Mercantilism, Economic Nationalism, and US Trade Policy
Mercantilism and Economic Nationalism
Mercantilism is a historical and theoretical perspective that views international economic relations as a zero-sum game in which states compete for a finite amount of wealth and power. The state plays a central role in protecting national sovereignty and accumulating resources, especially through trade surpluses, protectionist policies, and colonial expansion. Key thinkers such as Thomas Mun and Jean-Baptiste Colbert promoted state intervention to maximize exports and limit imports.
Economic Nationalism and Neomercantilism
Economic nationalism is the modern continuation of this tradition. It emphasizes the primacy of the nation-state in economic decision-making and the use of government policies to protect domestic industries, preserve jobs, and ensure economic security. Neomercantilism, as used by scholars since the 1970s, refers to the adaptation of mercantilist ideas in a globalized world, through tools like tariffs, subsidies, import quotas, and strategic control of resources.
Trump’s Return to Economic Nationalism (2016–2020)
Donald Trump’s presidency is widely interpreted as a return to economic nationalism. His economic program emphasized:
- Tariffs on Chinese and European imports, especially steel, aluminum, and manufactured goods.
- Renegotiation or withdrawal from trade agreements, such as the Trans-Pacific Partnership (TPP) and NAFTA (replaced by USMCA).
- Use of “America First” rhetoric, prioritizing national sovereignty and domestic employment.
- Promotion of military investment and infrastructure development, aiming to boost national strength.
These policies align with mercantilist logic: the economy is a tool to enhance state power and independence in a competitive international environment. Trump viewed international trade as a threat to national strength when it generated trade deficits or harmed domestic producers.
Contradictions in Trump’s Approach
However, there are also contradictions. Trump was suspicious of government institutions, often leaving key administrative posts unfilled. Unlike traditional mercantilists, who saw the state as a positive and necessary actor, Trump distrusted the state bureaucracy. Furthermore, his policies were sometimes unilateral and unpredictable, which differs from the long-term strategic planning of classical mercantilist states.
Gilpin’s Distinction
Robert Gilpin distinguishes between benign and malevolent mercantilism. Trump showed elements of both:
- He sought to protect domestic industries (benign).
- He used aggressive rhetoric and trade threats (malevolent).
Theoretical Echoes and Critique
- Friedrich List argued that only once a country is strong can it engage in free trade. Trump echoed this logic by claiming that only powerful countries can benefit from open markets.
- Critics argue that Trump’s mercantilism was more rhetorical than structural: despite trade conflicts, the U.S. economy remained deeply integrated into global supply chains.
Comparing Trump and Biden: Neomercantilist Measures
In this essay, mercantilism and economic nationalism are defined as state-centered approaches that prioritize power and independence in international trade. Both Trump and Biden have moved away from American neoliberalism and have chosen to implement neo-mercantilist measures—that is, protectionist and mercantilist policies—to protect the national economy and its international role. They share key ideas such as “America First” and “Made in USA.”
Joe Biden’s Policies
Biden shares the “America First” slogan with Trump, evident in measures like:
- High tariffs on stainless steel imports to strengthen domestic production and achieve self-sufficiency. He seeks to reduce imports and increase exports (a mercantilist approach), though his measures are less aggressive (e.g., removing some Trump-era tariffs).
- Increased taxes and significantly expanded public spending, especially on infrastructure (roads and railways), believing government intervention enhances international competitiveness.
- Restoring international agreements that Trump had broken and proposing dialogues to ease the trade war with China, viewing good international relations as essential to the U.S. economic position.
Conclusion on Leadership Styles
Donald Trump should be seen as a neo-mercantilist who first applied protectionist policies to develop the nation, aiming to increase exports and reduce imports once more competitive. Joe Biden, while sharing the goal of promoting the “Made in USA” brand, differs significantly:
- Biden shows a more interventionist stance through increased taxes and public spending.
- Biden seeks to ease international tensions generated by Trump, rejoining agreements and reducing conflict with China.
In short, while both share the objective of promoting the “Made in USA” label (protectionism), Biden does so with a lower level of protectionism than Trump and a higher degree of state intervention.