On June 18, 1883, under pressure from the economic crisis, the United States announced its withdrawal from the free trade system and implemented tariff barriers. Before Britain and Austria could react, on June 20, 1883, the French government also declared its exit from the free trade system. As a result, the free trade system that Britain and Austria had painstakingly built suddenly found itself on the brink of collapse. France was not the same as the United States. The latter had limited influence, so its withdrawal had little impact. But France was different. As one of three major countries of the world, its departure from the system carried enormous consequences. Upon receiving the news, the Austrian government was naturally furious. They had barely reaped half the harvest, and already the crops were fleeing, it was truly... frustrating. Minister of Economy Reinhardt Haldergen reported, “Due to the withdrawal of these two countries from the free trade system, the Vienna stock market index has plunged by 5.4%, while the London stock market has fallen by 7.3%. Industries engaged in import and export trade have suffered the greatest impact, with stocks generally dropping by more than 15%. In a single night, the Austrian stock market lost 310 million guilders, while the British stock market lost 520 million guilders. Financial fluctuations will inevitably affect the real economy. This happened too suddenly, and domestic enterprises were unprepared. Many businesses engaged in trade with these two countries are now planning layoffs and production cuts to mitigate the impact. France is our third-largest trading partner, with a total import and export trade volume of 64.58 million guilders in the first half of the year. Due to tariff barriers, this figure could decrease by two-fifths in the second half of the year. The United States is our seventh-largest trading partner, with a trade volume of 10.76 million guilders in the first half of the year. This may drop by one-third in the latter half. While the actual economic impact of these two countries’ withdrawal is not severe, the real problem is the market panic it has triggered. If other countries follow suit, the panic could escalate further, potentially leading to another stock market crash. The Ministry of Economy recommends taking immediate countermeasures to deter other nations and prevent the collapse of the free trade system.” With the establishment of the free trade system, economic ties within the capitalist world had become increasingly interconnected, making the global economy highly sensitive where one small change could have far-reaching consequences. Trade protectionism was contagious. Once multiple countries adopted tariff barriers, Britain and Austria, as major import-export nations, would suffer the most. Retaliation was necessary, but how to retaliate was the real question. Foreign Minister Wessenberg remarked, “This is a serious problem, but the British should be more anxious than we are. With both the United States and France withdrawing from the free trade system, their losses are at least three times greater than ours. Aside from raising tariffs against these two countries, the Ministry of Foreign Affairs does not recommend taking excessive measures. It would be best to wait for the British government to act first and then follow their lead.” Cowardly? Absolutely not! International politics is brutally pragmatic, always weighing costs against benefits. If you can’t even afford to spend money on cabbage, why even worry about eating pork? More importantly, aside from a direct tariff response, Austria had no real means of pressuring them. After rubbing his forehead, Franz made his decision: “First, halt the dumping strategy. If we continue this approach, we’ll end up provoking too much backlash. If the French want trade protection, let them have it! International competition has both advantages and disadvantages. While it may seem that France’s economy has suffered, their technological advancements in recent years have been undeniable. If this continues, our technological edge will soon be eroded. If they want to shut their doors and play alone, let them! The Ministry of Foreign Affairs’ next task is to isolate them politically. Make them the outlier that all European nations watch with caution.” This was both self-consolation and a fact. In international competition, French enterprises had to undergo technological innovation in order to survive, achieving breakthroughs in many fields. This was something that could not have happened during the era of trade barriers. The advantages and disadvantages were difficult to evaluate in a single statement, but France’s withdrawal from the system certainly contributed to its political isolation. Nations are similar to people. When everyone is in the same circle but you remain outside of it, you naturally attract strange looks from others. If someone fans the flames, you might find yourself isolated or even treated with hostility. Disregarding others’ opinions sounds easy. However, once you actually do it, you slowly realize that it feels as if the entire world is against you. ... London As the greatest beneficiary of the free trade system and the biggest victim of France’s withdrawal, the British government could not afford to ignore these developments. Minister of Economy Cornell Borchers wore a grim expression as he said, “The actions of the French and the Americans have dealt a heavy blow to our recently recovering economy. The most concerning issue is that they have shaken the foundation of the free trade system. If we do not find a way to counteract this impact, more countries will withdraw in pursuit of their own interests.” Britain was the earliest country to embrace free trade. To demonstrate sincerity to the outside world, it had even practiced unilateral free trade for a long period. Of course, this was possible because of Britain’s overwhelmingly strong industrial system. Before France and Austria completed their industrialization, Britain’s total industrial output exceeded that of all other nations combined. Even with open trade, other countries could only sell them grain and industrial raw materials. As for manufactured goods, there was simply no market for them. It might have seemed like fair competition, but in reality, there was no competition at all. Before the second industrial revolution, British industry and commerce had no serious rivals anywhere in the world. Foreign Secretary George proposed, “We can join forces with Austria to impose trade sanctions on France and the United States. The collapse of the free trade system does not only harm us. Austria is also suffering losses, so the Austrian government is unlikely to refuse.” Chancellor of the Exchequer Hugh Childers shook his head. “Unless the Royal Navy can blockade all French and American ports, I do not believe a trade embargo will have any real effect. Of course, we can stop their goods from entering Britain. However, changing a product label is not technically difficult, and we would have almost no way of detecting it. I can guarantee that the only result of an embargo would be a decrease in government revenue, without any actual impact.” There was no way around it. Capitalists could not be relied upon for discipline. Without strict oversight from the source, expecting voluntary compliance was unrealistic. “What is the Austrian government’s response?” Prime Minister Gladstone asked. Foreign Secretary George shrugged. “Their response has been rather passive. Aside from raising import tariffs on both countries in retaliation, the Austrians have not taken any further action. It seems that the Austrian government is entirely focused on its grand endeavor to bring down the Ottoman Empire and is not particularly interested in the United States and France leaving the free trade system.” The downfall of the Ottoman Empire was another major concern. Without the Ottomans as a buffer, Britain’s pressure in Persia would increase significantly. Upon hearing this bad news, Gladstone furrowed his brows even tighter. After looking at the map, he sighed and said, “Restart negotiations with Austria. We need guarantees from them regarding Persia’s security. As for those two unruly troublemakers, the United States and France, we will keep this debt in mind and settle it when the opportunity arises. The Ministry of Economy should come up with countermeasures beyond an embargo, and if necessary, we can cooperate with the Austrians. The Ministry of Foreign Affairs must continue working to stabilize other countries. We must ensure the stability of the free trade system.” Since preventing the fall of the Ottoman Empire was no longer an option, the next best course of action was to secure Persia’s safety. Britain and Austria had previously discussed this issue, but negotiations had stalled due to unresolved disputes over interests. Now, further delays were not an option. If they waited until after the Ottoman Empire collapsed, Britain would be in an even weaker position in future negotiations. By comparison, the young United States and the ambitious France were secondary concerns.
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https://postimg.cc/gallery/PwXsBkC (Maps of the current territories of the countries in this novel made by ScH)
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