For capital, it is the best of times and it is the worst of times. Rarely has it been wooed so assiduously and systematically by so many, and rarely has it been threatened with utter destruction by so few.

Donald Trump will leave a legacy in many domains but, arguably, his most abiding impact will be in remaking modern capitalism and shaking the foundations of the international economic architecture. Being in the middle of a historic moment makes it difficult, if not impossible, to judge it accurately. But make no mistake. Irrespective of the scope and durability of his tariff announcements, the profound importance of this moment in shaping how the world does business and makes money cannot be emphasised enough.

Shorn of complexities, here is what Trump is doing: To attract capital, he is punishing capital.

Trump’s fundamental belief is well-known by now. He sees globalisation as having been a one-way street where American capital went out of America, foreign capital didn’t come to America, and the world — from China to Europe to India — used the American market to profit at the cost of American producers and workers. To reverse it, and get both American and foreign capital back home, he wants to use what he thinks is his strongest leverage — the size and purchasing power of the American market. And he believes tariffs are the most effective instrument to do so, since higher import duties make access to that big market a lot more difficult and incentivise companies to make in America itself.

This retributive approach, the administration’s thinking goes,........

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