals is a throwback to the 19th century and Jefferson. The only real difference lies in his much greater sophistication and success in doing so.
https://spectator.org/trump-follows-jefferson-on-leveraging-americas-economic-might/
