If America flops, other role models are available

Greater economic minds than mine (it’s not a high bar, to be honest) have generated a tsunami of words in the past week on the subject of what Donald Trump called “Liberation Day,” so it need not detain us for long today.

Will the US president’s tariffs, determined with that absurd faux-Greek equation, achieve their stated aim? Does anyone even know what the stated aim is? Trump and his coterie of trade advisers assert that the tariffs will generate “trillions of dollars in revenue” from taxes on imports and also create employment by forcing manufacturers, who have outsourced thousands of jobs overseas, to avoid those import taxes by making their products in America instead. Self-evidently, however, tariffs cannot do both: that would be an eating and having cake situation, which is proverbially impossible.

For the few tariff supporters, perhaps the only good news is that Trump’s new taxes have been comprehensively vilified by almost every respectable economist. That old gag about economists having predicted five of the past two recessions is funny because it contains a grain of truth. And there are hedge fund managers who have made billions by carefully reading the confident forecasts of the International Monetary Fund and the World Bank, then betting on the opposite.

A final word of sympathy for the unfortunate occupants of the Heard and McDonald Islands in Antarctica, from where exports to the US will be subject to a tariff of 10 percent: since all those occupants are penguins, plus the occasional seal, it is not wholly clear what the exports are.

What interests me more than Trump’s war on traditional economics, and on global institutions in general, is what it says about much conventional wisdom that many people have taken for granted for the best part of a century. Trips abroad in the past month by two distinguished journalists have brought that issue into sharp relief.

China — despite being the prime target of Trump’s tariffs — is also moving forward at a blistering pace

Ross Anderson

First, the former BBC news presenter Emily Maitlis visited Saudi Arabia for the first time. She had her eyes opened, not an unusual experience for new arrivals in the Kingdom. Maitlis came with a full wardrobe of clothing that reached from hair to toes. On her first night, in an achingly hip Peruvian Japanese fusion restaurant in Jeddah, she found herself almost the only woman in the room with her head covered. Her host urged her to look around: “These women are single. They’re on dating apps. They’re out with friends or alone.”

He explained how the new Saudi Arabia works. First, domestic politics is off the table. Not up for discussion. It is what it is, not going to change, get over it, move on. Everything else, however, is very much on the agenda, and moving at breakneck speed: infrastructure, art, culture, entertainment, sport, female empowerment, youth development and career opportunities, and rapid economic diversification away from dependence on petrochemical revenues.

Maitlis’ experience prompted her to ask a key question. The conventional wisdom is that the main threat or challenge to liberal democracy comes from “illiberal” democracy of the sort practiced by leaders such Viktor Orban in Hungary and Recep Tayyip Erdogan in Turkiye and aspired to by Alice Weidel in Germany and Marine Le Pen (judges permitting) in France. But Maitlis wondered whether the other side of the liberal democracy coin might in fact be liberal autocracy and whether that was what Saudi Arabia was so effectively deploying.

Another country where liberal democracy is very much off the agenda is China. The Chinese people are free to choose their president from a wide spectrum of options that range from Xi Jinping to ... er, Xi Jinping. However, as the distinguished New York Times columnist Thomas Friedman found on a visit there last month, China — despite being the prime target of Trump’s tariffs — is also moving forward at a blistering pace.

A brief cameo illustrated how far the US has fallen behind. Friedman tried to pay for a purchase in a Beijing shop by handing over his credit card. The shopkeeper looked at him as if he had just arrived from the last century, before asking which payment app he had on his phone — Alipay or WeChat Pay, which between them command 90 percent of the Chinese payment market.

For a country that hosts some of the world’s finest tech brains, the US has always been painfully slow to implement their ideas

Ross Anderson

For a country that hosts some of the world’s finest tech brains in Silicon Valley, the US has always been painfully slow to implement their ideas. I recall visiting New York some years ago, when chip-and-pin cards and readers were already commonplace in the UK and Europe. To my astonishment, American retailers were still using those old clickety-clack, double swipe card imprint machines: it was like watching someone trying to light a barbecue by rubbing two sticks together.

But I digress. Friedman was astonished by what he found in China and how little they care about what Trump says or does: they are plowing their own furrow. A US businessman in Beijing told him: “There was a time when people came to America to see the future. Now they come here.”

The US tried to throttle China’s tech development by restricting its access to sophisticated semiconductors, but the Chinese simply innovated their way around it — despite autocracies having long been accused of an inability to innovate, preferring instead to copy or steal. Friedman visited the massive Huawei campus in Shanghai, where 35,000 scientists and engineers are keeping China ahead of the game. His conclusion: “What makes China’s manufacturing juggernaut so powerful today is not that it just makes things cheaper; it makes them cheaper, faster, better, smarter and increasingly infused with artificial intelligence.”

Winston Churchill famously said that democracy was the worst form of government, apart from all the others. For the past century, the conventional wisdom has been that only Western-style liberal democracy, with national self-determination and freedom of expression, can foster the kind of innovation and entrepreneurship that creates economic growth and prosperity. Neocons in the US were so convinced of this that they tried to export it worldwide — especially to the Middle East, where apparently we were all so backward that we did not know what was good for us. The examples of Saudi Arabia and China suggest otherwise.

It may be that Trump’s war on conventional wisdom is a blip. After all, no country has benefited more from the past century’s system of relatively free trade, global institutions and a rules-based international order than the one that created it — the US. Where does Trump think his country’s power and prosperity came from?

It would surely be perverse for America to destroy the goose that laid its golden egg. But if it does, other role models are available.

• Ross Anderson is associate editor of Arab News.