In what Martin Wolf at the Financial Times called “pure gangsterism”, US President Donald Trump has extracted pledged investments of at least US$1.5 trillion from America’s trading partners. This amounts to the Marshall Plan in reverse.
While the Marshall Plan was seen as the most notable economic assistance programme in the history of the West, Trump’s capital transfer scheme may well be remembered as the largest flow of free capital to any country the world has ever witnessed. America’s role has thus undergone an about-face: from aid provider to aid recipient.
The Marshall Plan emphasised European ownership of planning – although Washington had approval authority, Europe’s governments set the priorities, and all programmes and projects came from them. But, as is emerging with the US deal with Japan, Trump is demanding that the projects be driven by his administration’s priorities and that he review the investments. Tokyo may refuse at the pain of additional tariffs.
While negotiations are ongoing, they set a disturbing precedent for South Korea, the EU and all other US trading partners that have pledged investments.
