Simple Economics: Why is national market protection significantly important?

The U.S. is moving to aggressively defend its market in an attempt to address foreign debt and negative trade. But it's not that simple.

Why doesn't Belarus get hit by this tariff tsunami? Read more in the author's column "Simple Economics".

We, who live today, are witnessing major historical processes: the ideas of globalization have failed, the whole world is returning to protectionism - borders are being closed, tariffs, sanctions and other forms of protection are being introduced.

And this is understandable: the domestic market is the key driver of economic growth in a declining global economy. It gives jobs, provides conditions for accumulation at low inflation levels.

But it is not just the domestic market of one country that is important (it may be small) - it is the integration of countries and formation of united markets, and then - the integration of integrations. In other words, connection of unions of countries and formation of powerful regional markets.

Protecting domestic markets becomes a priority

Within the framework of the Union State, EAEU, CIS, BRICS, and SCO, Belarus is doing just that - protecting and developing its markets and preventing foreign capital from exploiting itself. The country is actively engaged in import substitution, localization, own scientific and technological projects.

Opponents/competitors are extremely irritated by our integration projects and successes. The whole point is that their corporations are in a state of deep crisis of overproduction - there are a lot of goods, but no one to sell them to. They would like to "dump everything" on us, but, alas, they have launched a sanctions war against us, and now we do not need their goods, we are able to produce everything we need.

Integration in the post-Soviet space ensures prosperity

It is interesting to see how the new White House administration is strangling their allies - Europeans, Canadians, Mexicans - by raising tariffs. Because of the lack of access to our markets, they are combating each other.

On April 2, Trump declared "Liberation Day" - on this day Trump imposed 25 percent tariffs on imported automobile products. In this way, the United States is trying to solve the issue of negative trade balance, significant foreign debt, and to force global automakers to start moving their plants to the United States.

Therefore, for the US, this "Liberation day" is a liberation path from the open market. According to Trump, a number of states have been 'ripping off' the US for 45 years, while the States were soft and weak. This was the cause of excessive growth of the national debt, now it is important to return most of this money, primarily from the European Union and China.

Trump noted, "Companies are coming back to America to avoid paying taxes. They are already looking for sites to build their factories. Honda has already started building a plant in Indiana."

But not everything is so nice!

Most automobile companies are in no hurry to move production to the US. This is associated with high monetary and time costs.

Thus, Toyota is ready to reduce its expenses to compensate for losses from the tariff policy of the White House.

European Union countries in general have turned to direct threats - they have declared a trade war against the United States and are ready to impose safeguard tariffs on all American products.

U.S. competitors intend to fight for their automakers

As we can see, there is a global battle for the automobile industry. Due to the efforts of our President, Belarus has national automakers. It is now important to maximize localization, to involve all our enterprises into the production of domestic cars - this is how we will avoid the negative consequences of the global tariff tsunamis.