Trump Tariffs: Blessing Or Curse

Echoes of Nixon's dollar revolution

Apr 05, 2025

∙ Paid

Nixon imposed tariffs when he severed the dollar from gold - something coming?
Nixon’s backers were architects of the 'opening' of China
So far, China plays the game: slaps 34 per cent on U.S. goods
High stakes or a premeditated step to the quotas of a technocratic world order?
In the event of war, tariffs could become basis for breakdown in trade
The following is not prediction but the mulling of possible outcomes

(2,900 words or a quarter hour of cautionary tales).

President Donald Trump with commerce secretary Howard Lutnick

Apr 5, 2025

Foreword

Writing about Trump's tariffs, they seem a defensive play. That depends on how the opposition responds, risking trade war, while several countries are itching for kinetic conflict.

When we look at what's happening across the globe it is hard not to see it being partitioned into landmasses, assigning a destiny to what we might call lumpen territories (from the German Lumpenproletariat) — former nations, their people dispossessed, individuals uprooted and incised from the social class and lifestyle to which they would once have belonged.

Trump appeals to voters who perceive or experience disinheritance. Thus his approach to tariffs finds a ready audience. But is it to their advantage or is it another step towards globalism?

Recall our distinction: globalisation is the organic process of people travelling among and selling to each other. Globalism is the political ideology of cybernetics, of humans as resources.

Crude

As an opening gambit that quickly pressures rivals to cut their tariffs, president Donald Trump's ploy may work.

If it leads to a global tit-for-tat then we could have a trade war. Trump is letting go of the brakes when the world is approaching the top of the roller coaster, and not just in the stock market.

There is already evidence that Washington estimated tariffs in a crude and approximate manner, which penalises countries unfairly while failing to target the worst offenders.

Shooting from the hip might cheer a weary populace but it risks stray bullets and innocent victims, which seems to be how governments do things nowadays.

Trump said trade-weighted tariffs would mean stronger competition and lower prices for consumers. Economists have little faith in Trump's claim that tariffs will re-industrialise the United States or bring back jobs.

Backroom

The man in charge of Trump's tariff policy is commerce secretary Howard Lutnick, chairman of Cantor Fitzgerald.

Reuters news agency reported last year that Lutnick is playing a role in the City of London expanding into U.S. Treasuries. That could give it control in a default scenario, senator John Cornyn said at the confirmation hearing of treasury secretary Scott Bessent.

See Ghosts Stalk Trump Investiture - London In Bid To Hijack U.S. Treasury Market (Jan 20, 2025)

Trump imposed across-the-board tariffs, specifically, a baseline rate of 10 per cent for all countries.

Formula

Reciprocal tariffs apply to those who have the greatest barriers to the import of American goods.

But the supposed tariffs imposed against the U.S. were calculated by dividing the U.S.’s trade deficit in goods with a given country, by that country’s total exports to the U.S. The result is then halved — graciously, according to Trump — to give the applicable tariff.

Journalist James Surowiecki discovered the formula, and a U.S. trade representative confirmed it was a short cut that ignores the impact of each country's trade policies —which may include currency controls, managed exchange rates, quotas and sales tax as well as tariffs.

It did not account for the specific industries that tariffs may protect, vulnerable communities or native resources, nor barriers to trade that are not tariffs.

For example, the U.S. has a $235 billion trade deficit with the European Union, which exports a total $605 billion to the U.S. Dividing the former by the latter gives 0.388 or roughly 40 per cent. Halved, according to Trump’s formula for reciprocal tariffs, that gives a 20 per cent rate.

Those hit with the highest reciprocal tariff rates were countries that enjoy the largest trade surplus with the U.S., not necessarily who have the most trade barriers. You might sell coffee or cacao.

Escalation

China responded by imposing an additional 34 per cent tariff on imports of American goods. As for its exports, the Chinese currency is 40 per cent undervalued on a purchasing power parity (PPP) basis according to the World Bank.

China's trade policy is aggressive. However it has 1.4 billion people or about 17 per cent of the world population to employ and feed. You cannot argue if it puts its own interest first.

Furthermore, it is not correct to blame China for other countries' industrial woes. Jobs were outsourced long before China became the world's leading manufacturer.

From the middle of the 20th century manufacturers hopped, skipped and jumped from one country to another, seeking the lowest possible labour costs.

However outsourcing since the 1990s has been closely tied to the apparent globalist desire to make China's role, as the world's manufacturing hub, structural.

This is where we must reconsider motives behind Trump's "Liberation Day" as he termed the battle with tariffs.

It may be, as he says, a strategy of America first. But it may also serve the proponents of stratification, structuralisation and calcification.

Imagine a world in which the U.S. controls intellectual property, China controls manufacturing — “Designed by Apple in California. Assembled in China” — and Europe’s servant class services the holiday homes by Lake Como.

Reset

The press presents us with a false contest of dollar versus the BRICS, the unipolar hegemon versus a multipolar free-for-all.

If the half decade since the Covid response has taught us anything, it is not to trust the conventional rhetoric of the "reds and the blues."

The same press that distracts you with a Punch and Judy show dismisses the centralising tendency — whether you call it late-stage capitalism, over powerful banks and corporations, hyper financialistation, cybernetics or technocracy.

The action takes place offstage. It is better described as a tripartite concept that draws from corporativism in which key interest groups are represented.

Looks like the recycling symbol - it’s the Trilateral Commission.

The Great Reset, to which everyone from King Charles to Pope Benedict, from Lynn Forrester de Rothschild to Klaus Schwab attest, is dismissed in most of the media. The Guardian declared it "implausible" and the BBC sneered: there are several books of that title but they got “hijacked by conspiracy theories."

Such dismissals mean nothing against their avowed intent.

See War & Peace - Ukraine Talks; Dresden's Anniversary - Eurasia note #106 - On the normalisation of brutality (Feb 13, 2025)

When The Great Reset Is Complete - A future retrospective (Nov 23, 2021)

Tariffs are not the reason the U.S. has been losing jobs to outsourcing. It was the removal of tariffs under the North American Free Trade Agreement (NAFTA) in 1994 that saw jobs flow abroad. In 2020 it was replaced with the United States–Mexico–Canada Agreement (USMCA).

Editor: That’s 1,000 words of analysis for free; 2,000 more follow.

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