Tag: foreign policy

Making Sense of Trump’s Tariffs

Trump’s entire political history is a cautionary tale against confusing elite and media fury for heartland sentiment. A certain strategic coherence and a common tactic unite Trump’s domestic and foreign policies in pursuit of the overarching goal of making America great again. The bigger concern is not that there’s no method to his apparent madness, but that the implementation of his ambitious national and international agenda could be imperilled by incompetence and bumbling, as with the amateurish use of Signal chat groups for highly sensitive discussions.

There are three components to each of Trump’s domestic and foreign policies that he is pursuing with a sense of urgency with wounds still raw from how the DC swamp-dwellers derailed his first term. Domestically, he is dismantling Net Zero, DEI and gender self-ID policies that have imposed exorbitant tax, regulatory and compliance costs on American consumers, producers and institutions. They have also deepened identitarian divisions and conflicts that threaten to destroy social cohesion and unleash an orgy of national self-abasement. Internationally, he wants to step back from forever wars that have taken a heavy toll on American blood and treasure, distribute the burden of defending Western interests and values more equitably among allies – J.D. Vance is surely right to say that being a ‘permanent security vassal’ of the US is neither in its nor their interest – and reverse the decades-long drift into globalisation and globalism that have deindustrialised America and ‘Gulliverised’ its freedom of action in world affairs with normative restraints. Mass immigration is a seventh on-border pathology that straddles domestic and foreign policy. Between them, the suite of domestic and international policies will, he believes, restore national pride and identity, stop America being ripped off by security and trade partners, re-shore manufacturing capacity and re-establish America as the word’s most powerful industrial and military power.

This is where the paradigm-shifting tariffs come in. Benjamin Brewster is credited with having written in the Yale Literary Magazine way back in February 1882 that “in theory there is no difference between theory and practice, while in practice there is”. In orthodox economic theory, free trade and globalisation create winners all round. In practice, they’ve created winners and losers, widening inequality both within and among nations. ‘Free’ trade has rewarded ‘everywhere’ elites even while its prescriptions have immiserated the ‘nowhere’ folks and denuded America’s manufacturing strengths. The inequitable distribution of the burdens of globalisation has shredded the social contracts between governments and citizens. People are citizens of nations, not of economies. Nationalism requires the prioritisation of citizens over business. Policies that enrich Chinese while impoverishing Americans, that make China stronger while hollowing out America’s industrial-cum-military might, are the antithesis of this foundational social compact.

Trump’s instinct may well be right that globalisation had shifted the trading balance to America’s net disadvantage and the new equilibrium that eventually settles after his rupture of the existing world trading order will reposition the US to recover lost ground. The WTO, for example, has proven to be not fit for purpose in enforcing fair-trade rules on a predatory non-market economy of China’s size and a mercantilist bloc like the EU. Time will tell if the punitive tariffs are a ‘shock and awe’ negotiating tactic to recalibrate the trading order or an attempt to compel trading partners to capitulate to arbitrary US demands. Trump is taking an audacious gamble that efforts by others to threaten American financial primacy as they de-risk from the US by diversifying to other markets and suppliers will quickly run into hard limits. Besides, how many countries will, if pushed to the choice, opt for long-term strategic dependence on China rather than the US? Will we? The scramble for bilateral deals with Washington, by countries that hold weaker trade cards than the US and are rushing to placate Trump, may prove a harbinger. For example, hit with 18% tariffs, Zimbabwe has suspended tariffs on US goods in order to build a ‘positive relationship’ with the Trump Administration. And the administration has worked the miracle of converting British PM Keir Starmer into a champion of free speech and increased defence spending while cutting health and foreign aid spending.

Michael Pettis of the Carnegie Endowment for International Peace, writing in Foreign Affairs on April 21st, notes that the world trading order became increasingly cumbersome as countries externalised domestic economic imbalances into trading imbalances through a complex maze of tariffs, non-tariff barriers and subsidies. Trump’s policies aim at the transformation of this global trade and capital regime that subordinated the needs of individual economies to the demands of the global system. A new equilibrium of individual and global needs could result in better-balanced economic growth, higher wages and trade parity.

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The Case For Tariffs – How Tariffs Can Help Bring Back The Golden Age Of American Economy

About once a decade, the question of Protective Tariffs finds its way into the national debate. Whether a political candidate dares to raise the issue or a clever collection of activists and analysts work together to inject it into the national discussion, the reaction is always the same from the halls of entrenched power – hysteria and panic over the mere discussion of tariffs. 

Both the establishment Right and the establishment Left in the United States argue that tariffs represent an end to industry and trade, that they deny opportunity to the third world, will only raise prices for American consumers, and that they are the first shot in a tragic trade war. In the halls of corporations and academia, everyone seems to agree – tariffs are bad for the economy and the country as a whole. Predictably, corporate property in Congress parrot the same line and it appears that opposing tariffs is one of the few areas where Democrats and Republicans can agree.

Thus, when anti-tariff politicians, CEOs, and academics speak, their warnings that tariffs represent an end to their globalist vision where international corporations continue to abandon Western workers with their pesky wages, rights, and protections while exploiting third world workers for lower wages, easy replacement, and lack of concern for basic human needs are thinly veiled. This latter, more honest, concern is, in fact, correct. tariffs do threaten globalism and corporate exploitation of workers and societies. Particularly older working class citizens remember the days of American Tariffs and the undeniably better economic distribution of wealth and opportunity they afforded. Younger (middle aged) Americans remember at least the removal of those Tariffs and the “giant sucking sound” of American jobs leaving for Mexico, South and Central America, Asia, and China that decimated their communities and the American economy before their eyes. Indeed, it seems that the working class inherently understand the benefit of Tariffs and Protectionism, at least when they are properly explained. This is why such a massive and sustained media, academic, and governmental propaganda campaign has been invoked to convince them otherwise and why, whenever Tariffs are mentioned in the public discourse, they are immediately attacked as fringe, crazy, xenophobic, racist, populist, and dangerous. 

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Stocks surge as White House confirms 100 countries want a trade deal with U.S.

White House spokeswoman Karoline Leavitt has confirmed that there is progress on President Donald Trump’s agenda to get fair international trade standards for American manufacturers and consumers alike.

The president launched a series of tariff battles because for years American producers have had to pay high tariffs to get their products and services into other nations, while those nation’s often have been given virtually free access to American markets.

The imbalance is what has caused America’s large trade deficit and other financial complications.

Trump’s tariffs have been producing results she said.

“We’re doing very well in respect to a potential trade deal with China. There have now been 18 proposals and more than 100 countries around the world who are wanting to make a deal with the United States of America,” Leavitt confirmed.

“The president and administration are setting the stage for a deal with China. … We feel everyone involved wants to see a trade deal happen — and the ball is moving in the right direction.”

The Daily Mail pointed out the Dow Jones Industrial Average rocketed up 600 points on the announcement. Actually, the market surged about 1,000 points on the news.

Fox News reported she continued, “You have Secretary Bessent, Secretary Lutnick, Ambassador Greer, NEC Director Hassett and Peter Navarro, the entire trade team meeting with 34 countries this week alone. We are moving at Trump speed to ensure these deals are made on behalf of the American worker and the American people.”

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US Trade Wars and Military Globalization Spark Complex Alignments

President Trump’s new round of reciprocal and universal tariffs will escalate trade tensions, lower investment, hit market pricing, distort trade flows, disrupt supply chains, and undermine consumer, business and investor confidence. It will certainly penalize global economic prospects.

As fears of a recession mount and mass protests in the US have begun, the loss of over $6 trillion on Wall Street in only two days is just a prelude of what’s to come. Along with China, the large trading economies in Europe, Japan and South Korea, India and Brazil and the rest of the world are positioned to counter the Trump tariffs.

Days before Trump’s new tariffs, China declared its trade minister had agreed with Japan and South Korea, Washington’s two treaty allies in Asia, on a common response to Trump’s actions. In Seoul and Tokyo, the statement was seen as overstated. Nonetheless, after the impeachment of former President Yoon Suk Yeol, the divided South Korea must cope with trade war amid a constitutional crisis, whereas Japan’s PM Shigeru Ishiba has declared it a “national crisis.” In South and Southeast Asia, Latin America and sub-Saharan Africa, developing economies coping with natural disasters and external destabilization efforts are targeted by Trump tariffs as well.

As Washington is decoupling the old linkages between trade and defense policies, it has opened the Pandora’s box for multi-dimensional alignments.

“National security” as pretext for global fragmentation

Taken at face value, the Trump reciprocal tariffs indicate that contemporary America’s greatest threats would be Saint Pierre and Miquelon, Lesotho and Cambodia; that is, a few tiny French islands close to Canada and two poor and small developing countries in Africa and Southeast Asia, respectively.

Ostensibly, the new international tariffs are legitimized by “national security.” In practice, they foster new volatility and uncertainty.

In the past, US military allies were trade partners and vice versa. Now military allies are trade adversaries. In the past, disagreements were resolved while tariffs were reduced; today the reverse applies.

The new protectionism is reminiscent of the Smoot-Hawley and reciprocal tariffs in the 1930s that went hand in hand with assertive nationalism, xenophobia and massive military rearmament paving the way to World War II, the Holocaust, and Hiroshima and Nagasaki. It is thus odd that the military dimension has been largely ignored in recent globalization/deglobalization surveys.

In 1945, the United States accounted for almost half of the global economy. It was the world’s manufacturing giant and greatest debtor. US dollar monopolized cross-border transactions. Today, the relative share of the US in the world economy has halved. It’s the world’s de-industrial giant and greatest borrower. And the global dominance of the US dollar in world transactions has likely been halved, too.

Military power is an entirely different story, however. It is the muscle that the Biden administration used covertly and the Trump White House likes to tout overtly. It is this brute military primacy that is systematically exploited as the White House seeks to hammer the world into its image.

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Dem Rep. Raskin Threatens Foreign Nations That Work With Trump Admin – ‘When We Come Back To Power We Are Not Going To Look Kindly’

Corrupt Democrat Congressman Jamie Raskin (Md.) issued a direct threat to leaders of foreign nations daring to do business with the Donald Trump administration in a Saturday podcast.

The Maryland representative told a “Pod Save America” host that Democrats need to promote “transnational Democratic solidarity,” a.k.a. left-wing globalism, in order to “prevent the spread of lawlessness and fascist chaos that’s been unleashed” by the Trump White House.

Raskin added that part of the worldwide “Democratic solidarity” should be the idea that “if and when” American Democrats “come back to power, and we will, we are not going to look kindly on people who facilitated authoritarianism in our country.”

The Democrat claimed foreign nations working with the current administration equates to “an assault on our Constitution and our people.”

Of course, one could argue that threatening global trade partners with repercussions for doing business with a lawfully elected president and Congress is an assault on both the U.S. Constitution and the will of the people who overwhelmingly voted for the MAGA politicians currently in power.

The radical rep. issued a similar threat during a Sunday appearance on MSNBC’s Inside With Jen Psaki, saying, “President Bukele… and the other tyrants, dictators, autocrats of the world have to understand that the Trump administration is not going to last forever.”

“We’re going to restore strong democracy to America and we will remember who stood up for democracy in America and who tried to drive us down towards dictatorship and autocracy,” he stated.

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Elizabeth Warren: Congress Has to Take Tariff Authority Away from Trump

Senator Elizabeth Warren (D-MA) said Sunday on CNN’s “State of the Union” that Congress had to take away the tariff authority from President Donald Trump.

Warren said, “It is a mistake to have the President of the United States out there just playing red light, green light and saying, oh, this morning I woke up and think the tariffs should be this big. Now, I think they should be this big; now, I think they should be somewhere else. And I got to say, saying, well, I will continue to make those decisions and I’m going to hold off on these tariffs for 90 days, that doesn’t put the economy in a better place. That doesn’t put investors in a better place.”

She added, “Congress has a job right now, and that is to step up and take this authority away from Donald Trump. He has proven how he will use it. But remember the statute that he’s now using starts with a declaration of emergency. And in that same statute, Congress has the responsibility to decide is it really an emergency or not? Are we really in an emergency with Belgium right now? Are we really in an emergency with South Korea? Congress can say no, there’s no emergency. It’s a resolution. And if we do that, it takes Donald Trump back to the trade as we had it before. Tariffs are then decided with Congress having an important say in it. That’s an important signal to the rest of the world. Right now it’s a no curbs on Donald Trump and that means chaos and corruption. We have an opportunity in Congress to vote that down and to say, no, we are going to use tariffs in a far more targeted way.”

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Ten Tariff Questions Never Asked

1.Trump’s So-Called “Trade War.”

Many call the American effort to obtain either tariff parity or a reduction in the roughly $1 trillion trade deficit and fifty years of consecutive trade deficits “a trade war.” But then what do they call the policies of the past half-century by Europe, Asia, China, and others to ensure asymmetrical tariffs, pseudo-health and security trade restrictions, and large surpluses?

A trade peace? Trade fairness?

2. Do Nations Prefer Surpluses or Deficits?

Why do most nations prefer trade surpluses and protective tariffs?

Are Europe, Asia, China, and others stupid? Are they suicidal in continuing their trade surpluses and protective or asymmetrical tariffs?

Is the United States uniquely brilliant in maintaining a half-century of cumulative trade deficits? Do Americans alone discover the advantages of a $1 trillion annual trade deficit and small or nonexistent tariffs?

Why don’t America’s trading partners prefer deficits like ours—given we supposedly believe they are either advantageous or perhaps irrelevant?

3. Would Our Trade Partners Prefer to Trade Places With Us?

Would our trade partners prefer to have America’s supposed benefits of a $1-trillion trade deficit? Would the United States then “suffer” like they do by running up $200 billion annual surpluses?

4. What if Wages Went Up at the Rate of the Stock Market?

What would now be the reaction of the stock market if over the last decade wages had increased at the rate of stocks—and the stocks at the rate of wages?

5. Is Wall Street’s Panic Based on What Might Happen—Or What Is Happening?

Is Wall Street’s meltdown a fear of what might happen in the future? Or is it reacting to March’s latest jobs report that there were 93,000 more jobs created than predicted? Was the Wall Street panic predicated on reports of much lower oil prices? Did the furor arise over the March inflation report that the annualized inflation rate dipped to 2.6% per year?

6. Is the Frenzy Caused by the Trump Economic Agenda?

Is Wall Street’s worry that Trump’s impending tax cuts, more deregulation, greater budget cuts, and continued efforts to eliminate budget deficits and reduce national debt will stall economic growth?

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Tariff Freak Out: Why So Many People Cling To The Cancer Of Globalism

This past week after Donald Trump’s “Liberation Day” announcements the Dow Jones Index plunged by around 4000 points and the global panic was palpable. Social media was rife with nervous naysayers on both sides of the aisle – The leftists are panicking but also cheering because they think crashing markets will turn into public support for the woke commie brigade.  A contingent of conservatives are panicking too, but I’ll get to that in a moment…

My response? Finally this farce of a market is facing a correction and smacking people in the face with five fingers of reality! I applaud the event because it’s something that needed to happen years ago. Most skeptics are wrong on the tariff issue, mainly because they think the stock market matters. It doesn’t.  People are also terrified of tariffs because they think globalism matters. It doesn’t.

This position might upset those who are heavily invested right now, but I would argue they are missing the macro picture and they need to look at the situation from a position of inevitability.  Tariffs and the end of globalism are a necessary outcome.  Here’s why we shouldn’t fear the Reaper…

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Why Comparing Trump’s Tariffs To The Smoot-Hawley Act Is Dishonest

Trump’s tariffs are not designed to encourage Americans to borrow money and maximize their consumption. Nor are they designed to encourage participation in speculative stock market or real estate bubbles. America’s free trade policies encouraged such excesses after the end of the Cold War, and we can’t stand a repeat of the folly. While his critics wrongly invoke the Smoot-Hawley tariff failures of 1930, Trump’s emerging tariff policies, particularly if combined with the appropriate monetary policy, will have much better results and Make America Great Again. 

As Trump’s tariffs are implemented, they will generate revenue for the federal government and encourage investment in atrophied as well as cutting-edge sectors of the American economy. In addition, they will increase the quantity and quality of jobs available for Americans as a whole, will persuade (and are already persuading) our trading partners to adopt fairer and less predatory trading regimes, will arrest a possible slide into recession, and will get our economy moving toward our long-term growth potential of 3 percent (or more) GDP growth per year.

President Trump says “tariff” is one of his favorite words, and historical evidence indicates tariffs work. They worked for the Chinese this century, they worked for the Japanese after World War II, and they worked for the U.S. and Germany in the late 19th century. Back then, American and German growth rates and economic vibrancy radically outstripped the growth rates and economic vibrancy of a free-trading Britain, which, after abandoning its early 19th-century tariffs, adopted the free trade nostrums of David Ricardo and slipped into decline. 

One of the few instances when tariffs failed was during the Smoot-Hawley tariff episode at the beginning of the Great Depression. But there are special circumstances surrounding the imposition of the Smoot-Hawley tariffs that the free-traders hesitate to mention. When the United States raised the Smoot-Hawley tariffs, the U.S. was the world’s greatest creditor, and by raising the tariffs, we prevented others from selling us things so they could make money and pay us back. When they didn’t pay us back, it collapsed the global financial system and helped usher in the Great Depression.

Obviously, today the circumstances are reversed. The United States is now the world’s largest debtor. If we can’t pay back our debts, the global financial system will collapse, which would be disastrous for the entire world. 

Trump’s tariff medicine will put us on a diet, help us produce more, diminish inflation, and position us to manage and decrease our debt. Thus, Trump’s tariffs are not only good for Americans, but they are also good for everybody else across the world. While the Smoot-Hawley tariffs were bad, Trump’s tariffs are good because the relative financial position of the U.S. vis-à-vis the rest of the world is now reversed. This fact must not be overlooked when assessing the wisdom of Trump’s tariffs versus the folly of Smoot-Hawley. 

Furthermore, as Ben Bernanke, the former chairman of the Federal Reserve, taught us, at root, it wasn’t the Smoot-Hawley tariffs that sparked the Great Depression. It was a monstrous policy misstep on the part of the Federal Reserve Open Market Committee. On the eve of the Great Depression, the Fed raised rates and pursued a contractionary monetary policy when it should have cut rates and pursued an expansionary monetary policy. 

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EU Must Buy US Energy to Get Tariff Relief: Trump

U.S. President Donald Trump said late on April 7 that the European Union would need to buy $350 billion worth of American energy to secure relief from tariffs.

Trump was responding to European Commission President Ursula von der Leyen, who said earlier on Monday during a news conference in Brussels that the EU was ready to negotiate a “zero-for-zero” tariff pact on industrial goods.

Asked by a reporter at the White House whether the offer was enough for him to back down on 20 percent duties on imports, Trump said: “No, it’s not.”

“The European Union’s been really tough over the years. We have a [trade] deficit with the European Union of $350 billion and it’s going to disappear fast,” Trump said. “And one of the ways that that can disappear easily and quickly is they’re going to have to buy our energy from us … They can buy it, we can knock off $350 billion in one week.”

On April 2, Trump announced a minimum 10 percent tariff on all trading partners, as well as higher levies on about 60 nations identified by the administration as “worst offenders” in trade imbalances with the United States. China topped the list.

The 27-nation EU bloc is currently facing 25 percent import tariffs on steel, aluminum, and cars, with tariffs of 20 percent due to kick in from April 9 for almost all other goods under Trump’s new policy of responding in kind to countries that he says impose high barriers to U.S. imports.

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