Just over a month into one of the most economically tumultuous American administrations the world has seen, are Trump’s policies proving to be effective?
The US President has recently threatened 200% tariffs on all EU alcohol exports and previously promised 25% tariffs on all EU goods, while also going back and forth on various tariffs for America's closest neighbours.
These tactics may be obnoxious, but is there a method to the madness?
Economist David McWilliams told The Anton Savage Show that he’s “not too sure”.
“Five or six days ago, I was listening to the commerce secretary, a guy called Howard Lutnick, who is Trump’s man about commerce, industry, manufacturing, et cetera,” he said.
“He was lamenting the fact that America had lost sneakers, t-shirts, towels and televisions, and that in the great Trumpian world, America would once again make runners, televisions, towels and t-shirts.
“Now, as an economist, the holy grail of economics is that they call ‘moving up the value chain’ - so you really want to be making semiconductors, not sneakers, right?”
Production of electronic components at high-tech factory. Image: Nikita Buida / Alamy. 27 November 2014Mr McWilliams said that, in his opinion, this suggests that Trump’s economic worldview is based on a nostalgia “for a bygone age”.
“Look, what we have is chaos,” he said.
“[The Trump administration] has torn up the rule book of the last 70 years, certainly 50 years, a period when America actually has done extremely well.
“America has remained the preeminent power, it has remained the most muscular economy, it is the most powerful country, et cetera, et cetera.
“So, in a way, what the Americans are doing – or what this administration is doing – is it is tearing up agreements it signed itself in order to position itself as the number one country.”
'Mass extinction event'
According to Mr McWilliams, “there’s a mass extinction event on the horizon which will make 2008 look like a walk in the park”.
“Since the pandemic, a phenomenal amount of American capital has gone into what were called ‘the unicorns’,” he said.
“They said these huge tech companies in Silicon Valley were going to be worth more than a billion dollars and all they needed to have was an investor that was going to come out and buy them all up when times were good.
“I’ve just come from speaking at a conference in England, and the people in the audience were what they call M&A – mergers and acquisitions, bankers, professionals.
“They’ve said their business has fallen off a cliff, why? Because business needs, more than anything else, stability.”
Mr McWilliams said he cannot see any short-term economic logic in these tactics.
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Main image: U.S President Donald Trump. Credit: Daniel Torok/White House Photo/Alamy Live News. 13th Mar, 2025.
