“Trump is a one-man wrecking crew trying to destroy globalisation”

Renowned American economist and Princeton University professor Gene M. Grossman accuses President Donald Trump of destroying the benefits of globalisation with his decision to impose tariffs on many countries across the world—which he has “paused” for 90 days starting April 9, except for China on which he has announced an immediate increase in tariffs to 125%. Despite the “pause”—aimed at negotiating with countries—Trump’s decision to set a baseline tariff of 10% on all imports remains in place.

Grossman, the Jacob Viner Professor of International Economics in the Department of Economics and the Princeton School of Public and International Affairs at Princeton University, forecasts that the world may head towards a global recession if the US president reverses the “pause” after 90 days. Trump’s justification for the decision was to address trade imbalances with the rest of the world.

Grossman, a doctoral student of Indian-origin economist Jagdish N Bhagwati, has written extensively on international trade as well as about the link between trade and growth. His notable books include Innovation and Growth in the Global Economy; Robots and AI: A New Economic Era; and Special Interest Politics, among others. An alumnus of Yale University and the Massachusetts Institute of Technology, Grossman has also written extensively on the connection between economic growth and the environment.

“I think most Americans except the diehard MAGA (Make America Great Again) supporters still see the gains from trade,” he tells Open in an interview. Edited excerpts:

 With US President Donald Trump announcing reciprocal tariffs on several countries, including India—though paused for 90 days except in the case of China—what is happening to the idea of globalisation?   

President Trump is a one-man wrecking crew trying to destroy globalisation and the benefits it has brought. The idea may survive him (or not!), but it will take a long time to undo the harm.

The US has imposed tariffs not only on countries with which it runs a trade deficit (like Singapore), but also on major economic powers such as China (which stays). What do you expect will result from these tariff wars?

A reduction in world standards of living. Heightened geopolitical tensions. Quite possibly a global recession, if the president reverses the “pause” after 90 days (or, quite possibly, before then).

How do you think such measures would impact the power of the World Trade Organization (WTO) as an institution? 

The WTO has been all but destroyed. Too bad, it was an institution—flaws and all—that provided large benefits to the world economy. Can we rebuild it?  Who knows, but it won’t be easy and it won’t happen during this administration.

Why do you think the US fails to acknowledge the gains it makes in trade in services, even if not in goods?

Your guess is as good as mine. I think you are wrong in saying “on the part of the US” … I would say “on the part of the US administration.” I think most Americans except the diehard MAGA supporters still see the gains from trade. This administration wrongly sees trade as a zero-sum game, with clear winners and losers based on trade surpluses in goods trade. That flies in the face of everything we know about trade economics.

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