Globalisation, we need an industrial policy fit for the times

The acute uncertainty about the conduct of the United States under Donald Trump is the thread running through the 2025 Internationalisation Report by Confindustria Lombardia. This uncertainty reflects an unequivocal certainty: America now openly rejects the system it created after World War II. A system that made the post-war European 'miracle' possible and on which the most dynamic sectors of our economies, but also those of Asia that have repeatedly entered the circuits of American-centric globalisation, have calibrated themselves. That system, conceived at Bretton Woods (1944), is in fact - but not in name - an enormous tax mechanism. The US trade deficit is not an accident of it, but a logical consequence. The ability to issue debt at will associated with holding reserve currency has made the US the buyer of last resort of the world. This allowed them, especially after the dollar's decoupling from gold (1971), to print money under low inflation to pay for imports that were gradually replacing productive capacity migrating elsewhere. Part of those dollars returned to America in the form of purchases of an increasingly large federal debt. In this way, exporters of hydrocarbons - the energy source on which the world still relies - parked their profits in dollars, as did Asian exporters. While the 'global South' was kept on a leash by 'rescue' programmes imposing austerity and debt, often to Western banks. The supposedly neutral IMF and World Bank became instruments to discipline debtors and dissuade them from seeking alternative currencies. The result: a tributary order in which flows to the centre (the US) are invisible because they are financialised and uncontested because they have become the norm. The international order based on law has been based, as always, on 'one' right: that of the hegemon. The discrete quantity that breaks the bank is called China. In just over thirty years, Beijing has deployed an arsenal capable of subverting the system. Its cornerstones: an unprecedented productive capacity; a dirigiste capitalism that allocates resources and credit in a way that is not always efficient, but rapid and blunt; the undisputed primacy of politics (the Party-State) over economics and technology, geo-economic instruments and never surrogates of strategic thinking; the maintenance of strict controls on the exchange rate, source of enormous trade distortions; the building of a maritime power that threatens the primacy of the US Navy and its ability to preside over the seas, arteries of world trade. Lastly: the obsession with manufacturing primacy, coupled with mercantilist policies that aim to make the country inextricable from global supply chains. Supply chains on which rests the western ability to maintain prosperity, social peace and - in the US case - power. The rendezvous with a supposedly ended history finds Europe unprepared. Partly because ours are economies of transformation, living off the added value of what they produce (and sell) with what they do not have. Starting with energy, of which the US is again a net exporter thanks to shale. This makes us vulnerable to a world in which the economy is once again an instrument of power responding to geopolitical, as well as industrial and profit logics. And which therefore lends itself poorly to ideological approaches. Example: the metamorphosis of the New Green Deal into rearmament at all costs, including environmental ones, with strategic aims that are still vague. Europe's current weakness also stems from the structure of its integration. A stateless currency. The coexistence of countries with divergent production apparatuses and security priorities. A single market designed to favour tax competition at the expense of industrial policy. This, having come in through the window, is now pursued exclusively by leveraging national industrial and fiscal advantages, thus precluding the continental aggregations needed to compete with non-European giants. All this, of course, with unchanged European treaties. As the Confindustria Lombardy Report points out, Italy suffers as much as and more than others from problematic dependencies: from the USA as a market, from China as a supplier, from a Germany in confusion as a supply chain customer. This widespread awareness must be the starting point for forging industrial policies in keeping with the times. Times of which Trump is a symptom, first and foremost and more than a creator.

Head of editing and international relations of Limes