EVERY time an economy somewhere is beset with domestic woes, some governments play politics and give in to protectionism.

Last week, stock markets tumbled as China strikes back with its own levies on US agricultural and steel products after US President Donald Trump announced plans to impose US$60 billion in charges on Chinese imports. So when a major economy takes a more protectionist stance, and threatens to tear up agreements and impose tariffs, what can a small open economy like Singapore do? Nothing much really, except to strive to be even more open and make sure it continues to attract more capital into the city-state.

The focus has to be on getting our own house right, and move towards what Robert Reich, a professor at University of California, Berkeley, calls an outward-looking economic nationalism. By this he means each nation takes responsibility for improving the wealth-creating capacities of its citizens, but work with other nations to ensure that these improvements do not come at others' expense.