The Interplay of Policy and Emotion in Economic Nationalism

Policy interests markets, but few voters. Emotion tends to be more important in elections. The global rise of economic nationalism is rooted in emotion, but is also a policy with real world consequences. Yesterday, former US President Trump pledged to use corporate tax cuts and consumer tax increases (via tariffs) to bring manufacturing jobs back to the US. Who would do those jobs with near full employment was not specified. Investors have hitherto regarded Trump’s tariff proposals as being emotional rather than policy, given their extreme nature.