Clash between Globalization and Nationalism – Trump’s Tariffs Cause Chaos around the World

While during his first term Trump still showed a ‘degree of diplomacy’ when dealing with national and international events (for example, his meetings with North Korean leader Kim Jong Un) in an effort to safeguard peace and harmony (both at home and abroad), that ‘degree of diplomacy’ has now been fully thrown out of the window in his second term, and possibly so for four reasons:

• Possibly, Trump learned from his first term that diplomacy does not work in his quest to stop certain profound changes that the US economy and society have been undergoing in recent decades. Instead, it requires a more radical break, hence more radical policymaking, to recreate an America that is in line with Trump’s vision;
  
  
• Trump has nothing left to lose in his second presidential term, simply because re-election is not an option. This might remove some boundaries due to a diminished fear of consequences and an increased willingness to take risks;
  
  
• Trump only has a maximum of four years to achieve his goals, hence he needs to act swiftly and sternly (there is no room for a ‘soft approach’ anymore in his mind if he wants to make lasting changes in US society and economy); and
  
  
• In January 2025 Trump came into power with a ‘trifecta’ of governmental control after his Republican party won the House of Representatives, Senate and presidency in the 2024 US election. While control of both chambers of Congress isn’t uncommon for US presidents, Trump now has an unusual edge as six of the nine members of the US Supreme Court are appointees of Republican presidents (after World War II only two other US presidents assumed office with overall control of both houses as well as the supreme court).

Looking at the stock and financial markets in recent weeks, the world is feeling the heavy consequences of this situation, with uncertainty taking levels the world has rarely seen before. This is reflected in the deep losses and steep gains taking turns on all big stock markets. What is exactly happening here?

Globalism versus Nationalism

Considering the majority of our readership is Indonesian, it might be important to discuss the battle that is ongoing in most (if not all) countries in the Western world. It is this battle that gives important and necessary context to understand the volatile situation in the world today. This battle is one between globalism and nationalism.

In a political sense, the process of globalization signifies a rising interconnectedness and interdependence of countries across the globe through nurturing of worldwide political systems and institutions. Meanwhile, in an economic sense, globalization is the growing interconnectedness and interdependence of national economies across the world through the intensified cross-border movement of goods, services, capital, technology and information.

Both in an economic and a political sense, globalization creates strong supranational institutions or organizations that (can) take decisions that heavily affect the internal affairs of countries. This then leads to the development of international norms and laws that become applied in the separate nation states (a nation state is a sovereign state whose citizens or subjects are relatively homogeneous in factors such as language, culture, traditions or common descent/history), and therefore it constitutes a process of harmonization in regulations and standards.

Globalization is a highly complex process that has both positive and negative effects. Positive effects include increased trade and investment, improved efficiency, access to cheaper goods/services, access to new markets, and innovation. Negative matters include increased competition, job displacement, financial/economic instability (as the world becomes increasingly interdependent, any turmoil becomes contagious), the erosion of national sovereignty, and the loss of social fabric in these nation states (as the relatively homogeneous societies in these states become heavily affected by newly incoming norms, cultures, ideas, people, etc.).

Indeed, economic globalization may be a bigger challenge for developed economies than for their emerging counterparts, for example because manufacturing (and its related jobs) tends to move to emerging economies where labour is cheaper. Hence, developed economies may feel deindustrialization, causing import bills to enlarge (triggering trade deficits) as manufactured goods have to be imported. Meanwhile, developed nations likely see an increase in immigration, something that can trigger social tensions in society (particularly due to the loss in national identity/culture), and which is something that puts pressure on social welfare systems.

Another key problem with globalization is that democracies become eroded. Crucial for any democracy is that the people can vote on those that are in power. After all, the people are the ones who feel the impact of all economic and political decisions taken by those in power. So, in case the people want a change in society because they generally dislike the policies they are confronted with, then a democracy gives them the opportunity to change the composition of those in power through elections. Or, in case the people enjoy existing policies, then they can keep voting on those parties that are in power. However, this essential trait of democracy is lost when globalism goes ‘too far’.

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This is part of the article. The full article (34 pages) can be ordered by contacting us through email and/or WhatsApp:

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What is discussed in this article?

- The clash between globalism and nationalism in the West.
- The changing role of mainstream media and rise of social media.
- Trump's US import tariffs announcement in early April 2025.
- What are import tariffs, actually? Why do countries impose these?
- Why does Trump want to impose US import tariffs?
- The US-Indonesia trade balance. Who holds the upper hand?
- What are the top export goods shipped from Indonesia to the US?
- How does the Indonesian government respond to Trump's tariff threat?
- Which industries in Indonesia are affected if US import tariffs are high?

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