By Alves Manjate[1]
Maputo (MOZTIMES) - There is a saying that “when America sneezes, the world catches a cold”. This is an old economic metaphor illustrating the interdependence of the global economic system on the United States. Today, the saying remains entirely relevant, as economic events in the United States — such as recessions, interest rate hikes, shifts in monetary policy, or trade wars — have direct impacts on markets, economies, and political decisions around the world. This influence stems from deep global interdependence, reflected in highly integrated financial markets, transnational supply chains, the geopolitical role of the U.S., and, above all, the dominance of the dollar as the main currency for international trade and as a benchmark for much of the external debt of nations.
Recently, U.S. President Donald Trump announced reciprocal tariffs on a wide range of imported products in an effort, according to him, to protect American industry and rebalance foreign trade. Among the 185 countries affected, Mozambique was hit with a 16% tariff — a measure that may significantly impact the country’s exports to the U.S., which include precious stones, titanium, graphite, tobacco, aluminum, and sugar. This increase in tariffs could reduce the competitiveness of these products and lead to decreased demand. While Mozambique’s trade relationship with the United States is relatively small compared to other partners, the ripple effects of these tariffs could impact supply chains and financial flows in a country that relies on foreign capital to grow, develop its energy sector, improve infrastructure, create jobs, and increase the population’s well-being.
In fact, following the announcement of reciprocal tariffs on April 2nd, major stock markets dropped, reflecting global economic uncertainty and rising protectionism. Despite the 90-day tariff pause announced by the U.S. president a week later, the lack of predictability in trade relations and uncertainty about future tariffs could raise perceived risk and discourage new investment. For a country like ours, this volatile environment can harm investor confidence and hinder long-term planning, making the country's economic future even more uncertain.
More than that, the new U.S. stance reignites a crucial debate about globalization as we know it. The observed impact on financial markets signals not only a speculative reaction but also a potential structural reconfiguration of the international economic order. In his 1817 book On the Principles of Political Economy and Taxation, David Ricardo formulated the theory of comparative advantage, which became one of the foundational principles of international trade — and, by extension, the logic that supported modern globalization. Ricardo argued that countries should specialize in producing goods in which they are relatively more efficient, promoting mutually beneficial exchanges. This logic sustained globalization for decades, allowing Global South countries to attract industries through cheap labor and tax incentives.
However, with Donald Trump’s decision to prioritize domestic production and limit imports, the U.S. is moving away from this Ricardian ideal, promoting a form of “strategic deglobalization.” In other words, the U.S. is attempting to undo the very trade system it helped create — first in 1944, with the launch of the Bretton Woods system, which laid the foundation for global economic cooperation, and later in the 1980s, when Ronald Reagan and Margaret Thatcher initiated the liberal order by promoting deregulation and market liberalization — a system that made the U.S. the richest and most powerful nation in the world.
On the other hand, Charles A. Kupchan, in his book Isolationism: A History of America’s Efforts to Shield Itself from the World (2020), argues that isolationism is a recurring and dominant tradition in U.S. foreign policy, marked by historical periods in which the country avoided international commitments and prioritized domestic interests. Kupchan’s thesis helps explain the current repositioning of American trade policy, especially the protectionist stance adopted in recent years, such as the trade war with China and withdrawal from multilateral agreements. According to Kupchan, these actions reflect a cyclical return to isolationism — now in its economic form — showing that U.S. economic nationalism is not an anomaly but part of a historical pattern.
While U.S. trade actions have global implications, China remains the primary focus, both strategically and symbolically. However, judging by recent events, China is not intimidated by America’s new stance. Analysts believe that the country is well-prepared to face the current scenario. President Xi Jinping has stated that China will not yield to what he called the United States' “unilateral bullying.”
Since the first trade war initiated by Trump during his first term, China has taken strategic steps, such as diversifying its trade relationships — reducing the share of exports to the U.S. from 20% to under 15%. With the new U.S. tariffs possibly exceeding 125%, it is estimated that Chinese exports to the U.S. may fall by half in the coming years, which will drive up product prices and impose a high cost on American consumers, at least until domestic factories adapt.
In fact, China embodies the broader fears driving Trump’s current protectionist shift: loss of economic dominance, erosion of industrial power, and rising competition from a state-capitalist model. On this topic, Immanuel Wallerstein, in his work The Modern World-System, first published in 1974, argued that the world is structured as a global capitalist system divided into Core (industrialized, dominant countries), Periphery (raw material suppliers and cheap labor), and Semi-periphery (transitional countries).
In this system, the core seeks to maintain its economic and political hegemony, and when that hegemony is threatened (e.g., by China's rise or external industrial dependence), it tends to react with protectionist measures, interventionism, and trade conflicts — as we are now seeing from the U.S. In Wallerstein’s view, trade wars are a typical response of a power seeking to maintain its dominance in the global system, often at the expense of the very rules it helped create. This creates instability for peripheral (like Mozambique) and semi-peripheral countries that rely on global trade and foreign investment.
Although globalization has undeniably brought benefits, such as increased trade and access to technology, it has also created significant structural vulnerabilities in Global South countries. Accelerated economic openness resulted in dependence on external markets, premature deindustrialization, and greater exposure to financial shocks and commodity price fluctuations. Without proper institutional strengthening, many Global South countries have seen growing inequality, labor precarity, and the dominance of transnational corporations, which limits their economic sovereignty and compromises autonomous, sustainable development.
Nevertheless, the “deglobalization” posture adopted by the U.S. opens new opportunities for the Global South, especially through initiatives that promote cooperation among developing countries and alternatives to the current U.S.-led economic model. The African Continental Free Trade Area (AfCFTA), a pact aimed at reducing tariffs and trade barriers among African nations, is a crucial example with the potential to drive industrialization and economic integration within Africa. However, its success depends on overcoming obstacles such as poor infrastructure, economic disparities, bureaucracy, low productive diversification, and institutional fragility.
In addition, South-South partnerships such as the New Development Bank (NDB) initiative led by the BRICS offer an alternative to traditional financing and strengthen infrastructure in emerging countries. However, the bloc faces internal challenges such as geopolitical rivalries, member inequalities, and coordination and governance issues. Furthermore, the China-Africa Partnership (FOCAC) and the Belt and Road Initiative may also play vital roles by creating new trade links and investing in modern infrastructure, facilitating more independent access to global markets. Despite progress, these programs face criticism regarding transparency, growing dependency on China, and the spread of authoritarian development models.
Taken together, these initiatives reflect a legitimate quest for alternatives to the U.S.-led economic system and greater autonomy for the Global South. However, their impact will depend on the proponents’ ability to address deep internal challenges and build more effective, inclusive, and resilient cooperative mechanisms. Without this, there is a risk that the promises of structural transformation may simply reproduce new forms of dependency or inequality within the Global South itself.
In conclusion, a discourse analysis of the Trump’s economic team suggests a strategy to reshape globalization under American leadership through tariffs and bilateral deals. However, this approach runs into the Triffin Dilemma: the tension between maintaining the dollar as a global currency — which requires deficits — and reindustrializing the U.S., which requires surpluses.
Trump appears to seek a new informal “global deal,” similar to a Bretton Woods 2.0, in which the U.S. would offer strategic benefits (including market access and participation in the dollar system) in exchange for adherence to its rules. However, the current scenario of multipolarity and international distrust contrasts sharply with the cooperative context of 1944, making such a project highly unlikely. (AM)
[1] University Lecturer, Master in International Politics
