President Trump is a strong economic nationalist. He believes that this country should source everything domestically - its products and its labor - and any labor or resources that are coming from other countries should either be stopped by a wall or heavily taxed.
Economists and I will spend a lot of time over the next four years trying to explain to our economically-ignorant administration why global trade and the global division of labor increase domestic incomes and production rather than decreasing them. But I do not want to lose sight of another important benefit of open trade in the global economy - peace.
We often miss the fact because our news is dominated by stories of violence and terror, but we live in times of unprecedented peace around the world. It is no coincidence that this is occurring at the same time that global trade is at a historic peak. People and governments can obtain just about anything they want, inexpensively, through voluntary trade. This has seldom been the case through history -- and when people could not get what they wanted through free trade, they tried to take it by force.
Think about the corollary of Trump's economic nationalism, particularly if everyone followed this same approach. If one skews all the rules and taxes and prohibitions so everything must be sourced domestically, then if a country does not have some particular resource or skill domestically, it is out of luck. No domestic rare earth metals? Sorry.
But governments and powerful people seldom calmly accept that something they critically need is not available. They will be tempted to go and take it. The worst, most violent empire building of the last 100-150 years has occurred when countries have pursued economic nationalism. Think of the colonialism of the late 19th century. Today we happily trade with South Africa and other countries for valuable resources, but in that time of economic nationalism, if a country wanted access to these resources, it felt it had to control the land and the people. Hitler in the 1930's wanted to make Germany self-sufficient in agricultural goods and certain other resources, and the only way to do that was to go and grab other people's land and resources.
The best example of all of this phenomenon is, I think, Japan in the 1930's. Japan felt that it was resource poor and under Trump's theory of economic nationalism, it felt it had to control oil and other resources it did not have domestically. So it plotted to go take it. When the US instituted a trade embargo in these very goods to punish Japan's aggressiveness in China, it just accelerated Japan's thinking in this area, convincing it for good it had to control these resources, and it was soon invading the oil-rich islands of what is now Indonesia. This example is all the more telling because Japan actually found true prosperity after the war when it traded peacefully for these resources. Unfortunately, it adopted economic nationalism, via MITI, of another form and helped manage themselves into a 20-year recession, but that is another trade-related story for another day.
Postscript: I have more to say on this when I get my thoughts better organized. Right now I am hurrying to a plane, for Regina, Canada, where I am speaking on global warming tomorrow. There is a related issue of what happens when strong protectionism on our part pushes China over into the crash they have been putting off for years -- suddenly a crash largely of their making becomes the fault of the US, with implications for a formation of a new cold war, but that again is another topic for another day.