- विज्ञापन -
History, they say, repeats itself and is a great teacher. On 4th April 2025, Wong announced PM Lawrence’s message to his countrymen: “My fellow Singaporeans, I’ve said before that the world is changing in ways that will disadvantage small, open economies like Singapore. I had previously questioned the assessment. But the recent ‘Liberation Day’ announcement by the US leaves no room for doubt. It marks a seismic change in the world order. The era of free markets, globalization, and free trade is over. We are entering a new phase – one that is more arbitrary, protectionist, and dangerous.
For decades, President Trump has argued that such tariffs will encourage US consumers to buy more American-made goods, increase the amount of tax raised, and lead to huge levels of investment in the country. He wants to reduce the gap between the volume of goods the US buys from other countries and the value of those it sells to them. He argues that America has been taken advantage of by ‘cheaters’ and ‘pillaged’ by foreigners.
Finally, the D-day arrived on 2nd April 2025 when President Trump announced tariffs that shook the world. These tariffs include 49% on Cambodian products, 48% on Vietnamese imports, and an extra 34% on tariffs from China (in addition to the 10% tariffs previously announced). Goods from the EU will be taxed at 20%. The cost of a car using parts from Mexico and Canada alone could rise by $40,000–$10,000 (£20,925 – £7,858), according to analysts at the Anderson Economic Group. The chance of a recession rose to 50% after Trump’s announcement on new tariffs, according to former International Monetary Fund (IMF) chief economist Ken Rogoff.
Lessons from history
To better understand this ‘seismic change,’ a bit of history would help. Trade and foreign policy have been intertwined throughout history, with foreign policy often tailored to promote trade interests. In the 3rd century BC, during the Han Dynasty, China used its military power to maintain the Silk Road due to its value for trade. In the year 30 BC, Rome conquered Egypt in large part to have a better supply of grain (WTO DGP Wol).
There is truth in the fact that many deaths and wars have been fought over economic self-interest. Hunter Nottage wrote that a single page of text from the 1941 Atlantic Charter is a powerful reminder that the global rules underpinning our multilateral economic system were a direct reaction to the Second World War, with the desire to never repeat it. The Atlantic Charter was agreed upon by Winston Churchill and Franklin D. Roosevelt at a critical moment when the United States was considering entering the war. Comprised of 8 succinct clauses, the Charter set out ‘common principles’ on which both countries based their ‘hopes for a better future for the world.’
The 1941 Voyage and Atlantic Charter
At a time when the world was in the throes of its bloodiest conflict to date, the United States and the British Commonwealth of nations collaborated for enduring peace and security. The secret meeting in 1941 in Newfoundland, Canada, was daring and historic. The Atlantic Charter, which they agreed to then, became not only the genesis of several remarkable achievements in multilateral international economic rule-making, including the General Agreement on Tariffs and Trade and Bretton Woods institutions, but also paved the way for an unprecedented era of relative peace and security (WTO).
However, a brilliant mind that influenced this historic change to the world order was the U.S. Secretary of State, Cordell Hull. He recognized that the Great Depression of the 1930s was a vicious spiral of trade wars that saw the world’s trade diminish, worsened unemployment, and eventually contributed to the outbreak of devastating war. Hull won the Nobel Peace Prize in 1945 for “co-initiating the United Nations” and for his belief that “enduring peace and welfare of nations are indissolubly connected with … the maximum practicable degree of freedom in international trade.”
The Atlantic Charter is a one-page document that expresses a “common desire” to set out ‘common principles’ on which countries could base their hopes for a better future for the free world. Clause 4 states, “They will endeavour, with due respect for their existing obligations, to further the enjoyment by all States, great or small, victor or vanquished, of access on equal terms to the trade and to the raw materials of the world which are needed for their economic prosperity.” Clause 5 states, “They desire to bring about the fullest collaboration between all nations in the economic field with the object of securing, for all, improved labour standards, economic advancement, and social security.”
Thus, the Charter recognized the essential oneness of all nations, the deep interdependency of their economies, and the need to run their convictions. The two leaders did not attempt to ruin trade with all kinds of additional barriers and hindrances, as was the mood in the 1930s.
What happened in the 1930s?
Harry Dexter White from the UK became a key architect of the Bretton Woods system, which eventually led to the establishment of the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). Writing in 1942, White articulated that “the absence of a high degree of economic collaboration among the leading nations will, during the coming decade, inevitably result in economic warfare that will be a prelude and instigator to military warfare.”
The retaliatory trade barriers of the 1920s and 1930s included the United States in 1929. The United Kingdom responded with emergency tariffs in the 1932 Ottawa Agreement to deepen preferential trade with its dominions. Hull lamented that Britain had “closed like an oyster shell.” The 66 percent decline in world trade by 1933 aggravated the Great Depression and contributed to the Second World War.
EU chief Ursula von der Leyen warned that “the consequences will be dire for millions of people around the globe.” China has announced additional 34% tariffs on US goods from 10 April. Australia’s Anthony Albanese said, “this is not the act of a friend.” South Korea’s acting president Han Duck-Soo said, “the global trade war has become a reality.” Japan said its 24% levy was “extremely regrettable” and could violate World Trade Organization and US-Japan agreements (BBC).
Some economists are already drawing parallels between the 1930s ‘beggar-thy-neighbor tariffs’ and those of the recent Liberation Day.
In 1941, Churchill’s battleship HMS Prince of Wales arrived at Placentia Bay off the shores of Newfoundland, surrounded by German U-boats. President Roosevelt on the USS Augusta and his flotilla greeted him. In those hours of light within the darkest years, both the United States and the United Kingdom realized the relationship between global economic collaboration, open trade, and enduring peace and security.
However, their peace now seems to be a harbinger of the end of that era. Will the warning from the Singapore PM that “the shocks to come” are imminent, come true?
