Method in madness; Trump’s tariffs Part 4

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Part 1 set the context for Trump’s tariff mayhem in US elites having for decades found it more profitable to shift manufacturing to the global south, while transforming the domestic economy into one led by interest yielding FIRE – finance, insurance and real estate – sectors. It’s true of course that offshoring and FIRE, defining features of advanced imperialist economies, apply to the West at large. But America’s situation as military hegemon whose exceptionalist status is slipping, and as issuer of a global reserve currency, make it unique.

Part 2 called out flaws in a liberal narrative, exemplified in an Economist  piece by two authors who’d served under Obama and Biden, that tariff chaos is driven by Trump’s recklessness. That reflects a view which sees industrial decline and rentier  excess as defects fixable without root and branch upheaval, or passes over them in silence while professing incomprehension at those who, like their Brexit counterparts over the pond, had gained nothing from either the export of jobs or rising indebtedness, and look however misguidedly to Trump for salvation.

Part 3 features the argument that tariff mayhem, far from being economic lunacy, is the opening salvo in a logically coherent response to a stubborn conundrum: how to re-industrialize America without losing the exorbitant privilege – as Valery Giscard d’Eistang put it half a century ago – of the dollar’s status as a fiat  reserve currency.

So if China wants to sell us things at really low prices and the transaction is we get solar collectors that help make there be less global climate change or we get batteries that we can put in electric cars and we send them pieces of paper that we print. Think that’s a good deal for us or a bad deal for us? Kind of think it’s a good deal for us.

Economist Larry Summers responds to the charge of China “cheating” the US

Part 4 stands in sharp contrast. Its two featured pundits deride the argument critiqued in Part 2, that Trump signals an egregious departure from ‘saner’ stewardship. On the contrary, it insists, he marks a continuation of US effort, going back at least as far as Obama, to cling onto global supremacy in the face of economic challenge from China rising.  Nor do Brian Berletic or Mike Whitney share with Joeri Schasfoort, featured in Part 3, the belief that Trump’s avowed intent to “bring American jobs back home” without loss of the dollar’s status as global reserve currency can be taken at face value. While Dr Schasfoort does not commit on whether or not that can be done, he does believe that the president, his treasury secretary Bessent, and his special advisor Miran sincerely think  that it can.

To Berletic and to Whitney, such faith is naive in the extreme. Brian writes on April 8:

Rather than a random idea that formed within the mind of President Donald Trump himself or among those within his cabinet, sweeping tariffs are the stated policy of unelected corporate-financier interests, articulated in-depth within the pages of special interest-funded think tank documents including Heritage Foundation’s “Project 2025” paper under Chapter 26: Trade Policy. The policy, far from a sound plan to re-industrialize America or genuinely balance America’s trade deficit, is instead meant to maintain America as “the world’s dominant superpower.” 

Two days later, and one day after the April 9 “pause”, Mike offers much the same:

The Trump tariff extravaganza was never about trade deficits, reindustrialization, or bringing jobs back to America. It was always about China. Now that Trump has either eased or lifted the tariffs on 90 other countries, we can see what’s actually going on. Trump is using the ‘tariffs smokescreen’ to implement his decoupling policy, a strategy that is designed to isolate, encircle and eventually crush the People’s Republic of China. That’s the motive that drives the policy.

Here I feature Brian Berletic’s piece in full, and the opening paragraphs of Mike Whitney’s. For all the bleakness of their take (not the same thing as despair, an unaffordable indulgence) it is one I share. It’s fifteen years since two things became painfully clear to me. One is that the West is ruled by elites with generous help from media whose ownership patterns and business model debar them from speaking truth to power on matters of core concern to said elites. The other is that global empires do not passively accept gradual decline – and in case you’d forgotten, the US is a nuclear superpower. While my understanding on many things has since then advanced, neither of those two perceptions have shifted or diminished. Quite the opposite.

Over then to Brian Berletic, writing in New Eastern Outlook. As ever, he uses official documents to make his case. As a much troubled Sinead O’Connor told us, ‘through their own words, they shall be exposed’. 

Worst Case Scenario: Trump’s Tariffs Walling US Off Ahead of Wider World Conflict

economists and geopolitical analysts alike are astounded by what at face value seems irrational self-sabotage attributed to incompetence within the White House. 

In reality, the tariffs are a central pillar of bipartisan foreign, trade, and economic policy implemented first during the previous Trump administration, continued and even expanded upon during the following Biden administration, before being expanded further still under the current Trump administration.

The US is preparing to subject its own population as well as those of supposed allies to immense long-term economic, social, and political pain

Rather than a random idea that formed within the mind of President Donald Trump himself or among those within his cabinet, sweeping tariffs are the stated policy of unelected corporate-financier interests, articulated in-depth within the pages of special interest-funded think tank documents including Heritage Foundation’s “Project 2025” paper under Chapter 26: Trade Policy.

The policy, far from a sound plan to re-industrialize America or genuinely balance America’s trade deficit, is instead meant to maintain America as “the world’s dominant superpower.” 

The paper claims that:

To maintain that global positioning—and thereby best protect the homeland and our own democratic institutions—it is critical that the United States strengthen its manufacturing and defense industrial base at the same time that it increases the reliability and resilience of its globally dispersed supply chains. That will necessarily require the onshoring of a significant portion of production currently offshored by American multinational corporations.

While this seems to at first suggest a general re-industrialization of America’s economy, none of the actual measures required to do so are discussed with any serious attention – measures such as the sweeping education reforms and massive state investment in infrastructure and industry required to actually re-industrialize America.

The policies described within the pages of Project 2025 and now being implemented further under the current US administration are meant instead to disrupt global economic activity including trade and industry, particularly those of China, while compelling industry abroad to be moved to the United States.

An example of this is semiconductor manufacturer TSMC which was forced to move facilities to Arizona in the continental United States. A combination of poor infrastructure, weak supply chains, and a lack of skilled workers have caused massive budget and schedule overruns as well as necessitating the movement of hundreds of workers from Taiwan to the United States to fill roles American employees are incapable of fulfilling themselves.

Similarly, beginning in 2014 with the US-engineered overthrow of Ukraine’s elected government and the triggering of a proxy war with the Russian Federation, subsequent sanctions applied by the US and Europe and the deliberate destruction of the Nord Stream pipelines have crippled the latter’s supply of cheap Russian hydrocarbons.

This has forced European manufacturing to relocate to the United States, as DW in its 2023 article, “Is German industry migrating to the US?,” noted, claiming:

One is the increase in geopolitical tensions. Many German companies see the US as a ‘safe harbor.’ Other reasons are the comparatively low energy costs and the very generous subsidies provided under the Inflation Reduction Act.

In the long-term, as more industry is forced to move from regions of the world like Asia and Europe to the United States through a combination of US tariffs and geopolitical sabotage, stress on America’s insufficient infrastructure, supply chains, human resources, as well as inadequate education and healthcare systems will only increase.

Even if sufficient resources are channeled into improving any or all of the above fundamental factors for transplanting industry to the United States, it will take years to catch up.

In the short-term, as a now 8 year-spanning policy of imposing tariffs and triggering trade war has demonstrated, an already immense cost-of-living crisis is set to expand even further, impacting the lives of tens of millions of Americans already struggling with grocery bills, rent, fuel, healthcare, and education.

Washington’s Obsession is with China, Not “MAGA” 

The success the US has achieved in undermining and stripping away European industry is almost certainly guiding a much larger and more ambitious policy worldwide, ultimately in regard to China.

Project 2025 lists a number of actions to be taken in regard to China specifically including:

Strategically expand tariffs to all Chinese products and increase tariffs rates to levels that will block out “Made in China” products, and execute this strategy in a manner and at a pace that will not expose the U.S. to lack of access to essential products like key pharmaceuticals.

And:

Ban all Chinese social media apps such as TikTok and WeChat, which pose significant national security risks and expose American consumers to data and identity theft.

Additionally:

Systematically reduce and eventually eliminate any U.S. dependence on Communist Chinese supply chains that may be used to threaten national security, such as medicines, silicon chips, rare earth minerals, computer motherboards, flatscreen displays, and military components.

As well as:

Significantly reduce or eliminate the issuance of visas to Chinese students or researchers to prevent espionage and information harvesting.

All of which are either now US policy or are being transformed into US policy under the current Trump administration.

China’s manufacturing base has made everything from pharmaceuticals and everyday consumer products to construction materials and major infrastructure projects affordable for nations around the globe, rapidly improving living standards globally. The world collectively sees cooperation with China as an opportunity.

Because of China’s large population (larger than the G7 combined), its massive and still growing industrial base, and its world-class infrastructure, the US sees China as a threat – not in terms of any sort of genuine national security concern – but in terms of maintaining America as “the world’s dominant superpower,” as per Project 2025 and other policy papers sponsored by America’s unelected corporate and financier monopolies.

Such papers declare China as “a serious existential threat,” not to America as a nation-state or to the American people – both of which would only benefit as the rest of the world has from cooperation with China – but to the deeply entrenched corporate-financier monopolies no longer able to compete with not only Chinese goods and services, but those in nations rising alongside China everywhere from Latin America to Africa and across the whole of Eurasia.

The Worst-Case Scenario 

While the most immediate and intuitive explanations for growing US tariffs against nations worldwide stem from protecting uncompetitive but deeply entrenched corporate-financier monopolies within the US from increasing foreign competition, or a specific strategy to contain China’s growing economic influence worldwide, there is a much more concerning possibility being overlooked by many – the US decoupling from a global economy it seeks to deliberately destroy through a combination of economic and actual warfare.

The obvious and growing impact tariffs will have on the cost-of-living crisis in the United States represent a high and unsustainable cost politically, socially, and economically for the United States – so much so that little else besides anticipation ahead of a major conflict could justify such costs as acceptable.

Were the US preparing for the deliberate destruction of the current global economic system, or large-scale war with one or more of its declared “adversaries,” decoupling itself from the global economy first on its own terms ahead of time – especially in terms of America’s dependence on China for supply chains including all throughout its military industrial base, would be a necessary prerequisite.

The above-mentioned example of semiconductor manufacturer TSMC building a factory in Arizona is admittedly a means of hedging against the possibility of war destroying TSMC facilities in Taiwan itself. US policymakers have even stated publicly that if China itself did not destroy the facilities, the US would deliberately do so to deny China access to them.

A paper published by the US Army War College in 2021 titled, “Broken Nest: Deterring China from Nest: Deterring China from Invading Taiwan,” would explain:

…the United States and Taiwan should lay plans for a targeted scorched-earth strategy that would render Taiwan not just unattractive if ever seized by force, but positively costly to maintain. This could be done most effectively by threatening to destroy facilities belonging to the Taiwan Semiconductor Manufacturing Company, the most important chipmaker in the world and China’s most important supplier.

This represents a microcosm of much wider preparations spurred on by this most recent and otherwise unnecessarily extreme tariff policy.

The tariffs and associated policies targeting China specifically not only serve to help minimize the impact on the US itself if and when military conflict begins, it may be believed it can even help weaken China beforehand.

As drastic as this sounds, it should be remembered that the US is already currently engaged in a massive military build-up versus China in the Asia-Pacific region. The US has also been engaged in years of undeclared proxy-war with China through the use of terrorists and militants across Eurasia used to target and destroy Chinese Belt and Road Initiative (BRI) infrastructure, Chinese engineers working on BRI projects, and local security attempting to protect them. The US is developing and deploying new weapons designed specifically for a near-future conflict with China.

Not only that, the US is preparing for a very particular type of conflict with China – one targeting Chinese maritime shipping worldwide, rather than taking on the Chinese military itself along or within its shores and borders. Several major steps have been taken by multiple US presidential administrations, including the Obama administration, now 2 Trump administrations, and the previous Biden administration in regard to what would be a worldwide blockade of Chinese maritime shipping.

The Obama administration’s “pivot to Asia” began the transformation of America’s military forces from one organized around the decades-long “War on Terror,” to a fighting force tailored for conflict with peer and near-peer competitors. During the first Trump administration, the US withdrew from arms control treaties, allowing for the development and deployment of treaty-violating missiles ranging from anti-ballistic missile defenses to intermediate and long-range missiles now being deployed across the Asia-Pacific.

During the Biden administration, the entire US Marine Corps was transformed from a combined-arms expeditionary fighting force to one custom-tailored specifically for anti-shipping missions in the Asia-Pacific region, replacing its tank and infantry forces with anti-shipping missile forces through the creation of “Marine Littoral Regiments” designed for littoral maneuver and sea denial operations amid peer or near-peer conflict.

The US Air Force had also begun implementing strategies during the Biden administration continuing under the Trump administration including its “Agile Combat Employment” (ACE) strategy to disperse US airpower across the Asia-Pacific region among larger numbers of air bases to make it more difficult for China to target and destroy US airpower in the event of armed conflict.

And in just the last several months – in addition to the growing US military presence across the Asia-Pacific – the current Trump administration has taken drastic measures to choke maritime shipping globally by expanding US military forces in the Middle East targeting both the Red Sea and the Strait of Hormuz, the potential annexation of Greenland specifically citing Russian and Chinese shipping as an impetus, as well as the seizure of the Panama Canal specifically to counter China.

While a global tariff policy to wall off the US economy from its own premeditated destruction of the global economy is a drastic policy, the complete reorganization of US military forces specifically for war with China along with the seizure of key maritime choke points worldwide are equally drastic and make sense only as part of a strategy to precipitate that destruction.

Empire in terminal decline throughout human history has suffered from dangerous desperation. In the 21st century, the US represents a modern-day empire in terminal decline – one armed with nuclear weapons, a global-spanning military, and in control of global economic tools capable of destroying the entire global system rather than concede its role placed above it. The goal would be to survive the controlled demolition of the global order it has presided over for decades and emerge the strongest player, best positioned for establishing itself once again as “the world’s dominant superpower.” 

For the rest of the world and the emerging multipolar world order it is pursuing, a combination of deterrence, alternative economic, trade, and financial systems, and an opposing strategy of walling off and protecting economies and populations from American economic and actual warfare will be required.

The US is preparing to subject its own population as well as those of its supposed “allies” to immense long-term economic, social, and political pain. The cost-of-living crisis in the US will only grow worse. The US hopes that it can endure economic pain and disruption at home and abroad better than the emerging multipolar world can. Multipolarism’s survival will depend on proving otherwise.

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While the substance of Mike Whitney’s April 10 piece in Unz Review  is at one with Brian Berletic’s in NEO, there’s sufficient difference of emphasis and tone – including the evidenced allegation, merely hinted at by me in Part 1, of insider dealing – to make it worth reading in full. Here’s how it opens:

Trump Concocted the ‘Tariffs Hoax’ to ‘Decouple’ with China

The Trump tariff extravaganza was never about trade deficits, reindustrialization, or bringing jobs back to America. It was always about China. Now that Trump has either eased or lifted the tariffs on 90 other countries, we can see what’s actually going on. Trump is using the ‘tariffs smokescreen’ to implement his decoupling policy, a strategy that is designed to isolate, encircle and eventually crush the People’s Republic of China. That’s the motive that drives the policy. The tariffs were just a means to an end. This is from CNN:

President Donald Trump announced a complete three-month pause on all the “reciprocal” tariffs that went into effect at midnight, with the exception of China, a stunning reversal from a president who had insisted historically high tariffs were here to stay.

But enormous tariffs will remain on China, the world’s second-largest economy. In fact, Trump said they will be increased to 125% from 104% after China announced additional retaliatory tariffs against the United States earlier Wednesday. All other countries that were subjected to reciprocal tariff rates Wednesday will see rates go back down to the universal 10% rate, he said.

“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump said in his social media post. “At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable,” he wrote.

China’s “lack of respect”? So, Trump is setting US trade policy based on bruised feelings??

That’s just not a credible explanation. Something else is going on here.

China is being targeted because China’s meteoric rise and explosive growth has made it a threat to America’s global hegemony. That is why China has entered Washington’s crosshairs. By imposing prohibitive 125% tariffs on Chinese exports, Trump is indicating that the era of integrated markets in a globalized system is over. The world is being redivided into warring blocs by wealthy Capitalists in the West who cannot compete with China’s government-led model that controls the nation’s critical industries and recycles massive profits back into vital infrastructure, education, R&D and technology. The West’s highly financialized model—that increasingly depends on skimming the cream off toxic securities and stock buybacks—cannot remake itself into a manufacturing powerhouse willing to compete with China on a level playing field. Instead, it must use its waning influence to jolt the system with some unexpected fireworks display (the tariffs) that sends shockwaves through the system and panic across the markets. These contrived spectacles, that border on economic terrorism, are all part of Uncle Sam’s repertoire that are used to subdue the opposition and maintain Washington’s tenuous grip on power.

But do they work?

Trump seems to think so. Here’s Trump with his billionaire friends discussing ‘the killing’ they made when he eased the tariffs and markets soared.

Donald Trump was caught on video explaining that his billionaire friends made billions yesterday with tariffs and stock market manipulation. pic.twitter.com/ku1J7Ke1pa

Read the Mike Whitney post in full at Unz Review …

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See also:

Method in madness; Trump’s tariffs Part 1

Method in madness; Trump’s tariffs Part 2

Method in madness; Trump’s tariffs Part 3

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