After World War II, the United States offered foreign governments a form of economic insurance: it protected sea lanes, enforced international trade rules, and kept the dollar stable. That system was “a win-win for nearly everyone,” writes Adam Posen in the latest issue of Foreign Affairs. But now, U.S. President Donald Trump is dismantling it.
Trump has conditioned access to American markets, forced allies to buy U.S. goods, and imperiled investments by reducing the dollar’s liquidity. In response, foreign governments are changing their economic strategies, but “not in the ways that Trump hopes,” Posen argues. U.S. allies will endure more harm than China, “the country whose behavior most U.S. officials want to change.” Rather than “a potentially desirable realignment” emerging from Trump’s policies, “everyone will suffer—not least the United States.”
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