Trump’s tariff policy represents a desperate bid to preserve US economic, military and geopolitical dominance at any cost — using economic coercion against nearly every country on the planet
Very well articulated analysis. One point of connection: China was NOT even the 2nd nom-western country to use the international trading system to rise into higher value added industrialization. Japan was first, and committed the unforgivable sin of trying to be an independent pole in the global system in the interwar period. It was then "contained" and subordinated.
After WW2 the 4 (pro-western) Asían tigers were allowed to copy this playbook (given special market access, but collectively only marginal priducers). China then did this at a global scale no-one can compete with or contain, for Sino-Centric ends.
It's doubtful that once China dominates all aspects of industry that they will make room for Indias or Africans: China too will want them as economic adjuncts in their "co-prosperity" sphere.
This wave of industrialization for example textile manufacturing migration from Britain to USA and now to South East Asia seems to be an example of the world society slowly -and what looks chaotically- moving into an equilibrium state: if we don't all kill ourselves off before reaching equilibrium. China seems to understand this concept while the USA is stuck with it's head up its arse in self gratification. We all need each other: China gets this; the USA doesn't.
The hollowing out of industry is an inevitable consequence of imperial politics. While the (former) imperial powers US, UK and to a degree France, suffer from this phenomenon, both Japan and Germany have until recently maintained a strong manufacturing sector because they were denied their own empires.
China is not unique in its development. I have been involved with trade, industry and IP in the Far East and Europe since the 1980s. The industrial policies that helped China develop have been pioneered by Japan, Korea and Taiwan before. Visiting Korea, China and Taiwan from my office in Tokyo, I would often be surprised about how similar the state and company structures were to those in Japan. The difference is that the US was able to put political pressure on Japan to curtail its economic development. An example is the chip export quotas the US imposed on Japan during the 1980s, which were to halt the rise of Japanese semiconductor industries. Beijing is not responsive to that sort of pressure.
Emerging economies like the Asian tigers have successfully used industrial policies in combination with state subsidies and selective protectionisms to catch up with the developed West. However, for a developed country to use protectionism for recovering productivity is self-defeating. In a developed country, protectionism will lead to less competitiveness.
Thus, there is no way Trump's attempts at reindustrialization can succeed, because
- the tariffs are not selective,
- there is no industrial policy to build selected domestic industries,
- protectionism will reduce US competitiveness,
- financialization required by the US's global corporate empire disadvantages manufacturing,
- lack of trained workers and engineers,
- Trump's erratic decisions scares away investors who need stability.
On the other hand, the US cannot give up its empire either because its economy is sustained by its global reach.
From my experience in the Far East, I have already feared 30 years ago that the US would choose the military option in its rivalry with China because it cannot compete commercially.
Thus, unless the US Empire rolls over and plays dead, it's hard to see how war can be avoided.
You can’t win a conventional mechanized war against a near peer without massive industrial power, especially across the tyranny of distance. The US ought to have learned something from the conflict in Ukraine, but learning ceased to be its strong suit about 35 years ago …
Great breakdown. The fact that Trump's base is filled with libertarians that believe the government has no role in blah blah blah, they will resist domestic investments because: economic illiteracy.
Or it may represent an attempt to reduce the scope of an Empire the US cannot any longer afford, and that costs way more than it brings in. Trump may be trying to internalize what globalists have externalized for the past 50 years - which is still an imperialist policy.
This book (the link is to the review) might be a nice supplement to those excellent tariffs:
“But for the hard right, even such preferred forms of government could never be trusted. Slobodian lays out how, for right-wingers fearful of a spendthrift government “debauching” the currency, gold became the objective standard of value. Some “goldbugs” actually welcomed the prospect of a currency collapse, anticipating the “twin pleasures” of vindication and financial enrichment. Before the internet, they stoked fear and excitement in what Slobodian calls the “profane space” of the newsletter and advice manual. The key was to portray a collapse as imminent and inevitable: “An essential part of the goldbug formula was instilling a basic mistrust in the utterances of public authorities.””
Is the US "preparing for a future war with China"? Or is it assuming that it will be able to avoid war on the assumption that China will back down in the face of overwhelming US military superiority? This may seem like a minor distinction. But it's how major powers stumble into war, i.e. they tryto bully rivals into submission and then, when targeted country engages in unexpected pushback, up the ante by following up with real military force. This is what's now happening in Yemen. Trump assumed the Houthis would retreat and is now contemplating a ground war now that they've refused. But any such escalation will be disastrous, just as it was for the Saudis or, for that matter, Nasser in the 1960s.
"However, it’s a war the US is destined to lose, for several reasons. "
I guess when you have your mind made up, and already know the outcome, it doesn't make sense to say otherwise...... Anyway, if they get the USD to drop, and remain the reserve currency, the upside at the end of the year will be immense.
Devaluing the USD is a much better approach to take for the US and something the US can persuade other countries to accept (to varying extents.) China for example, as of now does not really qualify for a 7.2:1 exchange rate versus the USD due to its fragile internal financial problems. So China likely would not agree with USD devaluation. However, this is a far softer approach and than tariff and allows each nation to react differently.
Excellent analysis. Could you please examine though, if the US is even financially capable of simply transitioning “to a post-dollar-dominated global trading and financial system” or if its national debt has become too high for that?
It seems, that moment the dollar has lost the reserve currency status, the US financial system would break down under the weight of the US national debt and with it the world’s economy.
Maybe, it is not simply a free choice by the current US administration but a necessity of global dimensions. I don’t know. Just sincerely curious.
Very well articulated analysis. One point of connection: China was NOT even the 2nd nom-western country to use the international trading system to rise into higher value added industrialization. Japan was first, and committed the unforgivable sin of trying to be an independent pole in the global system in the interwar period. It was then "contained" and subordinated.
After WW2 the 4 (pro-western) Asían tigers were allowed to copy this playbook (given special market access, but collectively only marginal priducers). China then did this at a global scale no-one can compete with or contain, for Sino-Centric ends.
It's doubtful that once China dominates all aspects of industry that they will make room for Indias or Africans: China too will want them as economic adjuncts in their "co-prosperity" sphere.
By "Western countries" I was referring to countries in the US-Western sphere of influence – i.e., the "collective West". But otherwise yes I agree.
This wave of industrialization for example textile manufacturing migration from Britain to USA and now to South East Asia seems to be an example of the world society slowly -and what looks chaotically- moving into an equilibrium state: if we don't all kill ourselves off before reaching equilibrium. China seems to understand this concept while the USA is stuck with it's head up its arse in self gratification. We all need each other: China gets this; the USA doesn't.
Great article enjoyed the read (of the obvious).
Ciao
The hollowing out of industry is an inevitable consequence of imperial politics. While the (former) imperial powers US, UK and to a degree France, suffer from this phenomenon, both Japan and Germany have until recently maintained a strong manufacturing sector because they were denied their own empires.
China is not unique in its development. I have been involved with trade, industry and IP in the Far East and Europe since the 1980s. The industrial policies that helped China develop have been pioneered by Japan, Korea and Taiwan before. Visiting Korea, China and Taiwan from my office in Tokyo, I would often be surprised about how similar the state and company structures were to those in Japan. The difference is that the US was able to put political pressure on Japan to curtail its economic development. An example is the chip export quotas the US imposed on Japan during the 1980s, which were to halt the rise of Japanese semiconductor industries. Beijing is not responsive to that sort of pressure.
Emerging economies like the Asian tigers have successfully used industrial policies in combination with state subsidies and selective protectionisms to catch up with the developed West. However, for a developed country to use protectionism for recovering productivity is self-defeating. In a developed country, protectionism will lead to less competitiveness.
Thus, there is no way Trump's attempts at reindustrialization can succeed, because
- the tariffs are not selective,
- there is no industrial policy to build selected domestic industries,
- protectionism will reduce US competitiveness,
- financialization required by the US's global corporate empire disadvantages manufacturing,
- lack of trained workers and engineers,
- Trump's erratic decisions scares away investors who need stability.
On the other hand, the US cannot give up its empire either because its economy is sustained by its global reach.
From my experience in the Far East, I have already feared 30 years ago that the US would choose the military option in its rivalry with China because it cannot compete commercially.
Thus, unless the US Empire rolls over and plays dead, it's hard to see how war can be avoided.
You can’t win a conventional mechanized war against a near peer without massive industrial power, especially across the tyranny of distance. The US ought to have learned something from the conflict in Ukraine, but learning ceased to be its strong suit about 35 years ago …
Great breakdown. The fact that Trump's base is filled with libertarians that believe the government has no role in blah blah blah, they will resist domestic investments because: economic illiteracy.
Or it may represent an attempt to reduce the scope of an Empire the US cannot any longer afford, and that costs way more than it brings in. Trump may be trying to internalize what globalists have externalized for the past 50 years - which is still an imperialist policy.
This analysis is perfect, I agree with it 100%.
This book (the link is to the review) might be a nice supplement to those excellent tariffs:
“But for the hard right, even such preferred forms of government could never be trusted. Slobodian lays out how, for right-wingers fearful of a spendthrift government “debauching” the currency, gold became the objective standard of value. Some “goldbugs” actually welcomed the prospect of a currency collapse, anticipating the “twin pleasures” of vindication and financial enrichment. Before the internet, they stoked fear and excitement in what Slobodian calls the “profane space” of the newsletter and advice manual. The key was to portray a collapse as imminent and inevitable: “An essential part of the goldbug formula was instilling a basic mistrust in the utterances of public authorities.””
https://dnyuz.com/2025/04/09/the-far-rights-love-hate-relationship-with-globalization/
Is the US "preparing for a future war with China"? Or is it assuming that it will be able to avoid war on the assumption that China will back down in the face of overwhelming US military superiority? This may seem like a minor distinction. But it's how major powers stumble into war, i.e. they tryto bully rivals into submission and then, when targeted country engages in unexpected pushback, up the ante by following up with real military force. This is what's now happening in Yemen. Trump assumed the Houthis would retreat and is now contemplating a ground war now that they've refused. But any such escalation will be disastrous, just as it was for the Saudis or, for that matter, Nasser in the 1960s.
"However, it’s a war the US is destined to lose, for several reasons. "
I guess when you have your mind made up, and already know the outcome, it doesn't make sense to say otherwise...... Anyway, if they get the USD to drop, and remain the reserve currency, the upside at the end of the year will be immense.
Devaluing the USD is a much better approach to take for the US and something the US can persuade other countries to accept (to varying extents.) China for example, as of now does not really qualify for a 7.2:1 exchange rate versus the USD due to its fragile internal financial problems. So China likely would not agree with USD devaluation. However, this is a far softer approach and than tariff and allows each nation to react differently.
Accurate in every dimension. A tour de force.
Excellent analysis. Could you please examine though, if the US is even financially capable of simply transitioning “to a post-dollar-dominated global trading and financial system” or if its national debt has become too high for that?
It seems, that moment the dollar has lost the reserve currency status, the US financial system would break down under the weight of the US national debt and with it the world’s economy.
Maybe, it is not simply a free choice by the current US administration but a necessity of global dimensions. I don’t know. Just sincerely curious.