COUNTERING TRUMP´S POLITICS OF FEAR / PROJECT SYNDICATE

Countering Trump’s Politics of Fear

US President Donald Trump’s opponents must devise policies that reflect, rather than dismiss, working-class voters’ concerns. Otherwise, Trump will continue to exploit their frustrations, prejudices, and anxieties to win support for an agenda that benefits himself and his cronies, and causes serious harm to almost everyone else.

Koichi Hamada

NEW HAVEN – If US President Donald Trump is skilled at anything, it is demagoguery. 

By stoking voters’ fears and prejudices, he manages to win support for, or distract from, extreme policies that benefit himself, his family, and his (mostly ultra-rich) cronies, and cause serious harm to virtually everyone else. 

The key to his success is knowing which buttons to push.

Trump’s embrace of tariffs exemplifies this approach. 

The factor-price equalization theorem states that, over time, free trade tends to cause the prices of identical factors of production, such as labor, to be equalized across countries. 

Never mind the countless real-world variables that would prevent wages in China or Vietnam from matching US levels any time soon. 

Many American workers are frustrated with stagnant incomes, and fear being displaced by AI. 

So, when someone says that open trade is driving down their wages or causing their jobs to move elsewhere, they listen.

Enter “Tariff Man.” 

By “taxing” America’s trade partners, Trump claims that he will be able to stop them from “taking advantage” of the US, thereby protecting American workers. 

The problem, of course, is that this is not how tariffs work. 

The bill is paid not by foreign exporters, but by American importers, who then pass the added costs along to consumers or cut their own margins.

So, while the US government might secure some additional tax revenues, US businesses and households will suffer from higher prices, despite Trump’s campaign promise to lower them.

Last month, China introduced a package of retaliatory measures in response to Trump’s imposition of 10% tariffs on Chinese imports. 

Now that Trump has followed through on his threat to raise tariffs on China by another 10%, and to introduce a 25% tariff on imports from Canada and Mexico, more retaliatory tariffs will follow. 

As tariffs turn into a trade war, costs will skyrocket. 

Similarly, the European Union – which Trump claims was “formed to screw the United States” – has pledged to respond “firmly and immediately” to “unjustified” trade barriers, like the recently imposed 25% tariffs on steel and aluminum.

Trump apparently believes that, in the game of tariff “chicken,” it will be America’s trade partners that flinch. 

This means acquiescing to his demands, from reducing their trade surpluses with the US to stopping fentanyl flows across the border. 

And he may well wrest a few concessions from them. 

But history could not be clearer: nobody wins a trade war. 

Ninety-five years ago, the US Smoot-Hawley Tariff Act triggered a global trade war that contributed to the Great Depression.

Trump’s approach to immigration is another prime example of his destructive politics of fear. 

Here, the factor-price equalization concept is even more relevant: migration directly contributes to the equalization of wages across countries. 

Again, it would take an extreme level of openness – unlimited cross-border labor mobility – to achieve full equalization. 

But no matter: Trump has convinced much of the American electorate that immigrants pose an imminent and grave threat not only to their economic well-being, but also to their physical safety. 

As a result, many have welcomed his mass deportation effort, which so far has included arresting individuals with no criminal records, sending Asian migrants to Central America, and targeting migrant children who have entered the US without their parents.

The paradox is that the US is famously a “nation of immigrants.” 

Those whom Trump would most likely label “true” Americans are, without exception, descended from immigrants, whereas Native Americans are reportedly facing questioning and detention by immigration officers.

Immigrants have always been essential to America’s identity and its prosperity. 

In 2022, they generated about $1.6 trillion in economic activity, and contributed more than $579 billion in taxes. 

In 2023, their tax contributions totaled $651.9 billion. 

Even the undocumented immigrants Trump routinely demonizes make enormous contributions to the US economy, not least by performing low-wage jobs that locals are unwilling to do, such as in food processing and agriculture. 

According to one estimate, if just 1.3 million undocumented immigrants are deported, US GDP would fall by 1.2%, and employment by 1.1%, by 2028. 

Undocumented immigrants paid nearly $76 billion in taxes in 2022.

Rather than allow Americans to remain in thrall to Trump’s politics of fear, his opponents – starting with Democratic Party leaders – must fight back. 

They need not only sincere but well-calculated strategies. 

This means communicating the truth to voters, particularly the working-class voters who flocked toward Trump in the last election. 

It also means devising a new set of policies that responds to, rather than dismisses, their legitimate fears. 

Otherwise, Trump and his cohort will continue to use people’s frustrations, prejudices, and anxieties as cover to dismantle US democracy, install an autocratic regime, and destroy the world order that has underpinned relative peace and stability since World War II.

Koichi Hamada, Professor Emeritus at Yale University, was a special adviser to former Japanese Prime Minister Abe Shinzō.