From Tariffs to Kickbacks, Trump Has Embraced the Failed Policies of Emerging Markets

Many of US President Donald Trump’s embrace of state capitalism were made. Although Trump made clear his desire to simulate President Xi Jinping’s grip on the Chinese economy and citizens, Trump’s economy is similar to the industrial strategy planned centrally from a third -class emerging market.

Whether it adopts definitions, or demands shares in private companies, adapts access to markets on foreign investment and operations, or attacking independent institutions such as the Federal Reserve, Trump is following a good book. It is not good. These same measures were published throughout Latin America, Africa and Asia with significantly consistent results: low investment, lower wealth, increased volatility, and high prices.

Many of US President Donald Trump’s embrace of state capitalism were made. Although Trump made clear his desire to simulate President Xi Jinping’s grip on the Chinese economy and citizens, Trump’s economy is similar to the industrial strategy planned centrally from a third -class emerging market.

Whether it adopts definitions, or demands shares in private companies, adapts access to markets on foreign investment and operations, or attacking independent institutions such as the Federal Reserve, Trump is following a good book. It is not good. These same measures were published throughout Latin America, Africa and Asia with significantly consistent results: low investment, lower wealth, increased volatility, and high prices.

Consider the elements of the emerging market program in Trump. The most prominent of which are definitions. Trump called the famous definitions “The most beautiful word in the dictionary”. For decades, they supported their use to close the commercial deficit of the goods, and completely ignore the service trade, in which the United States is dominant.

But the customs tariff is the most appropriate to protect local industries in emerging markets that cannot compete in the world. Two of the most abundant tariff practitioners, India and Brazil, were also one of the largest goals of the United States for reprisals. Agricultural definitions in India, which are more than 36 percent, are among the highest in the world, while Brazil is scheduled to increase the customs tariff on electric and hybrid vehicles to 35 percent in 2026 in an attempt to stimulate local production.

Trump’s famous “Liberation Day” speech in April brought these policies to the United States at almost levels that have been seen in almost a century. Since then, soybeans have decreased up to 20 percent and milk prices have increased by 7 percent, while restaurants now warn that menu prices are likely to increase this fall. The tariffs of 25 percent of Trump are expected to exceed $ 5,000 for imported parts in all fields and more than $ 8,000 for expired foreign cars, although the prices of American car shares have increased in double numbers since the announcement of the customs tariff.

Then there are descending demands. In June, Trump requested a “golden share” in the United States steel as a condition for approving its acquisition by Nippon Steel, which was also forced to adhere to billions of dollars in additional capital investments in the company. Maintaining the right to government veto of some governance decisions is a heavy matter-but it was unprecedented-before the foreign investment committee in the United States, the organizational body that agreed to the deal. But unprecedented the United States to demand the government to include itself in the CAP table for an American company as part of such a review.

However, such moves are common for two of the two preferred emerging market leaders in Trump: the eleventh of the eleventh and Russian President Vladimir Putin. Since 2021, China has acquired “special management stocks” in technology giants, Apaba and Terent, while Russia has enjoyed the golden stocks in its semi -oil and gas companies for decades.

While Trump did not stop calling for royal rights in the United States, through this line in August when he demanded and received a 10 percent stake in Intel as a condition to maintain the financing of the Chips and Science law. After receiving a little retreat from Intel, these demands were quickly extended to other semiconductor manufacturing companies as well. The government has taken much greater positions in private companies before, including GM and Citigroup during the 2008 financial crisis. But these were companies on the brink of collapse that threatened to create major parts of the economy with them.

The question now is whether this wide intervention is in a stable sector, but it is weak in performance will be seen as a sign of government confidence that the crowds are in additional capital and enable the transformation, or if it is seen as a crimson that comes out. Trump may be hoping to simulate the success of sovereign wealth funds in the Gulf countries such as the Kingdom of Saudi Arabia and the United Arab Emirates, which have benefited from the state’s support for national heroes to earn tens of dollars in annual profits and the average dual -number returns over the past five years in a row. However, if these government positions are taken, these government positions can lead to nationalization, which began with economic misery in places like Argentina and Venezuela.

Trump also adopts the preferred approach to emerging foreign investment markets. Among the most worthy items in Trump’s deals in July with the European Union, Japan and South Korea, the introduction was apparently overnight, from mandatory foreign investment obligations as corner stone for American commercial policy. It is worth noting that the amount of $ 1.5 trillion in new foreign investments is allocated according to the special president’s estimate, and they follow nearly 3 trillion dollars from foreign investment pledges from Saudi Arabia, the United Arab Emirates and Qatar earlier this year to secure access to some American technologies.

The United States did not usually submit such demands because it did not have to do so: the country was the world’s favorite capital of capital and talent for decades, and rewards were made in the form of liquid markets and low interest rates.

However, adapting access to the foreign investment market is the usual practice of emerging markets that cannot attract capital and keep it on its own advantages. Nigeria only allowed the privatization of electricity distribution assets after securing billions of dollars in foreign funding promotions, while Indonesia has achieved more than 30 billion dollars in foreign investment in Nickel processing facilities since the Nickel crude exports were linked to capital flows in 2020.

Some of the most emerging market excesses in private companies included licenses to export air conditioning to government treasures. Former Argentine President Christina Fernandez de Kirchner caused national riots when she tried to increase fame Retencions (Export duties) on soybeans in 2008. The Nigerian government continues to impose up to 10 percent of property rights on oil production.

Although taxes on exports were banned clearly by the constitution, in July, Trump granted NVIDIA and AMD approval to export advanced chips to China in a violation of national security controls – in an exchange to give the government a 15 % reduction. It is unclear whether there is any change in the results of the national security on which the initial decision of the Ministry of Trade in April rejects export licenses for these chips, and it is very difficult to make these considerations of national security can somehow reduce criticism.

Instead, it appears that Trump’s decision is primarily driven by his personal relationship with the CEO of Nvidia Jensen Huang and mainly creates a working framework for playing national security issues. This transaction is unlikely to succeed well with NVIDIA, AMD or the US government sponsor. The framework places the export and other security controls on the table after years of successive American administrations that refuse to negotiate national security issues; Meanwhile, Beijing has already led to inhibiting Chinese companies from buying this, which it considers the lowest.

Finally, Trump’s latest trick in Trump is an unimaginable attack on an independent federal reserve. Trump presses the central bank for several months to reduce interest rates for the local economy juice before the renewal elections next year. In the face of the Federal Reserve’s continuous commitment to the policy of fixed interest rates-in part of it, to Trump’s sabotage policies-the president resorted to imposing suspended charges of the renovations of the offered buildings and mortgage to reshape the Federal Reserve with his appointed. It played almost identical drama in Türkiye in late 2010, causing more than 80 percent of economic crisis.

All this happens as Trump continues to practice from the two parties represented in the explosion of the federal deficit, which is now more than $ 37 trillion. No wonder that in May the United States rating was reduced to the same credit rating as Finland and Austria.

Trump’s embrace of state capitalism does not make America great. Instead, the exceptional undermines us by showing the world that the United States’s faith in the markets has deteriorated. It also abandons the long -term defense of international market standards and organizational efforts aimed at protecting openness, encouraging competition, and creating a level stadium.

This moves risk undermining one of the main competitive advantages and continuing the United States as a better destination for global capital and talent. This is not just a reputation issue. American companies and families have corrupted decades as markets have priced friction in business in the United States mainly in zero. If this begins to change, this will mean high prices, reduce goods quality, and reduce living levels.

In other words, if the United States insists on acting like an emerging market, commercial partners may start treating it like one.