Is this the secret manual behind Trump’s tough talk on tariffs?

In 1945, economist Albert Hirschman wrote National Power and the Structure of Foreign Trade. It bears an eerie – and sobering – synchrony with the US president’s decisions today, writes Chris Blackhurst

It is doubtful if Donald Trump has ever heard of Albert Hirschman. If asked, the president would probably speculate as to whether he was “that German guy who came third in the Masters”. But there may be those in his advisory circle who are well-versed in the works of the economist, author of National Power and the Structure of Foreign Trade.

Hirschman wrote his book in 1945, having settled in Berkeley (ironically a Trump hate school if there ever was one) in California after fleeing a Europe consumed by the terrors of the Spanish civil war and Nazi Germany. This turned him towards the study of autarky or self-sufficiency, looking at how countries can gain independence from others, ceasing to rely on them and reducing foreign influence.

It’s writ large on his cap. He will Make America Great Again, not by launching wars and using military might and costing American lives, but by enforcing protectionism.

For decades, the planet has followed a free trade agenda. But, says Trump and co, that has got the US nowhere – all it’s resulted in is the streets of Manhattan being gridlocked by Toyotas and Mercs, rather than Chevrolets. We’re going to create American jobs for American people; we’re going to win our country back. In so doing, we will be king, same as if we sent our Marines into action and bombed the hell out of others. America will be just great.

Largely forgotten in the face of scrapped customs barriers, in recent years economists have dusted down Hirschman, exploring a counter, as they like to do, to the current orthodoxy. So, three years ago, the US economists, Christopher Clayton, Matteo Maggiori and Jesse Schreger, published a paper called “Putting Economics Back Into Geonomics”, shorthand for exercising economic heft, which resurrected Hirschman. That was taken up by others, notably receiving star billing at this year’s American Finance Association gathering, courtesy of a favourable speech from Maurice Obstfeld, former chief economist of the International Monetary Fund no less.

While Trump was on the golf course, presumably his minions’ interest was stirred. With his shock and awe tariffs, he’s practising geonomics, that is what he is doing.

In those, he may be deluded. In the same way that the US war machine may not be what it was, hence, his turning away from the traditional form of conquest and subjugation (the humiliation of Vietnam is an abiding Trump memory), its ability to flex economic muscle may not be so fearsome either.

That’s what the markets are concluding. It’s the American stocks, Standard & Poor’s, that are taking a pounding. Trump will not like this slap in the face. He hated it back in real estate when bankers had the temerity to question his finances; here they are, doing it again. He can bully others, but not them.

For his brand of geonomics to succeed, he is counting on US financial hegemony and supremacy in tech. He’s looking to them to deliver, and from that, US manufacturing will be reborn, the rust belt will boom once more.

In which case, he might want to ask himself why sanctions against Russia have not worked, and why Vladimir Putin has found ready avenues elsewhere. This may make Trump tremble over his next putt, but could it be that the dollar is no longer so universal, not so mighty? Nations have shown they no longer depend on the greenback, that they can get along fine without it.

Likewise, tech. It’s true that Silicon Valley rules, that his new friends, the tech bros, are in charge, but for how long? The surprise of DeepSeek was that Chinese AI was catching up, if not overtaking. They were achieving the same outcome but on less power; they had found a way.

He is ignoring as well that the world he is seeking to suppress is heavily inter-linked. Globalisation, as much as he might abhor it, really is a thing. Those corporations that produce goods “made in America” are using parts and materials imported from elsewhere. They are not easily replaced.

Trump may find the playground is crowded, and that the other kids gang up on him. He may become the one running for cover. For today’s world, his chosen weapon, as theoretically pleasing as it is, may prove to be outmoded and incapable.