By Artchil B. Fernandez
April 2, 2025 — a date which will live in global trade infamy — the neoliberal economic order was savagely obliterated by imperial America.
In a single stroke, the United States (US) upended the current international economic system.
US President Donald Trump imposed a sweeping tariff on all countries, including islands inhabited by penguins.
He placed a baseline tariff of 10 percent on imports from all countries, with some getting higher rates depending on the voodoo computations of the White House.
The Philippines got a 17 percent tariff, second lowest to Singapore, which got 10 percent among Southeast Asian nations.
Cambodia, on the other hand, had the highest rate in the region (49 percent), followed by Vietnam (46 percent).
Crying that other nations “looted, pillaged, raped, [and] plundered” the US, Trump declared a trade war with the rest of the world, calling it “Liberation Day.”
It’s America contra mundum.
From whom or from what is Trump liberating America?
The “villain” from whom Trump claimed he is redeeming America is the neoliberal economic order that presently dominates the world.
The neoliberal global system is anchored on neoliberal economics, whose advocates pushed for globalization of trade.
Neoliberal economics champions free trade, holding that the market is the centerpiece of social life.
Neoliberals believe the market, guided by the “invisible hand,” is self-regulating.
Economic decision-making should be left to the functioning market, not to the government.
Neoliberals are allergic to state intervention in the economic sphere and in all aspects of social life as well.
The government that governs least is the best.
The ultimate expression of the neoliberal doctrine at present is globalization.
Globalization, with its goal of opening national economies to international capital, clearly reflects the neoliberal goal of making the market the dominant force not only in the economic sphere but also in almost all aspects of human activities.
It would allow the freest competition of market forces at the global scale.
As such, globalization’s emphasis is on free trade of goods and services, free circulation of capital, and freedom of investment.
Removal of trade restrictions and barriers among nations is crucial.
Three policy instruments hastened the globalization of trade and created the international neoliberal order.
These are liberalization, privatization, and deregulation.
Privatization is the selling of government-owned and -controlled corporations (GOCCs) and assets to the private sector.
Deregulation removes government control and restriction on the market, including the operations of vital and strategic industries.
Liberalization is the removal of restrictions on the flow of capital and goods among the players in the global market.
The primary focus of liberalization is the elimination of restrictions on the movement of goods, while capital accounts liberalization dismantles restrictions on the movement of capital.
Liberalization of global trade is the paramount dream of neoliberalism.
Tariffs are considered trade barriers, and neoliberals are obsessed with their removal.
In a world without or with minimal tariffs, goods and services flow freely between borders.
Transnational and multinational corporations pushed for trade liberalization so they could move their goods freely around the world.
Taking advantage of cheap labor and raw materials in the Global South, many companies in the US and Global North moved their operations there.
They manufactured cheap products in the Global South and exported them back home, providing home consumers with cheap goods.
These companies raked in huge profits with this arrangement.
Tariffs are anathema in this economy.
The post-war neoliberal order was established by American capitalism to dominate the global economy.
US companies are the prime beneficiaries of globalization, and Americans have enjoyed cheap manufactured goods.
American prosperity is made possible by the neoliberal economy at the expense of the people in the Global South.
The US became rich and prosperous by condemning the Global South to poverty.
As the US transitions from an industrial to a service economy, the neoliberal economic order is critical to sustain its status.
The US today mostly generates its wealth from the service economy, allowing higher American purchases from the rest of the world — hence the trade deficit, which Trump considers “evil.”
The deficit actually indicates Americans have money to buy more from the rest of the world.
Why manufacture goods at home (which are expensive due to high labor costs) when they can buy them cheap from other countries?
Due to his ignorance of current international trade and 19th-century view of the world, Trump is ripping apart the very system that makes America wealthy.
His tariffs will deny Americans cheap goods and devastate the global supply chains of US companies.
It will gravely wreck the US economy as well as that of the world.
While the US has a trade deficit with the rest of the world in manufactured goods, it enjoys a huge surplus in the service economy.
The US, for example, had a trade surplus of $278 billion with China in 2023 in the service industry.
This, Trump failed to see.
The US economy is already in the post-industrial phase, having graduated from manufacturing, which the US was a powerhouse in during the early 20th century.
Trump wants to turn back the clock and return the US to a previous economic stage.
He desires the US to abandon its advantage in the service economy and go back to the late 19th century, when the US was starting to industrialize.
In that past era, high tariffs were a prime protector of burgeoning US industries.
Not in the 21st century, where the US is creating its wealth from the service economy.
Huge tariffs in 21st-century America are detrimental to Americans.
Trump’s America contra mundum is really America against itself.
It is killing the goose that lays the golden egg.
By destroying the neoliberal global economic system — an American creation — the US becomes the author of its own demise.
