2 April 2025 was ‘Liberation Day’. President Trump announced tariffs of at least ten percent for practically all countries in the world (1). American politics has thus dealt a severe blow to economic globalisation, which it has decisively paved the way for since the 1980s. And so the consequences of his own, serious political mistakes are being imposed on others, simply because it is possible. ‘The global economy is fundamentally different today than it was yesterday,’ Mark Carney, Prime Minister of Canada, assessed the situation the following day. (2) Although the level of almost all import tariffs was temporarily reduced again a week later, the shock of the unilateral action remains – not least in the memory.
After all, it was not the first time that the US government had presented its trading partners and allies with a fait accompli. On 15 August 1971, President Nixon (3) informed the American and global public that the dollar's previous peg to gold would be ‘temporarily’ suspended. This meant nothing less than the end of the post-war monetary order. The dollar peg to gold had served as a strong anchor for the Bretton Woods monetary order. (4) Other currencies, such as the Deutschmark, the franc and the pound sterling, were required to fluctuate within narrow margins against the dollar. Nixon also announced the introduction of a 10 per cent import duty until the cause of these fluctuations – unfair trade practices – had been eliminated.
In the wake of the collapse of the international monetary system, Europe had to turn over a new leaf in its currency policy. In April 1972, the signatory states of the 1957 EEC Treaty (Belgium, France, Italy, Luxembourg, the Netherlands and the Federal Republic of Germany) set up the European Exchange Rate Mechanism (ERM) to limit the exchange rate fluctuations of European currencies. (5) According to this, the exchange rates of the participating currencies were not allowed to deviate by more than 2.25 per cent from the agreed central rates. This ‘currency snake’ was replaced by the European Monetary System (EMS) in 1979. (6) And this formed the second of three stages on the way to the European Economic and Monetary Union – that is, to the euro – until 1999.
A second course setting with consequences for Europe and the rest of the world to this day was the economic policy of ‘Reaganomics’. President Reagan, elected in 1980, stands for ‘a turning point in the economic and social development of the USA,’ according to John Komlos and Hermann Schubert in their 2020 essay ‘Reaganomics - Paving the Way for Trumpism.’ (7) This meant a departure from government intervention in the economy and its regulation, as well as ‘far-reaching tax cuts’. (p.64) ‘Instead of promoting balanced, inclusive growth, the tax cuts led to huge budget deficits, the dismantling of state social services and a sudden and permanent change in the distribution of income in favour of the super-rich.’ (p.64)
The deregulation of the financial markets began in the 1980s (p.65) and ‘hyper-globalisation’ was to unfold. The ‘Rhenish capitalism’ (8) prevalent in continental Europe, which was hedged by the welfare state, came under pressure. The European economy had to fight for its competitiveness. Many billions flowed out of Europe across the Atlantic to be invested there. Despite the financial crisis that hit the US in 2008, this has not changed to this day. That is why a European capital markets union is needed to go with the single currency. Or, as it is better known, a European savings and investment union. (9) Capital should yield a return in Europe, for the benefit of savers and companies and for the transformation of the economy and defence.
Anyone who still thinks that the prospects for capital investments in the EU are fundamentally worse than in the US should take a closer look at developments there. With Reaganomics, the country has entered a path dependency in which ‘budget deficits are considered the norm in fiscal policy’. (p. 71) So far, no American government has broken away from this path. This will ‘most likely have disastrous consequences for the future’, as will the promotion of ‘plutocracy as the dominant form of political rule for US-American society’, according to the article. However, the threat to democracy and the rule of law is likely to be even more dramatic today than the two authors could have imagined five years ago.
Margit Reiser-Schober
Error in content? Error in translation? – eurolandpost(at)gmx.eu
Translation: www.deepl.com
- Tabelle der Länder und Höhe der Zölle:
https://www.wiwo.de/politik/ausland/zoelle-hoehe-laender-territorien-aktuelle-liste-der-neuen-importabgaben-der-usa/100118701.html
- Mark Carney
https://x.com/MarkJCarney/status/1907925125875294335
- Nixon Fernsehansprache 15. August 1971
https://www.youtube.com/watch?v=0BVj2gT6CgI&t=721s
August 15 1971 - Remembering When Nixon Took the U.S. Off the Gold Standard
Bloomberg Television, ab Minute 8:40
https://www.youtube.com/watch?v=MuUOO5VAmFI
- Bundesbank–Information zu Bretton Woods
https://www.bundesbank.de/de/aufgaben/themen/1973-das-ende-von-bretton-woods-als-die-kurse-schwanken-lernten-663622
Zusatz-Info: Werner-Plan
https://www.bpb.de/kurz-knapp/lexika/das-europalexikon/177363/werner-plan/
Schon 1970 wurde im Auftrag der Staats- und Regierungschefs der EWG-Mitgliedsländer der nach seinem Urheber benannte Werner-Plan erarbeitet. Dieser schlug einen Dreistufenplan vor, um die europäische Währungsunion bis zum Jahr 1980 zu erreichen.
- Europäischer Wechselkursverbund/Europäische Währungsschlange
https://www.bundesbank.de/dynamic/action/de/startseite/glossar/723820/glossar?firstLetter=E&contentId=652180#anchor-652180
- Europäisches Währungssystem
https://www.bundesbank.de/dynamic/action/de/startseite/glossar/723820/glossar?firstLetter=E&contentId=652180#anchor-652180
- John Komlos, Hermann Schubert: „Reaganomics – Wegbereiter des Trumpismus“
https://www.wirtschaftsdienst.eu/inhalt/jahr/2020/heft/1/beitrag/reaganomics-wegbereiter-des-trumpismus-6072.html
- Rheinischer Kapitalismus
https://www.bpb.de/themen/deutsche-einheit/lange-wege-der-deutschen-einheit/501232/rheinischer-kapitalismus/
- EU-Kommission stellt Spar- und Investitionsunion vor: Sparer und Unternehmen profitieren
https://germany.representation.ec.europa.eu/news/eu-kommission-stellt-spar-und-investitionsunion-vor-sparer-und-unternehmen-profitieren-2025-03-19_de