Mercantilism and Modern Economic Nationalism
Modern economic nationalism is strongly influenced by the main ideas of mercantilism. Mercantilism sees the international economy as a competitive space where states seek power, security, and independence. Economic activity is not mainly about efficiency or cooperation, but about strengthening the nation-state and protecting national interests.
Zero-Sum View of International Trade
A central mercantilist idea that feeds modern economic nationalism is the belief that international trade is a zero-sum game. From this perspective, if one country gains, another must lose. This view leads governments to see trade deficits as signs of weakness and to justify protectionist policies such as tariffs and import restrictions. As a result, economic policy becomes a tool to defend national industries rather than to promote global cooperation.
Strong State Role and Industrial Policy
Another key principle is the strong role of the state in the economy. Mercantilism assumes that markets alone cannot guarantee national prosperity or security. Therefore, governments must intervene to protect strategic sectors, support domestic firms, and reduce dependence on foreign countries. In modern economic nationalism, this logic is visible in industrial policy, subsidies, and efforts to control supply chains in areas such as energy, technology, and defense.
Case Study: United States Under Donald Trump
A clear recent example is the United States under Donald Trump. Trump openly rejected liberal trade ideas and adopted a zero-sum view of trade, arguing that U.S. trade deficits meant other countries were taking advantage of the United States. His administration imposed high tariffs on imports from China and other partners in order to protect American jobs and restore economic sovereignty.
Contradictions and Strategic Weaknesses
However, Trump’s economic nationalism was highly contradictory and largely harmful. While he claimed to defend national interests, his policies were often short-term, unilateral, and poorly coordinated. Traditional mercantilism emphasizes long-term strategy and a strong, capable state, but Trump weakened alliances, attacked global institutions like the WTO, and offered little coherent industrial planning. His criticism of globalization also conflicted with his own global business interests, suggesting that his policies were driven more by domestic politics than by genuine economic strategy.
Economic Impacts and Global Repercussions
The impacts of these policies were mostly negative. Tariffs raised prices for consumers, disrupted global supply chains, and triggered retaliation from countries such as China and the European Union. Instead of strengthening the U.S. economy, Trump’s approach increased global uncertainty and trade tensions.
- Higher consumer prices due to import tariffs.
- Supply chain disruptions and increased costs for businesses.
- Retaliatory measures from trading partners, escalating trade conflicts.
- Less coordinated industrial strategy and weakened alliances.
State-Led Strategies: China and Others
Other countries, such as China, have also adopted economic nationalist policies by using state-led industrial strategies to protect key sectors and reduce external dependence. This shows that mercantilist ideas remain powerful in today’s global economy.
Conclusion: Mercantilist Ideas Today
In conclusion, mercantilist principles continue to fuel modern economic nationalism by promoting a zero-sum view of trade, strong state intervention, and the link between economic policy and national power. While these ideas may appeal in times of crisis, recent examples—especially under Donald Trump—demonstrate that aggressive economic nationalism often creates more problems than solutions.