An upside down world took center stage in Davos. And the guest of honor is President Xi. The man from Beijing is the communist who is launching the anathema against the attempts to impede free trade. It’s like winding your watch back, Xi says, prophesying eventual disasters if Trump becomes a protectionist to the nth power. This is a historical paradox. While The Donald is about to take office, the US Congress is studying the “border tax.” It’s a heavy impost meant to penalize importers and reward exporters (like some kind of maxi IRPEG incentive). The rumblings are clear, demonstrated by the American President’s warning to Berlin: “There are too many Mercedes in the United States,” he told the Bild, threatening a 35% tax on all entering German autos. It’s the advance of a battle. The border tax’s real targets are China, Japan, Vietnam, and naturally Germany, the biggest suppliers of the US. Less protected countries will also end up in the crosshairs, like Italy. What will happen to our exports to the US of parmesan, for example?
The strategy will provoke equal and contrary reactions in the globalized market with immediate consequences: depressed consumption and falling markets. Trump the Protectionist has a problem: he needs to transform an economy burdened by a $500 billion deficit into an economy that boasts a surplus. But the remedy risks becoming a boomerang, seeing as all the big US multinationals are supplied overseas. Donald, however, is shooting straight. The Chinese are resigned to the arrival of the border tax, but they’re ready to fight it. They’re counting on alliances with more developed countries who will still have their markets open. And on the help of US lobbies. China had no hesitations about violating WTO clauses in the past for their own convenience. And yet, Xi is parading in Davos in the name of globalization. He, who represents the champion country of protectionism, who invaded Italy with its products and blocked the entry of our own. Walls built against walls will create victims on all sides: the first to fall will be the weakest economies, Italy’s among them.