The US must continue to build networks, not walls

Since his first presidential run in 2016, Donald Trump has championed a shift toward economic insularity.

- Frank F Islam

While his first term was marked by a protectionist agenda, he has taken it to new heights since returning to office on January 20 by making tariffs, trade wars, and nationalist rhetoric central to Washington's economic playbook.

The president and his advisors frame his America First trade policy as measures to protect American industry and jobs. This is a strategic miscalculation. America is fighting yesterday's battles while ignoring its most powerful current economic asset — its dominance in the global services economy.

Historically, the US has always stayed ahead of the global economic curve. It led the world into industrialisation in the second half of the 20th century while much of the globe remained agrarian.

Today, it stands at the forefront of the digital economy, while many other nations are still focused on manufacturing. Yet, instead of reinforcing this forward momentum, the current policy approach represents a shift backwards. Such a shift could isolate the US from its competitive advantage in a rapidly globalising services sector.

Consider the numbers: According to the Bureau of Economic Analysis, in 2023, the US exported $1.03 trillion in services and imported $748.2 billion, resulting in a substantial trade surplus. The country accounted for 12.5% of global service exports, far surpassing any other nation.