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Leader_The protectionist trade fallacies of America First

Before even taking up residence in the Oval Office, Donald Trump has had US companies scurrying to avoid his capricious wrath. This week it was the turn of Ford, which cancelled a new $1.6bn car plant in Mexico, instead increasing production in Michigan.

The announcement, which followed a tweet from Mr Trump on Tuesday threatening Ford’s rival GM with a “big border tax” for manufacturing abroad, may have been good public relations. Yet it is profoundly wrong-headed that the US president-elect, armed with a protectionist mindset, appears to be conducting industrial policy by bullying individual companies on Twitter.

If he persists with this kind of intervention, Mr Trump will not help to boost employment in America. Instead, he will instil a fear of political meddling among business leaders, disrupt efficient international supply chains and risk stoking a protectionist and populist backlash among America’s trading partners.

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