Trump’s 21st-century mercantilism

[WASHINGTON] In his second administration, US President Donald Trump has injected the federal government deep into private markets and undermined the independence of government agencies and institutions. Most notably, he repeatedly and publicly pressured the Federal Reserve to lower interest rates.

In a sharp departure from the traditional US model, and the model of economic government that has prevailed in the US for centuries, Trump’s administration has acquired equity stakes in more than 30 American firms, and has even taken control of large swathes of the Venezuelan economy.

Until the 19th century, Trumpian-style mercantilism was widely regarded as sound economic policy. That changed after Adam Smith’s powerful refutation of mercantilism revolutionised economic thinking.