Matt Goodwin: RIP globalisation - What’s driving Trump’s Tariffs and the global economic reset?

6 April 2025, original: https://www.mattgoodwin.org/p/rip-globalisation

What’s driving Donald Trump’s tariffs? What’s the underlying political logic? Is what we’re seeing the policy of one president or does it instead reflect a much broader and longer term critique of the established economic order that’s been steadily building over the last thirty years?

I wanted to send a short note on these questions because much of what JD Vance and Donald Trump have been saying in recent days touches on arguments I made about globalisation in an earlier book.

And many of the same points, I suspect, will also be acknowledged by UK Prime Minister Keir Starmer in a major speech due to take place tomorrow, which we are hearing will be on the theme of globalisation and the new economic order that is now emerging around us.

This is one of our weekly, regular exclusive posts for our paid subscribers. As always, leave comments and let me know your thoughts. And I hope you’re heaving a good weekend —Matt

What we are witnessing, in short, is a complete reset of the global economy. It is a reset that’s rooted in a strong and growing criticism of the economic model that dominated the globe since the end of the Cold War —what I called in my earlier book Values, Voice and Virtue the model of ‘hyper-globalisation’.

This model was based on a strong belief in the primacy of free trade, deregulation, the liberalisation of world finance, and the removal of trade barriers —much of which allowed China to, often unfairly, assert its dominance over the global economy.

Hyper-globalisation was both economic, in the sense of prioritising global markets over national communities, and cultural, in the sense of promoting mass uncontrolled immigration to supply those markets and corporations with masses of cheap migrant workers while blurring the boundaries between once distinct nation-states.

Now, at the time hyper-globalisation was ushered in, during the 1980s and 1990s, many of its leading advocates argued it would ‘lift all boats’ —that it would be good for everybody. This culminated in the likes of Tony Blair, in 2005, proclaiming that if you did not support globalisation then you were basically a closed-minded idiot.

But, actually, as we now know —and as the likes of Vice President JD Vance really know given their history of growing up in places like Kentucky—there were very good reasons to be sceptical about how hyper-globalisation was changing our world.

As rogue economists would show, throughout the 2000s and the early 2010s, hyper-globalisation, which encouraged and incentivised global corporations to relocate their businesses, jobs, and products to countries like China while also becoming addicted to masses of cheap migrant labour here in the West—had profoundly negative effects for one specific group —the working-class in Western economies.

It was workers in the likes of the Rust Belt in America, the Red Wall in England, and industrial regions across Europe that were not only disproportionately impacted by the rampant offshoring of jobs and often entire factories to China —as JD Vance pointed out this week, between the 1990s and today some 90,000 factories closed in America—but who also lost out in many other ways, too.

Working-class communities were hollowed out and completely gutted while those that managed to survive were then still flooded with cheap migrant labour from overseas. Marriage rates and even fertility rates also collapsed in these areas. And many once proud working-class men were pushed into alcoholism and drug abuse, fuelling the rise of so-called ‘deaths of despair’ in many former industrial heartlands.

Hyper-globalisation worked well for highly mobile, highly educated, urban elites who feel just at home in London as they do in New York, Berlin, Paris, and Los Angeles. And it worked well for China, too, which disproportionately benefitted from this regime while rigging large parts of the global economy to further serve its own economic interests at the expense of the West. But this model came with enormous ‘distributional costs’ for workers in the West who were never compensated.

As JD Vance said this week on Fox News, while explaining the underlying thinking behind the tariffs: “A lot of people have gotten rich from American companies moving overseas but American workers have not gotten rich and frankly American companies have not gotten wealthy from the increasing growth of foreign competitors manufacturing overseas”. Indeed. Furthermore, as Vance also pointed out, the decision to switch to a model of mass uncontrolled immigration and cheap labour undermined and weakened Western economies in other ways, too:

"Cheap labor is fundamentally a crutch, and it's a crutch that inhibits innovation. I might even say that it's a drug that too many American firms got addicted to. Now, if you can make a product more cheaply, it's far too easy to do that rather than to innovate. And whether we were offshoring factories to cheap labor economies or importing cheap labor through our immigration system, cheap labor became the drug of Western economies. And I'd say that if you look in nearly every country, from Canada to the U.K. that imported large amounts of cheap labor, you've seen productivity stagnate. And I don't think that's that's not a total happenstance. I think that the connection is very direct."

It’s also worth pointing out that while the elite class now talks endlessly about the idea of paying reparations to minority groups whose distant ancestors might have been impacted by slavery, they say nothing at all about compensating the millions of working-class people in the West who, in living memory, were completely screwed over by hyper-globalisation and the decision, taken by their own representatives, to send their jobs, wages, factories, and prospects overseas, to the likes of China.

Here in Britain, for example, the same mindset was later symbolised by Boris Johnson even removing the requirement for firms that are based in Britain to advertise jobs in Britain first while simultaneously flooding the country with masses of low-skill, low-wage migrants from outside Europe. It was globalism on steroids —a total obsession with putting global interests ahead of national interests, global corporations ahead of national citizens, the elite minority ahead of the forgotten majority.

And when many Western workers then dared, in 2016, to start turning to the one man who spoke out about the glaring problems with this model —Donald Trump—or when their counterparts in Europe started to flock to movements they thought might help rebalance this broken economy —such as Brexit and national populist parties—they were dismissed and derided as closed-minded bigots, gammons, and deplorables, and often by the very same people —New Labour, the Democrats, the expert class—who had shafted them and hollowed out their communities to begin with.

As academic Michael Lind points out this week, while the readers of dying legacy media are now being told that tariffs are a destructive policy being pushed by people who fail to understand basic economics, which proclaims that free trade benefits everybody on all sides at all times, the reality is that across the world developed states have already been putting tariffs onto imports and reviving industrial policy precisely because “they do not want their economies deindustrialized by a flood of low-priced, state-subsidized Chinese imports”. The return of tariffs, Lind points out, is basically an overdue course correction in the global economy in response to the rise of China and its exploitation of the world economy, which has at least partly been driven by U.S. companies offshoring manufacturing and forgetting about any sense of obligation and loyalty they might once have felt toward their own people and nations.

So, through tariffs, what Trump and Vance are trying to do —and we will have to wait and see if their plan works—is undertake a ‘great rebalancing’ of the global economy, essentially trying to reduce if not remove America’s trade deficit and reshape the economy much more strongly around manufacturing and industry by giving firms real incentives to relocate their companies inside rather than outside America (so-called ‘reshoring’). Meanwhile, Trump and Vance, between 2024 and … ? plan to use the money raised from tariffs to fund sweeping tax cuts and pay down America’s debt, which is also spiralling completely out of control. So, what we are seeing play out is not so much a single policy but, rather, a much deeper structural correction.

As Wolfgang Munchau points out this week, what we are witnessing, in other words, is the end of liberal globalisation. “When regimes end”, he writes, “they end in phases. Communism died over a period of 10 years, starting with the strike at the Gdansk shipyard in 1980. The fall of the Berlin Wall in 1989 was the great symbolic episode, and the 1991 coup against Mikhail Gorbachev was the final push. Yesterday [the launch of Trump’s tariffs], was globalisation’s Gorbachev moment. Trump’s first term was Gdansk, the canary in the coal mine.”

And I think he’s right. What we might call the liberal globalist world order is over, dead, finished —it’s just that many of its original advocates and supporters have so far failed to realise it.

Lastly, it’s also worth saying something about the countless experts and economists hitting the airwaves to argue this will not work —that the tariffs will bring about pain for consumers and businesses, possibly even tipping us into a global depression and reviving inflation.

These are the same people who also lose their minds when voters and renegade politicians oppose other parts of the liberal consensus, from mass uncontrolled migration through to the endless prioritisation of global corporations and the expert class.

Are they right? We will have to wait and see. But as JD Vance, understandably in my view, asked during one interview this week —are these not the same people, the same experts, who continuously told us for thirty years that hyper-globalisation would be good for everybody, that it would lift all boats, strengthen our communities, drive economic growth and make us all more prosperous? Indeed.