Contact us: info@strategic-culture.su

Trump’s got a lot on his plate at the moment as he wakes up to the reality that you can’t give a radical boost to the U.S. domestic economy at the flick of a switch. The dream of tariffs being able to do this might have been somewhat realistic in the mid 80s when the U.S. imposed a similar radical measures against Japan on electrical goods. Reagan’s thinking at that time was more rational and level-headed and, given that the move to hike up Japanese goods by 100 percent was expected to not even affect the prices of electrical goods in U.S. stores (as there were many U.S. products competing, which were manufactured locally), the move seemed far from radical.

But today’s China is not Japan of the 80s.

Trump’s overarching agenda is pretty clear to most economists. He sees Germany, Japan, and China as exploiting their economic relationships with the U.S. He criticizes their trade practices, alleging that currency manipulation and withholding of dollar reserves contribute to an inflated dollar exchange rate, which of course harms the U.S. economy.

The currency manipulation accusation is of course particularly relevant to China whose government barely denies it. But there would appear to be more about this stunt based on geopolitics than meat-n-gravy economics. Even Trump, who doesn’t appear to understand international trade at all, can’t be this stupid. He must have known that hitting China so hard would impact the U.S. economy as the tariffs themselves are imposed on U.S. firms who actually import the goods from China – and so the prices will be hiked in Walmart and other huge retailers. Americans have nowhere else to go for their cheap goods as, in many cases, the items themselves are not produced by U.S. firms. The other consequence of the childish spat with China is that there is an argument that China’s goods may be heading towards the EU on a scale never seen before as compensation.

There are two theories which are emerging from this extraordinary move by Trump and neither of them are particularly edifying for the simple blue collar worker who voted for Trump and took the whole MAGA hook, line and sinker when they voted for him.

The more obvious one is that Trump is just being Trump and that there will be a climb down from this stunt shortly. He is a child. He is drawn to ideas which make him the centre of attention and the most important player on the world’s stage. It is rather like fishing with hand grenades. You drop one in the water and wait for the bang. Three observations are made which help you draw conclusions to the state of play. Some fish die and float to the surface; some make a dash and hide under the rocks or mooring; a few stay even closer to you.

Some analysts now are pointing out that the tariffs move worldwide was a stunt to see who were his real allies – to him personally, as to Trump, everything is personal. To see which of these fish came closer, would then position him to take on China. But even this stunt has failed as mainstream media in the U.S. is at pains to point out that not even ONE single country has come forward to strike a new deal. This must be worrying for Trump and making him do a lot of these late night telephone calls to his cronies. Trump believed that with a group of supporters, ideally a good number from EU countries, he could force China to succumb but this simply isn’t going to happen. China is simply too strong and too dominant and has too many measures up its sleeve to play – all of which are harmful to the U.S. economy, like dumping the dollar altogether or selling off their U.S. treasury bonds at half price and buying gold with them, which would be devastating to the U.S. economy.

The truth is that they are still waiting for the Donald to climb down and lick his wounds, in his normal style when his crackpot ideas don’t come off. Until now they have only cancelled Boeing orders and ditched the dollar, apparently, as a reserve currency. The more ironic part of the China story is that it is now EU governments – not China – which are selling their U.S. treasury bonds which economists are pointing out is responsible for almost a 10 percent rise in the euro.

The theme which is constantly recurring is not as it is reported. Mainstream media, whose journalists are not very well versed in economics – even business journalists – are reporting that there will be “some pain” in the short term for the U.S. economy while the world adjusts to a new world order. But this is an understatement on a grand scale. In reality, we are waking up to a new world order but it is one which will punish the U.S. severely and drive down its over all clout around the world, not to mention its own domestic economy. Many economists are warning that if unemployment gets close to 5% before the midterms in 2026, Trump’s popularity will plummet to an all-time low, along with the economy. America is heading towards an abyss which it has never seen before and a new all time low of poverty is coming its way. What U.S. journalists are not reporting is the reason why not one single country – or indeed China, for that matter – has worked out a new trade deal. Some journalists and commentators are speculating that the entire world seems to have lost confidence in the U.S. – which is true and an alarming new paradigm for the Trump administration to embrace. But the real story is that western economies, as well as China, simply don’t understand what the theory is behind the tariffs ploy. They don’t even believe Trump has a plan and so this makes negotiating anything nigh on impossible.

And so while Trump plays a juvenile and erroneous strategy to create merely a perception that the U.S. economy is stronger than what it really is, China leads the rest of the world’s big economies with a ruse of ‘wait-n-see’ for the realities to sink in for Trump and how he will wriggle out of the mess he has created himself.

One way he might do this is through the Iran deal which pundits are saying now has a real chance of getting signed off. Although, of course, it’s too early to say as anything can happen – and the Iranians have already signalled concerns that the requirements of Trump’s negotiators seem to be inconsistent with one another – but if a deal can be struck it would be good for both Iran and the U.S. It might even give a new impetus to the Ukraine peace talks. But there’s so much which is vague and illogical about the mercurial logic of Trump.

The second theory which is being bandied about by Trump’s Republican ‘rats’ is that he is deliberately planning on crashing the economy and he wants the perfect scapegoat – China – to take the rap while his cabal of billionaires buy up all the assets in America for a song and finally do what Trump has never succeeded in doing his entire life. Make Trump truly rich.

But surely this is too degenerate and Machiavellian, even for Trump, right? Could the Donald be so depraved just to fill his own pockets?