Trade deficit or Trump’s narcissism?

As Trump’s reciprocal tariffs were on a pause, the global stock market bounced back at once.  However, after knowing that the tariffs on Canada and Mexico stayed and that of China egregiously went up to 145%, all bourses plunged to the bottom again as quickly as it rose the following day. If there is an obvious key takeaway in this, it’s uncertainty. Whether deliberately done by Trump or not, we don’t know. What is put forward though is that these tariffs are supposed to address the burgeoning trade deficit of the USA.

Looking intently, this trade deficit that Trump (and his minions) is telling the world is a trade deficit on goods. Knowing that the USA is a service economy (according to Wikipedia, US service sector contributes around 80% to its GDP) that should be understandable.

Indeed, this is not difficult to understand. Is it difficult to understand that we (the global citizens) do watch Hollywood films, Netflix, YouTube and other similar services? Cinema operators and subscribers pay. Aren’t we hooked up on Facebook, Instagram and other related services? Advertisers pay. Aren’t businesses using and paying for Microsoft windows, Oracle, Amazon Web Services and other related services? Aren’t we patronizing McDonalds, Starbucks, KFC, and other similar establishments?  Local operators are remitting franchise fees. All these payments to the US-based owners. Factor these services in and see how much the USA’s trade deficit shall be. Probably, it will be wiped out. The other US presidents must have realized this but not Trump. Why? Probably, he is just a narcissist, pure and simple.

So, as the global economic uncertainty lingers on, let’s drill down deeply on the word “narcissism.”  Actually, the word "narcissism" was coined by Alfred Binet in 1887 based on a Greek myth, Narcissus. In Greek myth, Narcissus was a handsome young man who casted off admirers and all would-be lovers, but then terribly fell in love with his own reflection in a pool. Its use, however, today is prevalently based on the Austrian neurologist, Sigmund Freud’s 1914 essay, On Narcissism.

In ordinary conversation, "narcissism" often means “inflated self-importance, egotism, vanity, conceit, or simple selfishness. In a society, it is more often used “to denote elitism or an indifference to the plight of others.” Notably, however, it is incomparably more evident among politicians, then and now. Certainly, Trump is not just one of them, he is the epitome of a narcissist.

Taking pride alone on, allegedly, having 70 countries scrambling for appointments right away after he imposed the tariffs defines his persona at the very least. That he wants every global citizen genuflecting towards him puts him essentially in the worst or extreme side of narcissism.  And while he is enjoying it, the consequences could be catastrophic.

Well, history tells us that this is the first time that the USA went against Canada and Mexico despite having a trade agreement which he himself signed. Whatever happens next, we don’t know. However, on China, it is quite different. To recall, on July 6, 2018, Trump imposed a 25% tariff on around US$34 billion of imports, including cars, hard disks and aircraft parts.

Unperturbed, China retaliated right away by imposing a 25% tariff on 545 goods originating from the US worth US$34 billion, including agricultural products, automobiles and aquatic products. Several impositions and retaliations followed during the year. Then on December 1, 2018, both Xi Jinping and Donald Trump agreed to a ceasefire at the G20 summit in Argentina. Suspensions on imposed tariffs by both camps ensued.

The ceasefire wasn’t meant to even last for half a year though as negotiations broke down on May 10, 2019. Thus, reimpositions and retaliations followed. Then, on June 19, 2019, Xi Jinping and Trump agreed to a trade war truce at the G20 summit in Japan, thus, delaying the imposition of new US tariffs. Lowering and suspension of tariffs ensued.

The question now is, will these skirmishes have the same endgame? That Trump and Xi Jinping can share the same table again and resolve this potentially catastrophic standoff. That remains to be seen.

Precariously, however, with Pres. Trump pugilistic tendencies, he might not care about these consequences at all and just go ahead with his economic war against China. If he continues, it might lead to a full-blown recession, a “Trumpcession.”